From the Chairman's Desk:
By Russell G. Golden, FASB Chairman
Standard Setting in the Time of COVID-19
Much has changed in our world since my last column. The effects of the COVID-19 crisis have reverberated throughout the globe—and they’ve required all of us to adjust, quite suddenly, to different ways of living and working.
Like everyone, the FASB has had to adapt. We’ve reassessed our priorities and temporarily paused work on agenda projects in progress that don’t address crisis-related issues. We also postponed our May 18 leases roundtable until further notice.
We cleared our decks to focus 100 percent on helping you apply our standards during this unprecedented event. We continue to closely monitor and respond to your questions. We continue to meet publicly online as a Board and with our advisory groups to discuss what clarity or relief we can provide, where appropriate.
As we monitor and respond to questions, we also made it easier for you to stay on top of what we’re doing. Our COVID-19 web portal pulls together information about resources and actions we’ve taken to address standard-setting issues during the crisis. It includes links to summaries of recent discussions with the Private Company Council and Not-for-Profit Advisory Committee about navigating various standards during this period.
We have focused our work on the most time-sensitive issues raised by stakeholders.
We have focused our work on the most time-sensitive issues raised by stakeholders. At our public meeting on April 8, we gave the FASB staff the go-ahead to issue a question-and-answer (Q&A) document to help account for rapid, unprecedented lease concessions many landlords are poised to provide their tenants during the crisis. The document was posted to our website on April 10.
At that meeting, FASB staff also addressed implementation questions about other crisis-related issues, including interest income and loan payment holidays, and fair value accounting. The staff also announced their work with stakeholders to provide clarity around how to account for loans from the Small Business Administration. These discussions have been, or will be, memorialized in the summary of tentative Board decisions (TBDs) and meeting minutes on the FASB website.
Since then, the FASB staff also released a Hedging Q&A document to address pervasive questions we received about when to discontinue cash flow hedge accounting and when and how to reclassify amounts deferred in accumulated other comprehensive income to earnings.
Finally, on April 21, we issued a proposal that would provide optional, one-year effective date delays for certain stakeholders applying the leases standard and for private company franchisors applying the revenue recognition standard. For the latter, we also added a project to our research agenda to see if there are opportunities to provide revenue recognition implementation expedients to franchisors. I encourage you to review and submit comments on this proposal by May 6, 2020.
This is not the end of our work. We realize there are other standards with effective dates of 2022 and beyond—and that companies implementing them are also suffering from a dislocation of accounting staff and a reallocation of resources. These issues are next in our lineup of discussions.
We continue to monitor new developments related to the COVID-19 crisis and how they may impact companies’ transition plans. In the meantime, please continue to share your questions with us through our Technical Inquiry Service, which puts you in touch with one of our staff experts.
I want to thank my fellow FASB members and the entire FASB technical staff for their diligent work in recent weeks to support our stakeholders. We’re here to help you.
Before I sign off, I’d also like to mention that this is my last “From the Chairman’s Desk” column before my term concludes on June 30, 2020. I’ve enjoyed this opportunity to examine topics of importance to financial reporting and to engage with readers like you who have followed me on this journey.
It’s now my pleasure to pass the baton to the incoming FASB chair, Rich Jones, who officially takes over this desk on July 1, 2020. Be sure to check out his “Meet the FASB Chair” video in this issue, and to continue to stay involved in the activities of the FASB.
The views expressed in this article do not necessarily reflect the views of the FASB. Official positions of the FASB are arrived at only after extensive due process and deliberation.