December has been a busy month for the standard setters, with interesting developments at the FASB, AICPA, and GASB.
On December 3, the FASB published a proposed ASU on the measurement of credit losses for accounts receivable and contract assets for private companies and certain not-for-profit entities. The FASB and the Private Company Council (PCC) have undertaken this project to address challenges applying CECL to current accounts receivable and current contract assets arising from revenue transactions. The proposed ASU introduces a practical expedient and an accounting policy election for private companies and certain not-for-profit entities. Comments on the proposed ASU are due by January 17, 2025.
In addition, on December 17, the FASB published a proposed ASU intended to improve the financial accounting for and disclosure of financial activities related to environmental credits and environmental credit obligations. The proposed ASU provides recognition, measurement, presentation, and disclosure requirements for all entities that purchase or hold environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. Stakeholders are encouraged to review and provide input on the proposed ASU by April 15, 2025.
On December 19, the FASB issued an ITC regarding intangible assets in response to feedback received as part of the feedback received from the ITC for agenda consultation. Comments are due May 30, 2025.
The Financial Accounting Foundations (FAF), the parent organization of the FASB and GASB, issued its review of the Private Company Council. While generally determining that the PCC is performing well, changes are being made to the agenda process as well as the recruitment process to address concerns raised during the review.
On December 9, the AICPA released a new guide on Business Combinations. The new AICPA guide aims to assist practitioners in the accounting and valuations of mergers, acquisitions, and related transactions. It covers various topics, including identifying the acquirer, measuring the consideration transferred, recognition and measuring goodwill or a gain from a bargain purchase, among other topics.
On December 16, the AICPA’s Professional Ethics Executive Committee (PEEC) issued new ethics guidance on recruiting services for attest clients and it released an exposure draft addressing simultaneous employment with an attest client. The revised “Executive or Employee Recruiting” guidance prohibits members from advising on employment terms, conducting candidate searches or reference checks, and recommending only one candidate for key positions at attest clients. These changes aim to protect independence and align with international standards, becoming effective January 1, 2026, with early implementation allowed.
The exposure draft proposes a new definition and updated interpretation of “Simultaneous Employment or Association With an Attest Client” to address changes in work practices. It prohibits covered members from holding simultaneous employment or association with attest clients, includes exceptions for independent contractors, and allows firms to apply the “Conceptual Framework for Independence” in certain cases. If finalized, practitioners must follow new prohibitions, exceptions, and reporting requirements, particularly when considering employment offers from attest clients.
On December 31, Barry Melancon will officially retire as president and CEO of the AICPA after almost 30 incredible years. Barry has made tremendous contributions to the profession, leaving behind a rich legacy. Mark Koziel will take over as CEO of the AICPA on January 1, 2025. We are very excited for Mark and wish him luck in this transition!
While this newsletter is being sent a little earlier in the month, we will include any standards issued between now and the end of the year in our January edition. Stay tuned for more updates in the New Year!
