FASB on Wednesday issued its 2021 FASB Agenda Consultation Report, which announced the addition of three new projects to its technical agenda based on feedback received during the project.
The board added the following projects based on feedback from investors and a broad range of stakeholders:
- Accounting for and Disclosure of Digital Assets.
- Accounting for Environmental Credit Programs.
- Accounting for and Disclosure of Software Costs.
"Stakeholders from all professional backgrounds expressed strong interest in addressing emerging areas in financial reporting," the report said.
The feedback also resulted in new research projects aimed at gathering more information for potential technical agenda projects in the following areas:
- Accounting for Exchange-Traded Commodities.
- Accounting for Financial Instruments with Environmental, Social, and Governance (ESG)-Linked Features.
- Hedge Accounting Phase 2 — this research project was expanded to consider changes to the definition of a derivative.
- Accounting for Government Grants, Invitation to Comment.
- Consolidation for Business Entities.
- Financial Key Performance Indicators (KPIs) for Business Entities.
- Statement of Cash Flows.
"While the feedback from all of our stakeholder groups was tremendous, the increased participation of investors in our process has already shaped our agenda," FASB chair Richard R. Jones and technical director Hillary H. Salo said in a press release. "The top seven most frequently cited investor priorities are now included on either our technical agenda or are undergoing further analysis as part of our research agenda."
During the agenda consultation process, FASB asked stakeholders to share their views on where they think the board should focus its resources to best fulfill its mission to establish and improve financial accounting and reporting standards to provide useful financial information to investors and other allocators of capital.
Starting in late 2020, FASB members and staff performed outreach with stakeholders, including advisory groups. The collective input received from meeting with more than 200 stakeholders (about one-third of whom were investors) formed the basis of FASB's June 2021 Invitation to Comment (ITC), Agenda Consultation, which elicited 522 responses.
The report also says that investor feedback helped the board define a new path forward on the financial performance reporting project, revising its objective and scope to focus on disaggregation of income statement expenses.
Investor input also helped focus the FASB's long-term project to improve the transparency and usefulness of income tax disclosures by revising its objective and establishing a project scope that primarily focuses on income taxes paid and the rate reconciliation table.
— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.