COVID didn’t derail FAF, FASB and GASB

Responding to the COVID-19 pandemic was very much on the agenda at the Financial Accounting Foundation in 2020, but that didn’t keep it, and the two U.S. accounting standard-setting boards that it oversees, from a busy agenda that included major leadership changes, continued stakeholder outreach, and the release of a number of standards.

The foundation’s annual report, which was released this week, highlights the efforts of both the Financial Accounting Standards Board and the Governmental Accounting Standards Board to support users and stakeholders during the pandemic, while also continuing with their central missions.

“Looking back on the tumultuous events of 2020, we are proud of the remarkable leadership the FASB and the GASB showed,” FAF chair Kathleen Casey and executive director John Auchincloss wrote in their introduction to the report. “They moved rapidly to adjust effective dates for new standards, provided swift guidance for pressing accounting issues arising from the pandemic.”

The boards’ efforts included answering hundreds of stakeholder questions, delaying the effective dates on some standards like leasing and revenue recognition for private companies, launching online resource pages, providing educational papers and extra guidance related to pandemic-related legislation like the CARES Act, and more.

“State and local governments became overstretched as the pandemic took hold, so the board took action to provide a variety of tools to help ease their accounting burdens,” GASB’s chair, Joel Black, wrote in his comments in the report. “Almost immediately, we offered an emergency toolbox to help stakeholders quickly identify specific guidance relevant in the current circumstances — even if they had never applied it previously.”

Black took the helm at GASB on July 1, 2020, on the same day Richard Jones was installed as the new chair of FASB. The leadership handover had been prepared well in advance, but still represented a major change in the midst of the pandemic.

In his comments in the report, Jones noted that he was worried that the pandemic would derail FASB’s core work. “Initially, I was concerned that, due to the demands of the COVID-19 crisis, our stakeholders would lack the bandwidth to participate in our standard-setting process,” he wrote. “My concerns were unfounded. Despite many challenges, [stakeholders] continue to actively engage with us. Over the past year, I’ve participated in almost-daily virtual meetings with many diverse stakeholder groups.”

He wasn’t alone; the board reported 585 project-specific outreach meetings in 2020, answering 228 technical questions and 101 speaking engagements, while GASB reported that its members made 98 speaking appearances and held 34 leadership stakeholder outreach meetings.

That input helped the boards continue their core missions of issuing guidance, exposure drafts, and new and proposed standards, including key standards on accounting for convertible instruments and contracts in an entity’s own equity; public-private and public-public partnerships; presentation and disclosures by nonprofits for contributed nonfinancial assets; investments in equity securities; derivatives and hedging; and many more.

The report also noted the addition in August 2020 of a new technical director at FASB, Hillary Salo, who will serve as chair of the Emerging Issues Task Force, and spring 2021 of Alan Skelton as GASB’s first director of research and technical activities in more than 30 years.

The foundation also mourned the loss of David Villa, who had been a trustee since 2018, and died earlier this year.

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