FASB issued a discussion paper to gather input from stakeholders about the time and effort that will be involved in adapting to several anticipated new accounting and reporting standards and when those standards, which are part of the FASB and International Accounting Standards Board (IASB) convergence projects, should be effective. The board said it will use the input it receives to develop an implementation plan that helps companies and other stakeholders manage both the pace and cost of change.
“We issued this discussion paper to gather the information we need to create a realistic, cost-effective plan for transitioning to the new standards,” Acting FASB Chairman Leslie F. Seidman said in a press release.
The board wants stakeholder input on the amount of time and effort that will be involved in learning about and transitioning to the new requirements, whether the standards should be adopted at the same time or sequentially over a number of years, and whether different effective dates would be appropriate for different classes of entities.
The discussion paper, Effective Dates and Transition Methods, refers to the following convergence projects:
- Accounting for financial instruments and revisions to the accounting for derivative instruments and hedging activities, including netting of financial instruments (exposure draft issued May 2010);
- Revenue recognition: revenue from contracts with customers (ED issued June 2010);
- Leases (ED issued August 2010);
- Financial statement presentation (including discontinued operations) (ED has not yet been issued);
- Insurance contracts (discussion paper issued September 2010); and
- Comprehensive income (ED issued May 2010).
To review the status of these projects, go to fasb.org and click on the “Projects” tab.
The discussion paper says FASB plans to make several targeted improvements to U.S. GAAP over the next year (for example, fair value measurements and disclosure). Those new requirements will include transition provisions and effective dates based on FASB’s assessment of them on a stand-alone basis. FASB may reconsider and amend those decisions in light of the feedback it receives on this discussion paper.
Comments are due Jan. 31, 2011. FASB said that the IASB plans to issue a Request for Views soliciting input on the same issues.
Separately, FASB on Tuesday announced an upcoming free webcast to discuss changes to lease accounting proposed by FASB and the IASB in their joint leases project. The webcast is scheduled for Oct. 28 from 11:00 a.m. to noon Eastern time. Registration is available on the FASB website.
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