NEWS RELEASE 02/15/12
FAF to Conduct Post-Implementation Reviews on FASB and GASB Accounting StandardsNorwalk, CT, February 15, 2012—Accounting standards governing financial reporting for business combinations, operating segments, and government deposit and investment disclosures will be the next subjects of post-implementation reviews conducted by the Financial Accounting Foundation (FAF), the oversight body of the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB), the FAF announced.
The FASB sets accounting standards for companies, both public and private, and not-for-profit organizations, while the GASB sets standards for state and local governments. The post-implementation review (PIR) process is intended to assist the FAF’s Board of Trustees with their ongoing efforts to evaluate the effectiveness of the standard-setting process for both the FASB and the GASB.
The standards selected for review are:
- FASB Statement No. 141R, Business Combinations (FAS 141R)—requires an acquiring organization to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired organization at the acquisition date, measured at their fair values as of that date, with limited exceptions.
- FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (FAS 131)—requires that public companies report financial and descriptive information about their reportable operating segments.
- GASB Statements No. 3, Deposits with Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements, and No. 40, Deposit and Investment Risk Disclosures—require note disclosures about deposits and investments, including related credit risks. In addition, Statement 3 also provides accounting guidance for repurchase and reverse repurchase agreements.
The FAF is coordinating with the International Accounting Standards Board (IASB) on its reviews of IFRS 8 (Operating Segments) and IFRS 3 (Business Combinations).
The FAF PIR team completed its first review of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48) (codified in Accounting Standards Codification Topic 740, Incomes Taxes), in January 2012. The final report and news release of that study are available on the FAF website. The FASB will provide a written response to the PIR report in the coming weeks.
The PIR process is designed to be independent of the standard-setting process of the FASB and the GASB. The FAF review staff reports to the Trustees and FAF president, but members are drawn from experienced FASB and GASB staff to promote a collaborative review process aimed at improving the standard-setting process.
More information on the FAF’s post-implementation review process can be found on the FAF website . Stakeholders who would like to participate in PIR surveys conducted by the Financial Accounting Foundation should register online.
About the Financial Accounting Foundation
The FAF is responsible for the oversight, administration, and finances of both the Financial Accounting Standards Board (FASB) and its counterpart for state and local government, the Governmental Accounting Standards Board (GASB). The Foundation is also responsible for selecting the members of both Boards and their respective Advisory Councils.