This week we review the standards issued and proposed in the second quarter of 2020 for GASB, FASB, and the AICPA. While it was a slower quarter, GASB did manage to finalize quite a few final standards while also issuing exposure drafts for the conceptual framework and a preliminary views document on revenue and expenses. FASB focused solely on COVID19. The AICPA addressed COVID19, as well, while also issuing the final standard in their reporting suite and four TQAs.
FASB has proposed a one year delay of revenue recognition for private company franchisors. In addition, public and nonpublic nonprofits will receive a delay along with nonpublic entities. The delay is due to the operational issues associated with COVID19. Originally, nonprofits with conduit debt were scheduled to adopt leases with public business entities but have now been granted a one year delay as many of these entities are hospitals and universities who are most impacted by COVID19.
This week found our regulatory agencies working hard to address COVID-19. OMB expanded its administrative relief to entities impacted operationally by current conditions. The AICPA provided guidance on how to audit inventory when you can’t be on site. The SEC provided disclosure guidance to address COVID. GASB has indicated potential delays of two major standards in response to operational issues. FASB has worked with the federal agencies to address loan modifications and TDRs in light of banks helping customers dealing with COVID fallout. Standard setting may be on hold while they all take the time to address the current situation.
FASB has issued a new set of Codification Improvements, File Reference No. 2019-800. The proposal was issued on November 26, 2019 and comments are due December 26, 2019. Codification improvements are a standard project that is always on the FASB’s agenda to fix minor issues with Codification. There are three sections in the proposal – Section A which removes references to Concepts Statements; Section B which includes all disclosure guidance in Section 50 and Section C that contains various minor edits. Most of these changes should not have a material impact on entities.
FASB has issued a proposal addressing implementation issues for its new hedge accounting rule. This technical correction addresses issues related to documentation, dual hedges and provides clarifications that forecasted transaction and hedged risk are distinct. Comments are due January 13, 2020.