Speaking at the IMA 2019 Annual Conference and Expo in San Diego, California, this week, Financial Accounting Standards Board (FASB) chairman Russell G Golden told the audience that the board would consider extending deadlines for the implementation of new standards.
He suggested that accounting standards are like software: “. If it’s too complex, or has too many bugs in it, it won’t work. And a standard that doesn’t work creates anxiety, frustration, and friction in the financial reporting system.” He described FASB’s work thus: “These days, if we find an accounting solution is not clear and operable, we search for another one that is.”
He told the audience that FASB is reviewing whether to extend implementation deadlines for accountants at privately held companies and not-for-profit organizations.
He said: “At a public meeting next month, the FASB will consider whether we should extend implementation timelines for private companies and not-for-profit organizations as well as for smaller public companies—and if so, how we should define a ‘small public company’, As part of this process, we’ll look at the effective dates of certain standards that are not yet effective to determine whether they should be amended to reflect a new philosophy. We’ll ask you for input on this as well.”
Regarding other projects, Golden said: “Our active agenda project on liabilities and equity will simplify a very complex area of accounting—and provide more relevant information to financial statement users.” An exposure draft containing FASB proposals will be published in the coming months.
“We’re also working on a project to simplify balance sheet classification of debt. Currently, the staff is working on a revised Exposure Draft to be issued later this year.” Again, we’ll look to you to share your views on that proposal.
“Finally, with the impending reference rate change away from LIBOR, the FASB has begun to consider its impact on accounting standards. We’ve already amended the hedging standard to include SOFR as a permissible benchmark rate and intend to stay ahead of any new developments. This project will generate more proposals where—surprise!—we’ll need your input.”