From the Chairman's Desk:
By Russell G. Golden, FASB Chairman
Another Exciting Year at the FASB
With less than 15 months left in my term as FASB Chairman, it isn’t yet time to reflect on our accomplishments. We want to focus even more on the many things we can still accomplish on our technical agenda.
In the next year the Board and FASB staff will work together to:
- Continue the momentum on our implementation and educational efforts,
- Run our post-effective date review and monitoring program, and
- Develop our paths forward on current projects.
Implementing New Standards
We have focused more of our outreach efforts to help organizations position themselves for a successful and smooth transition to new standards.
We have fully embraced our “Standards That Work” theme from last year’s Annual Report, and it has been a success to say the least.
At the center of this theme is stakeholder outreach. We have focused more of our outreach efforts to help organizations position themselves for a successful and smooth transition to new standards.
We anticipate that our momentum will continue through the end of the year and beyond. For example, this year we will continue our educational and implementational programs for newly issued major standards, such as:
- Revenue recognition
- Credit losses
- Not-for-profit financial reporting, and
Monitoring Standards in Real Time
The newly implemented standards on revenue recognition and leases are the next ones we will run through post-implementation reviews.
Helping stakeholders understand and transition to new standards will certainly take a lot of the Board and FASB staff’s time in 2019 and beyond. And it should—considering how important the standards are to organizations’ financial statements, their investors, and the capital markets.
One little-known part of our process is our post-effective date review and monitoring program. The program secures immediate feedback on our stakeholders’ implementation progress and provides a tailored, longer-term look at each standard’s costs, benefits, and effectiveness.
The newly implemented standards on revenue recognition and leases are the next ones we will run through post-implementation reviews. You can find out more about the program, what we have already done, and what we plan to do, in my recent LinkedIn column here.
Paths Forward on Current Projects
Improving GAAP is an endless task, so we also have an agenda to address some financial accounting and reporting issues that are top-of-mind for many stakeholders. This year the Board plans to develop paths forward on important projects, including:
Liabilities and Equity. Accounting for convertible instruments and contracts in an organization’s own equity are leading sources of financial statement restatements—so our stakeholders are excited for this project and are following it closely.
Reference Rate Reform. The FASB staff is conducting research and stakeholder outreach to identify and prioritize potential accounting changes to facilitate the market-wide transition from interbank offered rates (such as the London Interbank Offered Rate) to alternative reference rates (such as the Secured Overnight Financing Rate).
Segment Reporting. In 2019, the project will focus on undertaking a study into potential alternatives to improve the specific disclosures required for each reportable segment.
Disaggregation of Performance Information. The Board is looking at ways to disaggregate certain summarized expense lines on the income statement.
Conceptual Framework. The Board will continue deliberations on the definition of revenues, gains, expenses and losses and expect to issue an Exposure Draft for public comment.
So much to do, so little time. I’m excited that the FASB is poised to have a productive 2019 and beyond. We are rolling up our sleeves and ready to work. We look forward to your engagement across our entire work plan for the year.