FASB adds three new projects to its technical agenda
The FASB released its 2021 FASB Agenda Consultation Report on Wednesday, 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 wide range of stakeholders:
- Accounting and Disclosure of Digital Assets.
- Accounting for environmental credit programs.
- Accounting and disclosure of software costs.
“Stakeholders from all professional backgrounds expressed a strong interest in addressing emerging areas of financial reporting,” the report said.
The feedback also prompted new research projects to gather 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) characteristics.
- Phase 2 hedge accounting — this research project has been expanded to reflect changes to the definition of a derivative.
- Accounting for government grants, invitation to comment.
- Consolidation for business entities.
- Key financial performance indicators (KPIs) for business entities.
- Cash flow statement.
“While the feedback from all of our stakeholder groups has been tremendous, increased investor participation in our process has already shaped our program,” said FASB Chairman Richard R. Jones and Chief Technical Officer Hillary H. Salo, in a press release. “The seven most frequently cited investor priorities are now included in our technical program or are further explored in our research program.”
During the agenda consultation process, the FASB asked stakeholders to share their views on where they believe 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 capital allocators.
Beginning in late 2020, FASB members and staff conducted outreach to stakeholders, including advisory groups. The collective feedback received from the meeting with over 200 stakeholders (of which approximately one-third were investors) formed the basis of the June 2021 FASB Invitation to Comment (ITC), Agenda Consultationwhich elicited 522 responses.
The report also says investor feedback helped the board chart a new course forward for the financial performance reporting project, revising its focus and scope to focus on disaggregating expenses from the income statement.
Investor feedback also helped focus the FASB’s long-term project to improve the transparency and usefulness of income tax reporting by revising its focus and establishing a project scope that primarily focuses on income taxes paid and rate reconciliation table.
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