Displays, Equity/Liabilities Probably Next Accounting Issues

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By Steve Burkholder

Aug. 9 — U.S. accounting rulemakers will likely take up two topics—how financial statements should be laid out, and distinguishing financial instruments with traits of liabilities and equity—when they decide on their next deliberative topic, a former member of the Financial Accounting Standards Board predicted.

Thomas Linsmeier, a 10-year veteran of FASB who left the panel June 30 because of term limits, suggested Aug. 9 that the board will defer starting standard-setting efforts on two other prospective subjects it highlighted in an Aug. 4 consultation paper: pensions and other postretirement employee benefit plans; and intangible assets.

“It is not likely that all four will go on” the next standard-setting agenda, Linsmeier said in a panel discussion at the annual meeting of the American Accounting Association in New York.

FASB published the Aug. 4 paper as an invitation to comment on what topics it should pursue after completing major standards on revenue recognition, leases and financial instruments (12 APPR 16, 8/12/16). The U.S. board had been working those rules for eight to 10 years in tandem with the International Accounting Standards Board.

Details of What Might Be Next

The potential project on financial statement presentation encompasses possible new display approaches for reporting income, operating or business segments, other comprehensive income and cash flows.

How to distinguish instruments that have traits of liabilities and equities has been a particularly vexing topic for FASB and IASB. The boards once pursued the topic jointly up to some five years ago.

The panels put the effort on the far back burner as they focused on the high-priority projects that led to important new rules in 2014 and this year, including on banks' accounting for credit losses.

To contact the reporter on this story: Steve Burkholder in New York at sburkholder@bna.com

To contact the editor responsible for this story: Steven Marcy at smarcy@bna.com

For More Information

FASB's invitation to comment on its future agenda is available at http://src.bna.com/hAx

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