The Financial Accounting Standards Board published a proposed Accounting Standards Update (ASU) on Jan. 22 focused on targeted improvements to the FASB Accounting Standards Codification, the framework used in the U.S. to organize and present accounting standards and principles.
Stakeholders are encouraged to review and provide input on the proposed ASU by April 22, 2025.
The proposed ASU is issued as part of the standard-setting board’s technical agenda project to make incremental improvements to GAAP. The project facilitates Codification updates for a broad range of topics in GAAP, and the resulting amendments are collectively referred to as “Codification improvements,” according to the FASB.
The amendments in the proposed ASU would affect a wide variety of topics in the Accounting Standards Codification and would apply to all reporting entities within the scope of the affected accounting guidance, the FASB said.
The proposed ASU addresses 34 issues, with five highlighted in bold that the FASB especially would like opinions from stakeholders:
1. Removing the Master Glossary Term Amortized Cost
2. Clarify Comparative Financial Statement Presentation Requirements
3. Correct Error in Comprehensive Income Example
4. Clarifying the Calculation of Earnings per Share When a Loss from Continuing Operations Exists
5. Clarify Disclosure Requirements for a Lessor’s Net Investment in Leases or Lease Receivables Arising from Sales-Type Leases or Direct Financing Leases
6. Clarifying Calculation of the Reference Amount for Beneficial Interests
7. Link to Master Glossary Term Class of Financing Receivable
8. Remove Previously Superseded Paragraph Related to Leases Guidance
9. Update References to Capitalization Guidance for Environmental Remediation Costs
10. Clarify Methods to Account for Treasury Stock Retirements
11. Correct Error in Repurchase Agreement Illustrative Example
12. Align Intraperiod Tax Allocation Guidance
13. Remove Reference to Pooling-of-Interests Method
14. Update References for Investments in Equity Securities Guidance
15. Update References for NFP Presentation Guidance
16. Add Reference to Other-Than-Temporary Impairment (OTTI) for Equity Method Investments
17. Update Illustrative Statement of Cash Flows for an Entity That Is in Reorganization
18. Update Fresh-Start Illustrative Example
19. Remove Reference to Cost Method Investments
20. Clarifying Guidance for the Transfer of Receivables from Contracts with Customers
21. Correct Sentence Fragment in Transfers and Servicing Implementation Guidance
22. Remove OTTI Guidance
23. Clarify the Applicability of NFP Consolidation Guidance
24. Remove the Phrase Recognized and Unrecognized from NFP and Health Care Entities Income Statement Guidance
25. Clarifying Accounting for Certain Receivables by Not-for-Profit Entities
26. Clarify NFP Receivables Guidance for Equity Securities
27. Clarify Impairment Guidance for Institutions of Higher Education
28. Remove Reference to Equity Securities in the NFP Other Investment Guidance
29. Remove Reference to a Probability Assessment in Evaluating Whether to Recognize Part of a Transaction as a Contribution
30. Update NFP Business Combinations Guidance to Reference Exceptions to the Recognition Principle
31. Clarify Relevant Guidance for an NFP That Is an Acquirer
32. Add Cross-Reference to Hedge Documentation and Hedge Effectiveness Guidance for Certain NFPs
33. Update Defined Contribution Plan Illustrative Example
34. Update Real Estate Guidance to Refer to the Use of the Proportional Amortization Method
The proposed ASU includes information on how to submit comments.
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