Project Update

Effective Dates and Transition Methods

Last updated on April 18, 2011.  Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

Project Objective
*User Outreach
Due Process Documents
Decisions Reached at the Last Meeting
Next Steps
Board/Other Public Meeting Dates
Background Information
Contact Information

Project Objective

The objective of the Effective Dates and Transition Methods project is to gather information the Board needs to establish appropriate effective dates and transition methods for projects on the FASB-IASB Memorandum of Understanding. This project is being conducted jointly with the IASB.

*User Outreach

In October 2010, the FASB and the IASB each published a document requesting views from stakeholders about the time and effort that will be involved in adopting several new standards and when those standards should be effective. At the March 2, 2011 meeting, the staff presented a summary of the feedback received. In view of the limited numbers of responses received from users and, for the FASB, private entities, the Boards directed the staff to undertake further outreach activities for these groups.

To help facilitate this outreach, the staff prepared a short, 5–10 minute survey that can be accessed by clicking here.

This survey requests feedback from investors regarding questions on the potential effective dates and transition methods of the following projects—Accounting for Financial Instruments, Leases, Revenue Recognition, and Insurance Contracts. For more information on these projects, the following links will direct you to their respective FASB and IASB project pages.

FASB IASB
Accounting for Financial Instruments  Accounting for Financial Instruments
Revenue Recognition  Revenue Recognition
Leases  Leases
Insurance Contracts  Insurance Contracts

The staff requests that this survey be completed by Friday, May 6, 2011. The staff plans to summarize the results of the survey and present them to the Boards. The summary will not identify any individual respondents and will present the feedback at an aggregated level. Your prompt response will be greatly appreciated.

Due Process Documents

On October 19, 2010, the Boards published, for public comment, a Discussion Paper, Effective Dates and Transition. The comment period ends on January 31, 2011.

Decisions Reached at the Last Meeting (March 2, 2011)

In October 2010, the FASB and the IASB each published a document requesting views from stakeholders about the time and effort that will be involved in adopting several new standards and when those standards should be effective. At the March 2, 2011 meeting, the staff presented a summary of the feedback received. The staff highlighted the main similarities and differences between the views expressed by FASB and IASB stakeholders.

In view of the limited numbers of responses received from users and, for the FASB, private entities, the Boards directed the staff to undertake further outreach activities from these groups as well as other stakeholders such as third-party financial software developers and data aggregators that are a source of financial information for financial statement users. Additionally, the Boards directed the staff to analyze input received from investors and other users about what transitional disclosures might be needed to help users understand the effect of the new requirements and develop recommendations for consideration at a future meeting.

The Boards discussed possible effective dates for their joint projects on Leases, Revenue Recognition, and Insurance Contracts. The Boards also discussed how they would establish effective dates and transition methods for the various other projects under way. The Boards indicated that they would determine the effective dates for the projects taking into account the significance of the accounting changes required and the methods of transition. In doing so, they will provide ample time for stakeholders to apply the new requirements.

The Boards tentatively decided to determine the effective dates and transition methods for their projects on Other Comprehensive Income, Fair Value Measurements, Financial Instruments with Characteristics of Equity, and Financial Statement Presentation on a standard-by-standard basis, as the projects come to a conclusion. The IASB decided it would determine effective dates and transition methods for its Financial Instruments project as each project phase is completed. The FASB has yet to decide on how it will determine the effective date for its Financial Instruments project.

Next Steps

The Boards will consider the results of further outreach activities and the input received from investors and other users about what transitional disclosures might be needed to help users understand the effect of the new requirements at a future meeting.

Board/Other Public Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Boards' deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard. 

March 2, 2011 Joint Board Meeting—Comment Letter Summaries

Background Information 

The revised convergence workplan issued in June 2010 identifies targeted completion dates for projects but does not address when the standards would be effective. Stakeholders in the financial reporting system will need to adapt to those new requirements and will need to plan for and manage the change. The Board recognizes the effort and cost of adapting to those new standards, and is soliciting information from stakeholders in order to better understand those concerns.

Contact Information 

Sue Bielstein
Director of Planning and Support
sqbielstein@fasb.org

Kevin Brower
Practice Fellow
kwbrower@fasb.org

Halina Maladtsova
Postgraduate Technical Assistant
hmaladtsova@fasb.org