July was an interesting month for the standard setters, with various developments occurring at the FASB, GASB, and AICPA.
On July 15, the FASB released a new chapter in its Conceptual Framework, explicitly addressing the measurement of items recognized in financial statements. Chapter 6 of FASB Statement of Financial Accounting Concepts No. 8, Conceptual Framework for Financial Reporting, marks the completion of FASB’s Conceptual Framework. The new chapter provides concepts for FASB to consider when choosing a measurement system for an asset or a liability recognized in general-purpose financial statements.
On July 24, the FASB published a proposed ASU to address challenges in financial reporting for derivatives. The proposal includes scope refinements to FASB ASC Topic 815 and Topic 606. The goal is to reduce the complexity and cost of evaluating derivative contracts and provide clearer guidance on accounting for share-based payments from customers. Feedback is due by October 21, 2024.
In other news, the AICPA’s Professional Ethics Executive Committee (PPEC) is set to meet on August 13, 2024. The agenda includes discussions on Section 529 Plans, Network Firms, Simultaneous Employment or Association with an Attest Client, engagements subject to SSAEs, AI, Digital Assets, Private Equity Investment in Firms, and an IESBA update.
Additionally, from July 8-9, the Governmental Accounting Standards Council (GASAC) held a two-day meeting in New York, addressing key topics such as Revenue and Expense Recognition, Infrastructure Assets, Emerging Practice Issues, Subsequent Events, Going Concern, and Feedback on GAAP Utilization. Then, from July 10-11, following the GASAC meeting, the GASB engaged in further discussions with GASAC members. The discussions focused on Revenue and Expense Recognition, Infrastructure Assets, Going Concern Uncertainties and Severe Financial Stress, and Subsequent Events.
Finally, the GASB will meet on July 31 to review the preballot draft of a proposed final Statement on the Disclosure and Classification of certain Capital Assets. This review marks an important step toward finalizing the new standard.
