From the Chairman's Desk:
By Russell G. Golden, FASB Chairman

Real Input from Real Accountants:
Field Work

Field work puts accounting standards to the test where it counts: the real world.

When real accountants give a potential standard a trial run, we get a clearer picture of whether the costs of applying that standard will be worth the benefits of that information to investors and other financial statement users. Simply put, field work tells us if our standards—or proposed standards—really work

Field Work during the Standard-Setting Process

We perform field work with various groups at different points in the standard-setting process. For example, when the Board must decide whether to set standards in areas where little to none exists, we ask those who would be affected to give us a trial run.

One current example concerns government assistance. Government assistance refers to grants of assets, tax assistance (for example, sales, payroll, or property tax), or debt-related assistance (for example, low-interest rate loans and loan guarantees) from the government to businesses.

Before we decide what additional disclosures to require, we need to understand the impact on companies. The FASB staff recently asked a select group of them to share sample disclosures with us—and explain the process they must undergo to provide them.

Outreach is still underway. When it concludes, FASB staff will analyze and present their findings to the Board in an upcoming public meeting. While feedback provided by individual companies will remain confidential, what we learn will help us determine potential paths forward.
Sometimes, field work reveals solutions we hadn’t considered.

Sometimes, field work reveals solutions we hadn’t considered.  FASB staff recently worked with public companies to test potential new disclosures about their reportable segments.  As part of this process, participating companies shared other potential alternatives to consider—alternatives the staff will present to the Board at a future meeting.

And field work will help us make better decisions on our financial performance reporting project. FASB staff recently worked with preparers to understand an approach that would disaggregate (separate) income statement expense information based on how management internally views consolidated expenses—and what that approach might yield for potential disclosures. This will help us analyze the costs and benefits of establishing guidance in this area.

Field Work on Implementation Issues

We also perform field work to monitor and support companies and organizations as they put our standards into practice.

For example, the FASB staff is engaged with a variety of auditors and public companies, including members of our advisory groups, to better understand lease implementation challenges.  What we learn from their experience helps develop educational and other tools to improve the ongoing application of the standard—and will help us ease the burden for private companies and not-for-profit organizations as they prepare to adopt the standard.

Last September, we also launched a series of CECL Implementation Workshops—90- to 120-minute interactive sessions presented by the FASB staff at various conferences and other venues around the country.  (See related article by FASB Acting Technical Director Shayne B. Kuhaneck.) While these workshops are designed to educate stakeholders, they also provide us with insight on your implementation concerns.

Field Work Requires You

Field work is one of the many ways we seek your input on our activities. If you are interested in sharing your views on FASB projects and implementation issues, I encourage you to follow our activities and contact us about projects of interest. As always, I thank you for your interest and involvement in our work.

The views expressed in this column do not necessarily reflect the views of the FASB. Official positions of the FASB are arrived at only after extensive due process and deliberation.