The FASB Chairman noted that two priority convergence projects are expected to be completed first quarter, 2011. Those are:
- Fair Value Measurement (including converged definition of fair value); Seidman said this standard would have "minor differences from U.S. GAAP," and
- Statement of Comprehensive Income; Seidman said this standard 'will eliminate Other Comprehensive Income (OCI) in Shareholder's Equity.'
Seidman noted that, "In recent years, [FASB has] made communication with constituents a priority: we want constituents to be aware of what we are working on, and ... decisions made.."
We use a variety of means to involve stakeholders in the process
- We webcast our board meetings, and you can observe [the meetings in person] in Norwalk, or London [when the FASB meets jointly with the IASB board in London]
- podcasts, short summaries
- Reaching out proactively to constituents
… to give us more information to assess the costs and benefits [of proposed standards]
o Benefit: does this proposal provide useful information; does it help the company communicate about its own activities
o Cost: [information about the cost] to company to implement, and cost to users of NOT providing this information; we use a variety of [methods] to gather this information
Seidman reviewed FASB's variety of methods of outreach to constitutents (including investors, preparers, auditors and others) and encouraged constituents to provide feedback on proposed standards through comment letters and other means such as field tests and roundtables, and observed:
FASB's goal is to provide useful information to investors, lenders, donors toShe added:
nonprofits... [for which] the resulting information fairly presents financial infornmation and performance, so current and potential [investors, lenders and donors]… can make informed decisions about how to deploy their resources...
Standards also need to be auditable and enforceable, so the resulting information is viewed as a credible presentation of financial information and performance of the entity."
FAF Beta Testing Independent Post-Implementation Review
In response to a question posed by moderator Denise Lugo, a correspondent with BNA, as to whether FASB conducts a post-implementation review of standards, as the IASB does, Seidman
As a matter of fact... the FAF (Financial Accounting Foundation), our oversight body, announced last November they are establishing a function within the foundation for post-implementation reviews of FASB and GASB standards.
The function is independent, but will be staffed by FASB and GASB staff, but [not the staff that worked on development of that particular standard].
My understanding is that a beta test of the process is in the works, and they will select a standard or two in very near future.
I don’t intend to rely on that function [as the only source of post-implemementation feedback] we will keep our normal channels of communication open
SEC Staff Coordinating Meetings On Emerging Issues
Also on the subject of feedback, the FASB Chairman added:
I am very supportive of recent efforts of the SEC staff to provide a series of roundtables… to discuss emerging reporting issues. It offers a really good opportunity to more accurately diagnose, and be sure the right organization… [is addressing the issue]....It is not always a standard-setting matter… e.g. may be an auditing issue… [or other issue].
She indicated participants in such roundtables are a diverse group of SEC/FASB constituents and regulatory/standard-setting agencies.
Calls for such broad-based (multi-agency, multi-constituent) post-implementation review were made by the SEC Advisory Committee on Improvements to Financial Reporting (CIFiR, aka the 'Pozen Committee' for its chairman, Bob Pozen) and others.
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