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FASB posts highlights of May 27 meeting

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FASB posts highlights of May 27 meeting
     Presentation and disclosure of pensions and other postretirement benefits
     Hedging
PCAOB issues Staff Consultation Paper on using the work of specialists
Comment letters issued



FASB posts highlights of May 27 meeting

All decisions reached at Board meetings are tentative and may be changed at future meetings. Decisions are included in an Exposure Draft only after a formal written ballot. Decisions reflected in Exposure Drafts are often changed in redeliberations by the Board based on information received in comment letters, at public roundtable discussions, and from other sources. Board decisions become final after a formal written ballot to issue a final Accounting Standards Update.

At its meeting on May 27, the FASB discussed the presentation and disclosure of pension and other postretirement benefits as well as hedging activities. The Board made no technical decisions. Highlights of these discussions are featured below.

Presentation and disclosure of pensions and other postretirement benefits

The Board discussed an agenda decision related to potential improvements to the presentation of net benefit cost (including both pension and other postretirement benefit plan costs). The Board directed the staff to further evaluate modified alternatives discussed at the meeting.

The Board also discussed potential modifications to employers’ disclosures about defined benefit plans based on staff outreach and the principles in the proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting – Chapter 8: Notes to Financial Statements.

Hedging

The Board continued redeliberating the May 2010 proposed ASU, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities, focusing on the following issues:

  • Presentation of hedge ineffectiveness
  • Disclosures related to cumulative-basis adjustments in fair value hedges
  • Tabular disclosures about the effect of hedge accounting on statement(s) of financial performance line items
  • Hedge documentation requirements



PCAOB issues Staff Consultation Paper on using the work of specialists

The PCAOB recently issued Staff Consultation Paper 2015-01, The Auditor’s Use of the Work of Specialists. The paper discusses the increase in the use of the work of specialists by auditors and raises the question as to whether more rigorous standards and specific procedures are necessary to assist auditors in responding to the risk of material misstatement when using specialists’ work.

The PCAOB is seeking comments on possible alternatives to address the issues discussed and on potential changes to the standard, specifically regarding the objectivity and oversight of specialists and the use of their work. Comments are due July 31, 2015.

The Board also released an accompanying Fact Sheet, “Staff Consultation Paper on the Auditor’s Use of the Work of Specialists.”



Comment letters issued

Grant Thornton LLP recently submitted a comment letter to the FASB in response to two proposed Accounting Standards Updates, Intra-Entity Asset Transfers and Balance Sheet Classification of Deferred Taxes, which are intended to simplify income tax accounting.

The firm also submitted a comment letter in response to the FASB’s proposed Accounting Standards Update, Revenue from Contracts with Customers: Deferral of the Effective Date, which would defer the effective date of the new revenue standard.




© 2015 Grant Thornton LLP, U.S. member firm of Grant Thornton International Ltd. All rights reserved. This Grant Thornton LLP On the Horizon provides information and comments on current accounting and SEC reporting issues and developments. It is not a comprehensive analysis of the subject matter covered and is not intended to provide accounting or other advice or guidance with respect to the matters addressed in this publication. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this publication. For additional information on topics covered in this publication, contact a Grant Thornton client-service partner.