May 11, 2023
The Investor Advisory Committee (IAC) met on May 11, 2023. Below is a summary of topics discussed at the meeting:
- FASB Project Updates: The FASB staff delivered updates about two current projects on the FASB’s technical and research agendas: Disaggregation—Income Statement Expenses and Statement of Cash Flows. Consistent with previous IAC meetings, IAC members reiterated the importance of additional transparency about expense information, such as selling expense, and cash flow information, including working capital changes, cash interest, capital expenditures, and factoring activities.
- Emerging Issues and Trends: IAC members discussed their observations on the recent market events associated with financial institutions, including a desire for more information about deposit concentrations, enhanced interest rate risk disclosure, more standardized interest rate sensitivity analysis, and more information about economic hedging exposures. Members also discussed the potential benefits of defining key financial performance indicators and providing additional insights into research and development expense.
- Accounting for and Disclosure of Crypto Assets: IAC members discussed the proposed Accounting Standards Update, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, and expressed support for the increased transparency of crypto assets. IAC members also noted the importance of understanding the liquidity risk and any additional risks associated with crypto assets. Some IAC members suggested that fair value changes of crypto assets should be recognized in other comprehensive income, rather than in net income.
- Improvements to Income Tax Disclosures: IAC members supported the proposed Accounting Standards Update, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. IAC members noted that the enhanced disclosures would help investors understand a company’s risks and opportunities related to income taxes and enable them to better assess the sustainability of income taxes over time. Members indicated that providing the proposed enhanced rate reconciliation and cash taxes paid disclosures annually would be sufficient. Some IAC members commented that pre-tax GAAP income by jurisdiction also would help their analyses.
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.