Conceptual framework, revenue recognition top FASAC priority list.For the fifth consecutive year, the conceptual framework For the concept in aesthetics and art criticism, see . A conceptual framework is used in research to outline possible courses of action or to present a preferred approach to a system analysis project. and revenue recognition have topped the list of issues that Financial Accounting Standards Advisory Council (FASAC FASAC Financial Accounting Standards Advisory Council ) members believe should be the Financial Accounting Standards Board's (FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ) top priorities. Other key observations from FASAC's annual survey on FASB priorities provides valuable perspectives and observations about the board's process and direction. The results were reported after asking council members, board members and other interested constituents to provide their views about FASB priorities, future financial reporting issues, international convergence and educational efforts. Thirty-one current FASAC members, 7 board members and 35 other constituents responded to the survey. It should be noted that among the "other constituents" are several members of the Small Business Advisory Committee and the User Advisory Council. In addition to the conceptual framework and revenue recognition topping the list, other key conclusions, as noted in FASB's summary of survey results, include: * FASAC members believe that fair value issues, complex financial instruments and companies' strategic alliances will require the board's future attention; * Members overwhelmingly support the notion of international convergence but would advise the board to address a pressing domestic need on its own if a joint project would take significantly longer; and * While many FASAC members do not believe that the board should be in the business of developing training or educational materials, they encouraged the board to enhance its outreach Outreach is an effort by an organization or group to connect its ideas or practices to the efforts of other organizations, groups, specific audiences or the general public. to the academic community and others to ensure that today's and tomorrow's accountants are prepared for new concepts in accounting standards. Other key issues that appeared most often in FASAC members' responses include: leases, financial statement presentation and postretirement benefit obligations, including pensions. The five priorities are the same items that ranked highest in last year's FASAC member responses; however, the order has changed. In 2005, revenue recognition topped the list by itself; in the 2006 survey, revenue recognition and conceptual framework share the top spot. Other topics raised that are expected to receive consideration by the board include: fair value issues; disclosure framework; consolidations; codification The collection and systematic arrangement, usually by subject, of the laws of a state or country, or the statutory provisions, rules, and regulations that govern a specific area or subject of law or practice. and simplification sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. ; business combinations; private company financial reporting; and financial instruments and derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. . The following provides a partial list of what those who responded believe should be removed, scaled back or deferred from the board's agenda, going forward: business combinations (applying the acquisition method); insurance risk transfer; Statement 140 (transfers of financial assets Financial assets Claims on real assets. ); and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. convergence--earnings per share and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. income taxes. Some brief discussion on the top five: * Conceptual Framework: FASAC members commented on several aspects of the framework in emphasizing its importance, including the move toward principles-based standards, international convergence and several standards-level projects that the board is addressing. * Revenue Recognition: While FASAC members generally agreed on the reasons the board should address revenue recognition, and acknowledged the difficulty of the issues to be addressed in the project, their views differed on how--and how quickly--the board should proceed. * Leases: FASAC members generally support the addition of the lease project to the board's agenda. They cite form-over-substance issues, rules versus principles and the use of bright lines as reasons to reconsider re·con·sid·er v. re·con·sid·ered, re·con·sid·er·ing, re·con·sid·ers v.tr. 1. To consider again, especially with intent to alter or modify a previous decision. 2. accounting for leases. * Financial Statement Presentation: Some FASAC members noted the importance of the project, particularly in light of the emphasis on fair value and the impact of other projects on the board's agenda. * Postretirement Benefit Obligations, including Pensions: FASAC members who included this area as one of the top five priorities encouraged the board to complete Phase 1 and move on to the issues to be addressed in Phase 2. The complete survey results are available on FASB's website at www.fasb.org/fasac/resu/tspg2006.shtml. |
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