NORWALK, Conn. (7/9/13)--Three new proposals were issued for public comment by the Financial Accounting Standards Board (FASB) and all three are intended to address private-company stakeholder concerns raised about the relevance and complexity of different aspects of U.S. Generally Accepted Accounting Principles (GAAP).
FASB Chairman Russell G. Golden, in a press release last week, said the proposals should reduce "the costs and complexity for preparers in valuing and accounting for intangible assets acquired in business combinations, goodwill, and certain types of interest rate swaps."
FASB's Private Company Council (PCC) is leading its efforts on these proposals, and unlike typical rule-makings, PCC's primary objective is to recommend to FASB whether to provide exemptions from or alternatives to existing GAAP standards, most of which credit unions already follow. Before being incorporated into U.S. GAAP, PCC recommendations will be subject to a FASB endorsement process.
Comments on the three new FASB Exposure Drafts are due by Aug. 23. They address:
- Accounting for Identifiable Intangible Assets in a Business Combination (PCC Issue No. 13-01A), which modifies the requirement for private companies to separately recognize fewer intangible assets acquired in a business combination;
- Accounting for Goodwill Subsequent to a Business Combination (PCC Issue No. 13-01B), which would permit amortization of goodwill (the residual asset recognized in a business combination after recognizing all other identifiable assets acquired and liabilities assumed) and a simplified goodwill impairment model; and
- Accounting for Certain Receive-Variable, Pay-Fixed Interest Rate Swaps (PCC Issue No. 13-03), which would give private companies, other than financial institutions, the option to use two simpler approaches to accounting for certain types of interest rate swaps that are entered into by a private company for the purpose of economically converting its variable-rate borrowing to a fixed-rate borrowing.
Comments can be submitted using the first resource link below.
We briefly discussed these proposals (which had not yet been released) with our Accounting Subcommittee on our May call; we will be analyzing these proposals and soliciting input through our Comment Call process.
Also from FASB, the newest edition of the FASB Accounting Standards Codification, four-volume bound edition of the all FASB online codifications as of Oct. 31, 2012, is now available. The volumes serve to organize thousands of U.S. GAAP pronouncements and include relevant Securities and Exchange Commission guidance that follow the same topical structure in separate sections in the codification. See the second resource link for more information.