Q4 2023 Quarterly FASB Updates

Highlights

The FASB issued final guidance on segment reporting, income tax disclosures, and crypto assets in the fourth quarter. In addition, the FASB issued two exposure drafts and added several items to their technical agenda. Looking forward, the FASB is targeting to issue final guidance regarding credit losses for purchased financial assets and scope application of profits interest awards in the first half of 2024.

Final Accounting Standards Issued

• In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The new standard requires enhanced disclosures about segment information and significant segment expenses. It does not change how a public entity identifies its operating segments. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The new standard should be applied retrospectively to all prior periods presented in the financial statements.
• In December 2023, the FASBissued 2023-08, Intangibles—Goodwill and Other— Crypto Assets (Subtopic 350-60), Accounting for and Disclosure of Crypto Assets. The new standard requires assets that meet the criteria to be measured at fair value each reporting period, with changes in fair value recognized in net income. It also requires entities to present crypto assets and the associated changes in fair value separately from other intangible assets. Entities are required to provide disclosures about their crypto asset holdings on an interim basis, and a rollforward of activity in the reporting period on an annual basis. ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted.
• In December 2023, the FASBissued 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The new standard requires public business entities to disclose information about income taxes paid, specific categories in the rate reconciliation, and additional information for reconciling items that meet a quantitative threshold. The guidance should be applied on a prospective basis. For public business entities, ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. For all other entities, the standard is effective for annual periods beginning after December 15, 2025.

Exposure Drafts

The following exposure drafts are open for comment:

Taxonomy Updates

• The FASB issued for comment the Proposed Technical and Other Conforming Improvements for the 2024 GAAP Taxonomy.
• The FASB Taxonomy staff recently issued for comment the Release Notes, Proposed Meta Model Relationships. 
• The FASB issued a proposed Taxonomy Implementation Guide, Financial Statement Location Dimensions: A Guide for Preparers (Guide), based on the proposed 2024 GAAP Financial Reporting Taxonomy (Taxonomy) that is pending SEC acceptance and is subject to change until published as final. 
• The FASB issued for comment proposed improvements for the Proposed Improvements for the 2024 GAAP Taxonomy Reference Project.
• The FASB announced the availability of the 2024 GAAP Financial Reporting Taxonomy (GRT) and the 2024 SEC Reporting Taxonomy (SRT) (collectively referred to as the “GAAP Taxonomy”). The FASB also announced the availability of the 2024 DQC Rules Taxonomy (DQCRT), which together with the GAAP Taxonomy, are collectively referred to as the “FASB Taxonomies.”
• The FASB issued for comment proposed GAAP Taxonomy Improvements for Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The comment period on the proposed GAAP Taxonomy Improvements for the proposed Update ends on March 18, 2024.

Meetings

The following summarizes the various meetings with the FASB during the quarter. Full recaps and more details can be found at FASB.org.

• The FASB met on October 4, 2023 to discuss comment letter feedback and issues for redeliberations on the proposed Accounting Standards Update, Codification Improvements. The FASB also ratified the consensus-for-exposure reached by the EITF related to Induced Conversions of Convertible Debt Instruments and directed the staff to draft a proposed Accounting Standards Update.
• The FASB met on October 11, 2023 to discuss comment letter feedback on Topic 815- Hedge Accounting Improvements, and accounting for environmental credit programs.
• The FASB met on November 1, 2023 to discuss the scope application of Profits Interest Awards: Compensation- Stock Compensation (Topic 718) and accounting for government grants.
• The Investor Advisory Committee (IAC) and the FASB met on November 2, 2023, to discuss disaggregation of income statement expenses, financial key performance indicators, and emerging accounting issues and trends.
• The FASB met on November 8, 2023 to add the Statement of Cash Flows- targeted improvements to its technical agenda and continued deliberations on FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting- Chapter 6, Measurement.
• The Small Business Advisory Committee (SBAC) met on November 9, 2023 to discuss disaggregation- Income Statement Expenses, accounting for environmental credit programs, accounting for government grants, and induced conversions of convertible debt instruments.
• The FASB held a public roundtable on November 10, 2023 to discuss the post-implementation review of Topic 606, Revenue from Contracts with Customers.
• The FASB met on November 15, 2023 to discuss Interim Reporting- Narrow-scope Improvements and potential ways to improve the Codification.
• The FASB met on December 6, 2023 to discuss whether to add Definition of a Derivative to its technical agenda.
• The Financial Accounting Standards Advisory Council (FASAC) met on December 12, 2023 to discuss current hot topics, post-implementation review of ASC 606, and accounting for environmental credit programs.
• The FASB held a public roundtable on December 13, 2023 to discuss the proposed accounting standards update on the disaggregation of income statement expenses.
• The Private Company Council (PCC) met on December 14 and 15, 2023 to discuss the scope application of profits interest awards, accounting for government grants, stock compensation disclosures, induced conversions of convertible debt instruments, post-implementation review of revenue, accounting for environmental credit programs, post-implementation review of leases, post-implementation review of credit losses.
• The FASB met on December 20, 2023 to discuss agenda prioritization for several potential projects, including accounting for commodities, income taxes backwards tracing, held-to-maturity accounting, accounting for equity securities and clarifying the scope and application of Topic 480, Distinguishing Liabilities from Equity, for legal-form debt instruments.

Upcoming Effective Dates

Guidance effective in 2024 for calendar year-end public business entities (PBEs):

Guidance effective in 2024 for calendar year-end non-public entities: