Three financial reporting standards to get FAF reviews

BY KEN TYSIAC

The Financial Accounting Foundation (FAF) will conduct post-implementation reviews on standards regulating financial reporting for business combinations, operating segments and investment disclosures.

Standards selected for review, as announced in a FAF news release, are:

  • FASB Statement No. 141R, Business Combinations, which requires an acquiring organization to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired organization at the acquisition date. Those items are measured at fair value as of the acquisition date, with limited exceptions.
  • FASB Statement No. 131, Disclosures About Segments of an Enterprise and Related Information, which requires that public companies report financial and descriptive information about their reportable operating segments.
  • GASB statements No. 3, Deposits With Financial Institutions, Investments (Including Repurchase Agreements), and Reverse Repurchase Agreements, and No. 40, Deposit and Investment Risk Disclosures. Those standards require note disclosures about deposits and investments, including related credit risks. Statement No. 3 also provides accounting guidance for repurchase and reverse repurchase agreements.


“The FASB and GASB standards selected for post-implementation review represented significant and important accounting changes when issued and continue to provide important information today to investors, stakeholders and other users,” FAF Chairman John J. Brennan said in a statement. “We look forward to assessing whether the intended financial reporting objectives underlying these standards are being met, while also obtaining stakeholder feedback on the application, usefulness and effectiveness of these standards set by our boards.”

Post-implementation reviews are a relatively new process created to help the FAF trustees evaluate the effectiveness of the standard-setting process for FASB and GASB. FAF is the parent organization of FASB and GASB.

Just one post-implementation review has been completed thus far. The first review was performed on FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes, and the results were released in January.

The review concluded that FIN 48 increases relevance and comparability in reporting information about income tax uncertainties. But the review reported concern from some preparers that the judgments involved in accounting for income tax uncertainties result in information that is not comparable and may not represent amounts expected to be paid.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

More from the JofA:

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

SPONSORED REPORT

Get the career toolkit

Download this sponsored report for four must-read articles showcasing tips and best practices for employers and employees.

DOWNLOAD

Filing season quick guide — Tax year 2014

Tax season started Jan. 20. Download our “quick guide,” a printable card that contains dollar thresholds, tax tables, standard amounts, credits, and deductions to keep at your fingertips during tax season.

TAX NEWS

Expired tax provisions extended for 2014

President Barack Obama signed legislation that retroactively extended more than 50 expired tax provisions for 2014, allowing taxpayers to take advantage of a host of tax incentives during this filing season.