FASB projects underway for 2024

Jennifer Louis, CPA

The Financial Accounting Standards Board (FASB) maintains an on-going technical agenda to provide important status updates about potential changes to generally accepted accounting principles (GAAP). We highly recommend you stay up-to-date on these potential changes in order to anticipate the impact on your financial statements and provide critical feedback that may influence future GAAP. 

FASB topics in final phases of deliberation 

First, let’s look at the following topics that have completed an exposure draft comment period and are in the final phases of redeliberation and possible issuance: 

• Profits interest awards – Clarifies when this form of incentive compensation and similar should be accounted for under Topic 718 as stock-based compensation or under Topic 710 as general compensation (like a profit-sharing arrangement). 
• Purchased financial assets – Expands the scope of the purchased credit deterioration model under Topic 326 to all loans acquired in a business combination and modifies presentation of expected credit losses for acquired financial assets. 
• Disaggregation of income statement expenses – Expands the level of detail that public business entities provide about specific expense categories (such as cost of sales). 
• Interim reporting – Clarifies when the guidance of Topic 270 is applicable and improves the navigability of the required interim disclosures. 
• Conceptual Framework – Defines the acceptable measurement methods for initial recognition and subsequent measurement. 
• Codification improvements – Remove references to the “concepts statements”. 

FASB topics with exposure drafts and an outstanding comment period

FASB has the following topic with an exposure draft with an outstanding comment period. This topi is the Induced conversions of convertible debt instrument. It clarifies when certain settlements using terms different from stated contractual provisions should be accounted for as an induced conversion or an extinguishment. Comments are due by March 18, 2024. 

FASB topics undergoing ongoing FASB deliberations

The following are topics undergoing ongoing FASB deliberations: 

• Accounting for and disclosure of software costs, to modernize and enhance transparency about an entity’s software costs. 
• Accounting for environmental credit programs, including the nongovernmental creators of voluntary programs. 
• Accounting for government grants by businesses. 
• Topic 815 – Derivatives scope refinements. 
• Topic 815 - Hedge accounting improvements. 
• Codification improvements next phase. 

• Statement of cash flows targeted improvements.