The Financial Accounting Standards Board (FASB) plans to hold a webcast on June 15, 2018, to offer updates on its standard-setting activities and answer questions from private companies and not-for-profit organizations about current accounting issues.
The webcast is scheduled to cover three of the FASB’s major standards — revenue recognition, leases and accounting for credit losses — as well as the implementation of an update to U.S. generally accepted accounting principles (GAAP) to simplify hedge accounting and expand its use. The board also plans to go over guidance on the accounting ramifications of applying the Tax Cuts and Jobs Act (TCJA) and give an update about how the FASB is monitoring questions as a result of the sweeping tax law changes.
In addition, the webcast is scheduled to touch on the FASB’s efforts to improve disclosures as well as its ongoing effort to simplify U.S. GAAP by “reducing unnecessary complexity in financial reporting,” according to the FASB’s website.
The FASB also plans to discuss the activities of the Private Company Council (PCC), the main advisory panel of the FASB’s devoted to private company accounting issues, and accounting issues of interest to the not-for-profit sector. The scheduled speakers include FASB member Harold Schroeder, technical director Susan Cosper, assistant director Jeffrey Mechanick and senior project manager Michael Cheng.
The FASB has been devoting significant time to ensuring smooth implementation of the three standards. The revenue standard, published in May 2014 via Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers, is the result of more than a decade of work to eliminate pages of industry-specific guidance in U.S. GAAP and come up with a single method to tally the top line in company income statements. Public companies complied with the standard this year; private companies and other organizations will comply with it in 2019.
The leases standard, issued in February 2016 as ASU No. 2016-02, Leases (Topic 842), will require businesses to report on their balance sheets the costs of renting storefronts, heavy equipment and factories for the first time. Public companies must follow it in 2019 and private companies the year after.
The credit losses standard, published in June 2016 as ASU No. 2016-13 , Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, is the board’s chief response to the 2008 financial crisis, scrapping current accounting requirements that holds banks back from recognizing losses until they have already happened. Banks and other financial businesses must follow the new standard in 2020 and 2021, depending on the size of the organization.
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