The Financial Accounting Standards Board issued its 2022 Investor Outreach Report on Thursday, which collects feedback from investors on various financial topics through its Investor Advisory Committee.
Launched more than 10 years ago, this investor outreach program provides due process transparency and listens to input from investors before issuing accounting standards. According to the report, the organization has interacted with 485 investors over the year ending in June 2022, and 65% were buy-side specialists or sell-side analysts.
“If there’s one message we hope to convey through this year’s report, it’s that the FASB is engaging with investors in all stages of our due process and we are actively listening and responding to their feedback,” stated FASB chair Richard Jones and technical director Hillary Salo in their opening letter.
In December 2020, FASB started an agenda consulting process to collect stakeholders’ opinion on the board’s future agenda-setting process. Staff members then reached out to professionals and asked them about the board’s financial reporting topics, how urgently each topic should be addressed, and which solutions should be considered.
The organization received a total of 522 total responses, most of them focusing on digital assets, and the organization selected the broadest 77 answers. Investors represented the majority of respondents, followed by preparers and practitioners, and their response rate was 300% greater than what FASB received for its 2016 agenda consultation. Investors identified seven financial topics as priorities
- Disaggregation of financial reporting information (18%);
- Statement of cash flows (11%);
- ESG-related transactions or disclosures (11%);
- Intangible assets (8%);
- Financial KPIs or non-GAAP metrics (7%);
- Digital assets (6%); and
- Income tax disclosures (5%).
In its report, FASB said these priorities would now be included in its technical and research agenda, while other existing projects were either modified or removed from the board’s agenda to adapt to the investors’ needs.
Currently, FASB is conducting a post-implementation review of its credit losses, leases and revenue recognition standards to measure their effectiveness in the field.