FASB chairman discusses post-convergence priorities

  • Russell Golden Image

11 Dec 2013

At the 2013 AICPA Conference on Current SEC and PCAOB Developments, FASB Chairman Russell Golden discussed the FASB's potential post-convergence project agenda.

Mr Golden spoke at length about the future of the FASB as it wraps up the final convergence projects with the IASB. Mr Golden noted that, in its future agenda, the FASB needs to create the right balance between major, long-term projects and projects that address specific issues of concern to stakeholders.

Next, Mr Golden opined that in the coming months, the FASB should evaluate an agenda that includes projects that fall into four categories. These categories, he said, have no hard and fast boundaries and will often overlap:

  • Foundational projects — Projects that have an overarching, long-standing impact on how those who use US GAAP practice accounting.
    • Conceptual framework: Mr Golden suggested reviving the conceptual framework project, citing the recent renewed interest by the IASB. The collaboration would help the FASB "continue the process of converging US GAAP with IFRS and also would address important needs for our stakeholders — and the Board."
    • Disclosure framework: Mr Golden recommended focusing on disclosure effectiveness, with the goal of improving disclosure content while also reducing the amount of disclosure content. He mentioned the FASB's consultation with the IASB and European Financial Regulatory Advisory Group (EFRAG).
  • Recognition, measurement, and presentation projects — Projects that will lead to greater transparency in financial reporting. Mr Golden suggested that the FASB examine a potential project on accounting for pensions. He noted the IASB's recent work with IAS 19, Employee Benefits, saying "We certainly plan to consider what the IASB is doing as we begin to think through our next steps. We also plan to consider changes in types of employee pension plans, including cash balance pension plans."
  • Reducing complexity — Projects that will help reduce complexity and increase the simplification of financial reporting.
  • Transition and implementation — For each significant project that the FASB undertakes, Mr Golden noted that the Board should spend "a considerable amount of time and energy addressing implementation and education issues." A transition resource group is planned, the goal of which is to better understand implementation issues before the implementation process begins. Mr Golden envisions that the group would focus on three primary areas: education, interpretation, and amendments.

The full text of Mr Golden's speech is available on the FASB website.

IASB Chairman Hans Hoogervorst also spoke at the conference — his speech measured the IASB's achievements against the SEC Staff Report published in July 2012. See our 10 December 2013 story for more on his remarks.

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