On the Horizon: Highlights from March 7 meeting

Contents FASB
     Highlights from March 7 meeting posted

     Interpretation on auditor reporting issued

FASB Highlights from March 7 meeting posted All decisions reached at Board meetings are tentative and may be changed at future meetings. 

The FASB met on March 7 to discuss stakeholders’ comments on two proposed ASUs featuring targeted improvements to the new leasing guidance and amendments to the disclosure requirements for fair value measurement. These discussions are summarized below. 

Targeted improvements to ASC 842 

The Board discussed feedback received on the optional transition method included in the proposed ASU, Leases (Topic 842): Targeted Improvements, and tentatively decided to affirm this proposal. If an entity elects to apply this new transition method, the Board clarified, it should include the disclosures required under ASC 840, Leases, including the operating lease obligations disclosure in ASC 840-20-50-2, in the financial statements for comparative periods. 

The Board will discuss comments received on the proposed practical expedient related to the separation and allocation requirements for lessors, also included in the proposed ASU, at a future meeting.  

Disclosure requirements for fair value measurements

The Board continued its discussion of the amendments in the proposed ASU, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, and confirmed certain amendments in the proposal, including previous tentative decisions. It also tentatively decided to require prospective transition for the narrative description of disclosure uncertainty.

The effective date of the amendments upon issuance in an ASU for all entities would be for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. Early adoption would be permitted.

The Board directed the staff to draft an ASU for vote by written ballot. 

AICPA Interpretation on auditor reporting issued The Auditing Standard Board (ASB) of the AICPA issued Interpretation 4, Reporting on Audits Conducted in Accordance With Auditing Standards Generally Accepted in the United States of America and the Standards of the PCAOB, to AU-C section 700, Forming an Opinion and Reporting on Financial Statements, to provide guidance on compliance with AU-C section 700 when also conducting the audit under revised PCAOB reporting standards. The guidance is in the form of questions and answers on common fact patterns and includes illustrative examples and reports.

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