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FASB’s newly leveraged emerging issues task force to start in spring

The Emerging Issues Task Force (EITF) will start as a newly leveraged body as of this spring, FASB Chair Richard Jones told board advisers on March 5, 2024.

His remarks put a finer point on when the EITF will begin its enhanced role, which was announced late last year. No meeting dates have been reported as yet.

The task force’s new role comes from requests by stakeholders who “provided valuable feedback on how we could better leverage the expertise of this talented group of professions,” Jones told trustees of the Financial Accounting Foundation last week. The board “will be making improvements to the EITF process to allow it to be more effective and efficient in addressing technical accounting issues as they arise in markets.”

Under it’s new role, the EITF will have control of its own agenda and deliberate issues, but the output of an EITF consensus will be a recommendation to the FASB in the form of an agenda request with a proposed solution.

The EITF is composed of 12 members from the accounting profession, including all of the Big Four firms. Added to that are participant observers from the SEC’s office of the chief accountant; the AICPA’s Financial Reporting Executive Committee (FinREC); and the Private Company Council (PCC).

FASB Technical Director Hillary Salo currently chairs the unit. She will vacate that seat mid-year to become a FASB member. Her successor as technical director will then chair the EITF.

The coming change is historic to a special and critical unit that has been around since 1984 to work with the FASB to resolve highly technical and tricky areas that arise when applying US GAAP.

Over the years, the EITF evolved to a lesser role than inception. There was a period – decades ago – whereby the unit controlled its own agenda, dealing in some cases with 30 to 40 issues a year. The task force’s decisions took effect right after it held meetings but over time that process changed and the panel’s process became part of the FASB’s full process.

In 2023, the unit only had one problem to solve: Issue No. 23-A, Induced Conversions of Convertible Debt Instruments which resulted in Proposed Accounting Standards Update (ASU) No. 2023-ED600, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (a consensus of the Emerging Issues Task Force).

The proposal was issued in December 2023 to clarify the reporting of convertible debt instruments with cash conversion features and other adjustment features that have become prevalent in the market. (See FASB Proposes to Amend Accounting Rules for Certain Types of Convertible Debt in the December 20, 2023, edition of Accounting & Compliance Alert.)

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