The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...
By Denise Lugo
Dec. 6 — The Financial Accounting Standards Board will focus over the next few years on figuring out how financial reporting can keep pace with advances in technology, FASB Chairman Russell Golden said.
With better technology, investors get more relevant information, he said.
“While working through the technical areas of our foundational projects we’ll also consider how technology is influencing both the delivery and consumption of financial information,” Golden told the American Institute of CPAs conference on Current Securities and Exchange Commission and Public Company Accounting Oversight Board Developments Dec. 6.
FASB’s foundational projects are the conceptual framework of financial reporting and its disclosure framework, two non-authoritative internal documents that guide the board’s standard-setting decisions. “Technology gives us the greatest opportunity to improve financial reporting,” Golden said. “We’ve already seen the possibilities of XBRL,” he said, referring to the electronic tagging of financial report items that make reports more comparable to each other.
Golden’s comments are in line with comments by SEC staff accountants Dec. 5 about increasing the use of technology in financial reporting. Investors are increasingly using electronic means to quickly consume financial information and to get it in digital format that can easily fit into their models.
Asked by Bloomberg BNA during a press session how far the board plans to go with its technology focus, Golden said it was a good question but difficult to answer “because I’m not sure at this time. ”But I do believe that we should be considering the types of advances in technology as we consider future standards,” he said.
Golden also told reporters the board must weigh the projects it might tackle in the future against the degree of financial reporting changes companies currently confront.
His comments addressed concerns some companies have about implementing new rules on revenue, leases and credit losses of financial instruments, and the potential for more rules to come from an agenda consultation paper it issued earlier this year.
“What I think is most important is we stand ready to help companies, auditors and users understand these changes that we completed in 2016—that’s why I focus a lot of the comments on implementation,” Golden said .
Issued May 2014, rules on Revenue from Contracts with Customers (ASC 606) are effective in 2018, but can be applied next year. Rules for both Leases (ASC 842) and Financial Instruments—Credit Losses (ASC 326) were issued earlier this year and take effect 2019 and 2020, respectively.
The three far-reaching standards represent the most extensive overhaul in decades in financial reporting in the U.S. They will have widespread impacts that vary across sectors.
FASB also plans to issue standards on hedge accounting and long-duration insurance contracts focused on life insurance and annuities, as well as finalize other proposals.
Toward the end of 2017, before the mandatory effective date of the new revenue standard, FASB will be providing investors with more educational information about the new standards, Golden said.
“There’s a clear desire that we finish hedging, and so what we need to do is determine ‘what is the type of projects we’re working on in the future and what is the pace of those projects.’” Golden said.
To contact the reporter on this story: Denise Lugo in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: S. Ali Sartipzadeh at email@example.com
Copyright © 2016 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)