This paper provides an overview of proposed and final standards issued by FASB in the third quarter along with updates on outstanding exposure drafts and ongoing projects. The developments included in this update are intended to be a reminder of recently issued accounting guidance that may affect you. This quarterly update is intended as general information and should not be relied upon as being definitive or all-inclusive.
FASB significantly ramped up standard setting on several projects—joint venture formations, segment reporting, and a long-running item related to incorporating certain SEC disclosures into GAAP. These final accounting standards updates (ASUs) have been ratified but not issued by publication of this document. Before year-end, FASB also plans to finalize new crypto asset guidance.
FASB issued one exposure draft that would require more detailed expense breakouts for public business entities (PBEs) and before year-end plans to issue final standards on crypto assets, segment reporting, and income tax disclosures and an exposure draft on induced conversions.
In August, FASB finalized a new chapter in its Conceptual Framework, which guides the board in setting consistent standards. This is nonauthoritative and does not change GAAP. Concepts Statement No. 8, Chapter 5, Recognition and Derecognition, sets forth criteria and guidance on when an item should be incorporated into and removed from financial statements. It provides three criteria an item should meet to be recognized in financial statements. Those criteria are:
- Definitions – The item meets the definition of an element of financial statements.
- Measurability – The item is measurable and has a relevant measurement attribute.
- Faithful Representation – The item can be depicted and measured with faithful representation.
Derecognition—the process of removing an item from the financial statements of a reporting entity as an asset, liability, or equity—should occur when an item no longer meets any one of the recognition criteria.
ASU effective dates are summarized for PBEs in Appendix A and for all other entities in Appendix B. Appendix C has additional information on each ASU (sorted chronologically by effective date), as well as links to related FORsights™ articles.
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