FASB and IASB Ready Rollout of New Standards
Leaders of the Financial Accounting Standards Board and the International Accounting Standards Board are bracing for the release of the leasing standard and other standards that have been under development and generating debate for over a decade.
“With regard to the potential economic impact and behavioral effects, the proposed leasing standard, like all accounting standards, is intended to reflect—not drive—economic activity and behavior and to promote reporting that neutrally reflects in the financial statements a company’s activities,” said FASB chairman Russell Golden, during a speech at the American Institute of CPAs’ Conference on Current SEC and PCAOB Developments, in Washington, D.C., on Thursday. “Our aim is to create a neutral playing field that enables investors, lenders and other users of financial statements to make their own independent judgments about where to invest, based on the best possible information available. To that point, the FASB is not a government agency, accounting standards are not regulations, and the FASB does not make economic policy decisions.”
FASB plans to release the leasing standard early next year, along with accounting standards updates from its financial instruments project, including impairment and classification and measurement. The IASB has already released its own financial instruments standards.
Golden acknowledged differences between FASB and the IASB’s versions of the standards, along with disputes over the standards among others who have provided input. “You’ll note that I’ve discussed a number of projects—impairment, leases, and materiality, to name a few—about which there has been substantial disagreement among our stakeholders, and in some cases, among members of the board,” he said. “It’s our job to sort through all of those conflicting opinions and to take the action that we believe will best meet the needs of investors and others who use financial reports. Our mission at the FASB is to set standards that accurately reflect economic transactions, and provide investors and other users of financial reports with the information they need to make decisions about how to invest their capital. It is our duty as we work through the standard-setting process to take into account all points of view, including those of the investors and other financial statement users, as well as preparers and auditors. Our independence from political and special interest influence is important because, in the end, we are not in the business of picking winners and losers. Our job is to set standards that promote the reporting of useful information to those who make the decisions that drive our capital markets.” Read more on Accounting Today.