FASB Chairman Russell Golden on Thursday described plans to increase the efficiency and effectiveness of the board’s operations.
Golden provided wide-ranging remarks about FASB’s future as he spoke at a one-day conference in New York City celebrating the board’s 40th anniversary.
He said the board needs to evaluate its agenda decision process, improve its Accounting Standards Codification (ASC), and attempt to shorten the duration of its projects while enhancing the projects’ quality.
Over the coming months, Golden said, FASB will analyze areas where the ASC may be improved. The board will determine whether it can improve how it writes and communicates changes to the codification.
Some of the more confusing sections will be rewritten, Golden said. The board currently is rewriting the ASC’s liabilities and equity section.
“We should listen to our stakeholders across the country who have delivered mixed reviews regarding the codification,” Golden said. “Most agree and applaud the concept of the value of the codification, but they also observe that, as presently constituted, it is very cumbersome and not user-friendly.”
In addition, FASB plans to:
- Continue improving the way it communicates with stakeholders. Focusing on nontechnical audiences and “plain English” explanations is a key objective.
- Reduce the complexity and cost of applying standards. The work of the Private Company Council plays a role in that, but simplicity is sought for both private and public companies.
- Increase its cooperation with its parent organization—the Financial Accounting Foundation (FAF)—and GASB, which also falls under FAF’s umbrella.
In addition, Golden said, FASB plans to continue pursuing convergence with the International Accounting Standards Board (IASB) while also carrying out its mission of improving U.S. capital markets. He said this can be accomplished by:
- Completing the remaining major convergence projects on revenue recognition, leases, financial instruments, and insurance.
- Considering IFRS and convergence while making changes to U.S. GAAP.
- Actively participating in the development of IFRS.
- Enhancing relationships and communications with other national standard setters.
“This type of cooperation and collaboration would continue the process of developing the highest-quality standards while promoting global convergence,” Golden said.
Golden, who replaced Leslie Seidman as chairman at the beginning of July, said FASB will continue trying to make the best decisions amid a constant, inevitable stream of contradictory opinions and competing interests.
“Our work has not always earned us the top award for popularity,” Golden said. “In fact, some folks over the years have said some downright unkind things about us. But in standard setting, seeking to do the ‘right thing’ is rarely the path to victory in the contest to be the most popular. That’s as it should be.”
—Ken Tysiac (email@example.com) is a JofA senior editor.