The FASB issued ASU 2025-05 yesterday which amends the CECL guidance. It includes both a practical expedient AND an accounting policy election that impacts private companies. While technically not effective until annual reporting periods beginning after December 15, 2025, it is early adoptable for any financial statement not yet available to be issued (think about those 6/30 year ends!) In addition, the FASB currently identifies FOUR other ASUs as expected to be issued in the third quarter of 2025, so stay tuned. Furthermore, we expect an exposure draft to be issued this month. We’ll continue to track the issuance of these standards and keep you informed!
The GASB was relatively quiet in July, with limited new developments. The comment period for the Severe Financial Stress preliminary views concluded at the end of June. The July meetings, that took place this week, included agenda items on Subsequent Events and Infrastructure Assets, focusing on stakeholder feedback and staff recommendations. The Board will also discuss the satisfaction of a performance obligation within the Revenue and Expense Recognition project, along with a status update on the pre-agenda research into Cybersecurity Risk Disclosures.
In other exciting news, on July 2, the ASB issued a new exposure draft. The proposed SAS Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements, proposes to supersede AU-C section 240, and amend various other AU-C sections as well. The ASB believes the proposed SAS will help auditors perform appropriate audit procedures when fraud or suspected fraud is identified in an audit of financial statements and will drive auditors to better exercise professional judgment and maintain professional skepticism in planning and performing their audits. The comment period ends October 3. See our blog below that covers the main elements of the proposal.
Although PEEC had a relatively quiet July, they have been preparing for their upcoming Q3 meeting, scheduled for August 6 and 7, 2025. Their agenda includes several important projects and topics, including guidance on artificial intelligence, sustainability, digital assets, and quality management.
We continue to not so patiently wait for the 2025 Compliance Supplement to be issued. Even the AICPA has stopped trying to guess when it may come out. When it is issued, GLS will issue an alert so that auditors and auditees can get a jump start on their review!
NASBA and the AICPA issued the Ninth Edition of the Uniform Accountancy Act (UAA) which provides state legislatures and Boards of Accountancy with a national model. Each state would still be required to implement their own version but the UAA helps ensure consistency between states. The UAA adds an additional pathway to CPA licensure by requiring a Bachelors degree (including an accounting concentration), plus two (2) years of experience, and passing the CPA Examination. It also shifts from state-based mobility to an individual-based practice privilege. We will have a blog on the major changes in August.
