The US-based Financial Accounting Standards Board (FASB) has announced that its top priority for 2025 is to determine the next set of issues to address, reports BloombergTax.
This decision will be based on input from businesses and users of financial statements.
The board plans to engage in an agenda consultation in 2025, following a previous round of feedback in 2021.
The feedback prompted FASB to initiate projects that are currently underway, addressing accounting for software costs, government grants, and environmental credit programmes.
Alongside, FASB continues to work on filling gaps in the US financial reporting framework.
Stakeholders including financial statement preparers, investors, analysts, and academics are all invested in the outcomes of FASB’s work.
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By GlobalDataDuring 2024, FASB issued multiple updates to GAAP and completed its internal handbook which provides foundational concepts for financial reporting.
FASB chair Richard R Jones outlined additional priorities for 2025, which include advancing proposals on government grants and derivatives, as well as progressing research into accounting for intangible assets and financial performance metrics.
Jones added: “We have a robust set of accounting standards.
“But there is a continuous improvement and maintenance element to this to make sure that they are always fit-for-purpose.”
In December 2024, FASB sought opinions on updating rules on recording intangible assets, such as patents and trademarks, considering whether to develop a model or focus on subsets of intangibles.
LSV Asset Management accounting and tax research director Ron Graziano noted that while acquired intangibles such as patents or customer relationships appear on balance sheets, internally generated intangibles often do not.
He suggested that increased disclosure about costs related to intangible assets could be beneficial for investors, as some expenses contribute to future cash flows.
FASB also invited comments in November 2024, on whether to undertake a new project to better define non-GAAP measures—company performance metrics not covered by US rules.
Continuing into 2025, FASB will review feedback on its proposal to expand exceptions to complex derivatives accounting rules.
The July proposal from FASB would increase the “scope exception,” allowing certain transactions to bypass fair value calculations each period.
FASB expects to receive public comments by 31 March 2025, on its draft plan for government grants accounting, which would necessitate businesses to disclose the nature and significant terms of a grant.
FASB’s approach is based on guidance from the International Accounting Standards Board.
Additionally, FASB board members Joyce Joseph and Frederick Cannon have advocated for disclosures that clarify the potential future cash flows of businesses with respect to government grants.
