November 9, 2021
The Investor Advisory Committee (IAC) met on November 9, 2021. Below is a summary of topics discussed at the meeting:
- IAC Emerging Issues and Trends: IAC members discussed several emerging issues related to revenue recognition. First, one IAC member provided observations on the rise of significant financing components in customer deposits. Second, another IAC member recommended increased disclosures on consumption or usage-based revenue transactions. Moreover, that IAC member suggested that entities provide gross revenue roll-forward disclosures versus net revenue roll-forward disclosures. IAC members also underscored some issues discussed in previous meetings, including the importance of further disaggregation of revenue, costs of goods sold (COGS), and selling, general, and administrative (SG&A) expenses, and the need for enhanced tax disclosures by geographic region. In addition, IAC members discussed certain areas in which there is diversity in practice or more information is needed. Those include the presentation of restricted cash in the statement of cash flows, accounting for digital currencies and certain digital transactions, significant changes in assumptions used to calculate the current expected credit losses (CECL) reserves, and the treatment of certain expenses in the mortgage industry.
- 2021 FASB Invitation to Comment (ITC), Agenda Consultation: The FASB staff updated the IAC members with an overview of the ITC objective and process, preliminary feedback received, and next steps for IAC participation in agenda prioritization.
Investor Advisory Committee Meeting Recaps are provided for those interested in following the activities of the Investor Advisory Committee. More details on the Investor Advisory Committee’s input on the FASB’s projects can be found within the meeting minutes, which will be published on the FASB website in the coming weeks.