Investor Advisory Committee (IAC)


November 17, 2022

The Investor Advisory Committee (IAC) met on November 17, 2022. Below is a summary of topics discussed at the meeting:

  • FASB Highlights: The deputy technical director provided an update to IAC members on how the feedback received from stakeholders on the 2021 Invitation to Comment, Agenda Consultation, has been considered by the Board. She highlighted that the top seven items most frequently cited as priorities by investors have all been incorporated into the technical agenda or research agenda.
  • Emerging Issues and Trends: IAC members discussed the importance of understanding the effects of foreign currency transactions on revenue and profit trends, noting significant shifts in currency exchange rates. IAC members also discussed the benefits of enhanced disclosures for companies’ use of factoring and other working capital management techniques as well as how banks manage assets and liabilities in the rising interest environment.
  • Disaggregation—Income Statement Expenses: IAC members provided feedback on disaggregating cost of sales using costs incurred during the period. Overall, IAC members were supportive of the approach and commented that additional information on the drivers of cost of sales would enhance comparability of performance reporting and help them identify trends and better understand the business. IAC members also discussed various disaggregation approaches for expenses other than employee compensation, depreciation, and amortization. Some IAC members preferred using a quantitative threshold to further disaggregate other expenses. Some IAC members acknowledged challenges in identifying expenses that are broadly important across industries and suggested qualitative disclosures on the composition of the remaining items and expenditures with potential future benefits.
  • Accounting for and Disclosure of Software Costs: IAC members provided feedback on this project. IAC members preferred expensing costs of software to be sold, leased, or marketed (that is, external-use software) and did not object to retaining a different accounting model for internal-use software. IAC members generally agreed that a breakdown of internal and external-use software balances and a rollforward disclosure of those balances would be useful.
The next IAC meeting is expected to be held in May 2023. For more information on the IAC, visit the FASB website.

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.