FASB

FAF appoints new FASB chairman

The Financial Accounting Foundation (FAF), which oversees the FASB, recently announced that current Board member Russ Golden will succeed Leslie Seidman as FASB Chairman when Ms. Seidman's term expires on June 30.

Mr. Golden's initial term as Chairman will extend to June 30, 2017, at which time he will be eligible for an additional three-year appointment.

Board invites comments on Private Company Decision-Making Framework

The FASB and the Private Company Council recently issued an Invitation to Comment, Private Company Decision-Making Framework – A Guide for Evaluating Financial Accounting and Reporting for Private Companies, to gather feedback on how the Board and Council should determine if and under which circumstances to provide alternative financial reporting guidance for private companies reporting under U.S. GAAP.

The Board had previously gathered input on this topic based on a Discussion Paper issued in July 2012. Significant changes in the current proposal from the framework described in the Discussion Paper include

  • Allowing private companies to select only certain recognition and measurement alternatives without having to apply all private company alternatives under U.S. GAAP
  • Removing a presumption that the same industry-specific recognition and measurement guidance is relevant to the users of both public and private company financial statements

Responses to the Invitation to Comment are due by June 21.

ASU issued on NFPs' accounting for services provided by an affiliate

The Board recently issued FASB Accounting Standards Update (ASU) 2013-06, Services Received from Personnel of an Affiliate – a consensus of the FASB Emerging Issues Task Force.

The guidance in ASU 2013-06 requires not-for-profit entities (NFPs) to recognize services provided by personnel of an affiliate at the affiliate's cost, unless that cost does not reflect the services' value, in which case an NFP has the option to recognize the services at fair value. Refer to the March 19 edition of On the Horizon for a summary of the final consensus.

The guidance in ASU 2013-06 is effective prospectively for fiscal years beginning after June 15, 2014 and for interim and annual periods thereafter. Early adoption is permitted.

Guidance proposed for qualified affordable housing project investments

Recently, the FASB issued proposed ASU, Accounting for Investments in Qualified Affordable Housing Projects – a consensus of the FASB Emerging Issues Task Force.

The proposed guidance would provide less restrictive conditions allowing more reporting entities that invest in qualified affordable housing projects through a limited liability entity the option to account for their investments using an effective yield method. Under an effective yield method, both investment amortization and tax benefits are presented on a net basis in the income tax line item on the income statement.

Refer to the March 19 edition of On the Horizon for a summary of the proposed guidance on which the EITF reached a consensus-for-exposure.

Comments on the proposed ASU are due by June 17.

Board members explain key concepts of credit losses proposal

The FASB recently posted to its website a 30-minute podcast featuring Board members Hal Schroeder and Larry Smith explaining key concepts in its proposed ASU, Financial Instruments – Credit Losses, which is open for comment through May 31.

SEC DELAYS ACTION ON PROPOSED NASDAQ INTERNAL AUDIT RULE

The Commission recently extended the deadline for taking action on the NASDAQ's proposed rule change that would require companies listed on its exchange to establish and maintain an internal audit function from April 22 to June 6. The deferral will allow the SEC additional time to consider the proposal and comments received from constituents.

Refer to the March 19 edition of On the Horizon for more information on the proposed rule.

GASB WHITEPAPER EXPLAINS DIFFERENTIAL GOVERNMENTAL ACCOUNTING STANDARDS

The GASB recently published a revised whitepaper, "Why Governmental Accounting and Financial Reporting Is – and Should Be – Different," to explain how differences between governments and for-profit business enterprises warrant separate accounting frameworks.

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