FASB will seek input on what its future standard-setting priorities should be in an agenda consultation that’s starting this month, board Chair Richard Jones said Tuesday at the AICPA Conference on Current SEC and PCAOB Developments.
“The FASB undertook a successful agenda consultation project in 2016,” said Jones, who replaced Russell Golden as chair of FASB in July. “I believe it’s time to do it again.”
This month, FASB will begin to conduct outreach with its advisory and other stakeholder groups to understand priority areas that the board should address. FASB will hold meetings and request written comments to evaluate the feedback.
In the spring, FASB will analyze and share the feedback with the Financial Accounting Standards Advisory Council to get its views. An invitation to comment will be issued in the middle of 2021.
“Based on what we learn, we’ll be in a better position to decide where to prioritize or focus our efforts,” Jones said.
In addition, Jones highlighted:
Goodwill. FASB continues to work on a project on goodwill, a topic that often receives impassioned input from stakeholders. “I can say that, at this point, the FASB is leaning toward a goodwill amortization with impairment model,” Jones said.
FASB Technical Director Hillary Salo said the board will consider the issues of the amortization method and the amortization period at a meeting next week. Straight-line is one of the methods that will be discussed. Possible lengths for the amortization period may be 10 years or 15 years, but there are many questions around that issue. “There isn’t a clear conceptual answer,” Salo said.
More issues related to goodwill will be discussed at later meetings.
Jones added that the International Accounting Standards Board also is working on goodwill and recently issued a preliminary views document. “While we are not currently on the same track with our decisions, they’re still works in progress,” he said. “And we will continue to monitor each other’s decisions and findings to make the best judgments."
Segment reporting. Jones said FASB’s segment reporting project is a top priority for financial statement users. “At this point, the board is leaning toward a model that stays true to the chief operating decision-maker through the eyes of management principle, that relies on how the top decision-maker in a company views segments,” he said.
Post-implementation review. FASB is in the midst of post-implementation reviews of its comprehensive new standards on revenue recognition and accounting for leases and accounting for credit losses. “The biggest standards are rarely ‘one and done,’” Jones said.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.