On May 11, the FASB issued an exposure draft to provide guidance for companies (both public and private) to reduce diversity in practice around accounting for profits interests. The proposal includes a new fact pattern as an example to assist preparers in determining the appropriate ASC Topic to apply to these types of arrangements. Comments are due July 10, 2023.
Additionally, on May 17, the FASB met to discuss disclosure improvements in response to the SEC’s release on disclosure update and simplification. The Board made several decisions regarding various disclosures and decided that the effective date for each amendment will be the same as the SEC’s effective date to remove that related disclosure from Regulations S-X and S-K for all entities subject to the existing SEC disclosure requirements, with early adoption prohibited. The Board decided that each amendment will be effective for all other entities two years later.
Although the GASB did not issue any exposure drafts, on May 25 the GASB added a major project on accounting and financial reporting issues for Infrastructure Assets to the Board’s Current Technical Agenda. The project will consider how infrastructure assets should be recognized and measured in financial statements and whether the optional use of the modified approach should continue to be allowed to report infrastructure assets. It will also evaluate whether additional information related to the maintenance and preservation of infrastructure assets should be presented in financial statements, and, if so, what information and where in the financial report that information should be provided. The Board decided to add a project to the agenda focusing on infrastructure assets after carefully evaluating the staff’s research findings this spring and taking into account the high level of interest from the Governmental Accounting Standards Advisory Council, the GASB’s advisory council, which ranked the project highly during its annual project prioritization.
On May 18, the AICPA issued the 4th version of its plans to improve the pipeline of accounting professionals. The detailed plan features input from a significant set of stakeholders and calls for those stakeholders to work together to increase the number of accounting graduates and the number of graduates who obtain CPA licensure. The AICPA provides some examples of what is causing the issues and the programs being introduced to address the barriers to entry.
Additionally, NASBA announced that they have extended the time to sit and pass the CPA exam from 18 months to 30 months after receiving over 850 comment letters. The original proposal was an increase to 24 months. In addition, the window is based on the date scores are released and not when the candidate sat for the exam. A big caveat is that NASBA has only changed the model rule. It is now up to the 55 State Boards of Accountancy to make changes at the state level.
