On June 29th, the Financial Accounting Standards Board (FASB) issued its
2021 FASB Agenda Consultation Report. The document summarizes comments submitted by investors during the
2021 agenda consultation project and demonstrates how those responses have shaped the FASB’s technical and research agendas and standard-setting process as of June 29, 2022.
Investors were asked to express their thoughts on where the FASB should allocate funds to fulfill its mission to establish and enhance financial accounting and reporting standards while providing useful financial information to investors and other allocators of capital.
The FASB’s members and staff began performing outreach in late 2020 with a wide and diverse group of stakeholders which included advisory groups. Feedback from these groups resulted in new research projects geared toward collecting more data for potential technical agenda projects pertaining to the following:
- Statement of Cash Flows
- Hedge Accounting Phase 2 (this research project was expanded to consider changes to the definition of a derivative)
- Consolidation for Business Entities
- Financial Key Performance Indicators (KPIs) for Business Entities
- Accounting for Exchange-Traded Commodities
- Accounting for Financial Instruments with Environmental, Social, and Governance (ESG)-Linked Features
- Accounting for Government Grants, Invitation to Comment
The report attributes strong investor participation and input to the FASB’s ability to define a new trajectory for the financial performance reporting project which:
- revised the FASB’s objective and scope to focus on disaggregation of income statement expenses
- focused the FASB’s long-term project to improve the transparency and usefulness of income tax disclosures by updating its objective and implementing a project scope that focuses on income taxes paid and the rate reconciliation table
Based on comments from investors and stakeholders, the following projects were added to the FASB’s technical agenda:
- Accounting for and Disclosure of Digital Assets
- Accounting for Environmental Credit Programs
- Accounting for and Disclosure of Software Costs
Additional Feedback
The FASB received a number of comments concerning the existing research project on accounting for and transparency regarding intangibles that have shaped the future direction of the project. A considerable amount of feedback related to projects on the existing technical agenda also was received.
Source:
FASB Publishes Its 2021 Agenda Consultation Report (fasb.org)
