Navigating Accounting Standards Updates
By Nathaniel Jordan, CPA
In 2018, the Financial Accounting Standards Board (“FASB”) issued 20 accounting standards updates. Implementation dates were varied, and the standards themselves were complex and wide-ranging. The updates covered topics such as stock compensation, fair value measurement disclosure, and leases, among others. Many more standards updates will be issued in 2019 and beyond.
As a CFO, controller, bookkeeper, or any other integral part of the financial reporting cycle, how do you know which standards apply to accounting for your business? How do you know when to early adopt standards, or if early adoption is even permitted? Even if you know which standards apply to your business, how do you go about implementing them in a practical way? Understanding the answers to those questions will not only allow you to stay up to date on financial reporting on an ongoing basis, but will also improve communication between you and your CPA when it’s time to produce financial statements to be audited after year-end. Additionally, understanding what’s on the horizon as it relates to new and changing standards will position you for less headaches when it comes time for implementation.
Fortunately, FASB has tools to help educate interested parties on interpretation and implementation of standards updates. In addition to the full text and corresponding summary of each standards update, which includes useful information covering the what, why, how, and when, FASB.org includes links to videos, articles, and various other professional education materials to assist in better understanding the updates. To allow for parties affected by the changes to ask specific questions related to implementation of the standards within the context of their businesses’ unique circumstances, FASB provides a technical inquiry service. FASB uses those questions to educate practitioners and to identify areas of concern that may need to be addressed on a broader scale.
In addition to staying in regular contact with your CPA about FASB standards updates and how they may affect your business, consider also utilizing the resources available directly from FASB itself.