Better Together: How the FASB and the GASB Collaborate
Editor’s Note: For this issue of The FASB Outlook/The GASB Outlook, FASB Chairman Russ Golden and GASB Chairman Dave Vaudt teamed up to provide a look at how the FASB and the GASB work in tandem to develop the highest quality standards for their respective stakeholders.
We’ve often talked about the importance of outreach and research to standard setting. Regular readers of our columns know that the FASB and the GASB go to great lengths to learn as much as possible from our stakeholders about the potential impact of our decisions.
What’s not as obvious is how the FASB and the GASB work together to share research and knowledge on issues of mutual interest. When we collaborate, we often obtain fresh perspectives on effective approaches to standard-setting problems.
What we do share is a strong commitment to develop standards that help deliver relevant information to citizens and the capital markets.
Granted, the FASB and the GASB are very different. The Boards were created at different times for different purposes to serve different stakeholders. The FASB was established in 1973 to serve public companies, private companies, and private sector not-for-profit organizations. The GASB was established in 1984 to serve U.S. state and local governments.
What we do share is a strong commitment to develop standards that help deliver relevant information to citizens and the capital markets. And we leverage our differences to our advantage. The GASB, for example, has frequently looked to its sister Board’s longer history of standard setting to inform its approach to similar issues. Likewise, the FASB has often drawn on the GASB’s work to leverage new ways to improve existing standards that may not have been considered when those standards were first developed.
How We Collaborate
Collaboration between the FASB and the GASB is nothing new. They have engaged, to varying degrees, on projects since the day the GASB was created. When we first became chairmen of our respective Boards in 2013, we pledged to step up that engagement.
Each week, we consult as chairman on key areas the Boards are currently addressing to see if there are opportunities to share research or knowledge. The FASB and GASB technical directors also meet regularly to keep each other informed of priority issues.
At the project team level, staff members of one board are routinely assigned to monitor a project the other board is working on, attend board meetings when that topic arises, and periodically attend scheduled team meetings to learn about the future course of the project and share information about their own board’s perspective.
Leveraging Expertise and Resources
Over the years, the FASB and the GASB have worked closely on standards for pensions and other postemployment benefits, accounting for leases, and fair value measurement and application. In each case, we’ve shared research and insights to supplement work in progress by the FASB and GASB staffs.
For example, we worked together to develop accounting relief guidance for our respective stakeholders as capital markets transition away from the London Interbank Offered Rate to other reference rates.
We’ve also joined forces to educate stakeholders. In recent years FASB and GASB have launched a series of joint educational webinars. Last fall, for example, we hosted a CPE program tailored to academics interested in non-for-profit and governmental accounting.
More recently, the Boards have been in close communication on how to provide accounting relief and clarity to stakeholders dealing with the impact of the COVID-19 pandemic.
Different Conclusions, Same Objective
It is important to note that the Boards are independent standard-setters. As such, we may—and often do—reach different conclusions. Members of each board possess diverse perspectives based on their areas of expertise, and differences between the public and private sectors are significant.
But while we may reach different conclusions, we aim for the same objective: standards that deliver relevant information to a wide range of capital market stakeholders. And the more research, knowledge, and information we share, the better equipped we are to develop standards that achieve that objective.
When our terms conclude on June 30, 2020, we’ll pass the torch to incoming chairs Rich Jones (FASB) and Joel Black (GASB). They’ll put their own stamp on the Boards’ pursuit of continuous improvement, and will undoubtedly continue the spirit of cooperation, dialogue, and collaboration that have become the hallmarks of our Boards. We encourage you to support them through your continued interest and involvement in the standard-setting process.
The views expressed in this article do not necessarily reflect the views of the FASB and GASB. Official positions of the FASB and GASB are arrived at only after extensive due process and deliberation.