Revenue Recognition Tops List of FASB Priorities

- Source: FASB, RevenueRecognition.com

FASAC's annual survey on the priorities of the FASB provides valuable perspectives and observations about the Board's process and direction. The 2005 survey asked Council members, Board members, and other interested constituents to provide their views about the FASB's priorities, future financial reporting issues, simplification, the right level of implementation guidance, and differential accounting standards for certain entities.

Key observations and conclusions from the responses to the 2005 survey are:

• For the fourth consecutive year, revenue recognition topped the list of issues that Council members believe should be the Board’s priority.

• FASAC members believe that fair value issues, lease accounting, and stock compensation arrangements will require the Board’s attention in the future.

• FASAC members had many suggestions for the Board on how to address simplification, including field testing proposed standards more aggressively, giving additional weight to cost-benefit considerations, and using more examples to illustrate concepts.

• FASAC members generally believe that the Boards’ methods to issue implementation guidance are adequate. However, responses varied on the issue of whether the Board provides the right amount of guidance. Some believe the Board does not provide enough guidance, while others believe the Board provides the right amount. Still others believe the amount of guidance is excessive.

• Nearly all FASAC respondents believe that a separate set of accounting standards for private companies is not warranted. Most agreed that the Board should continue to address the issue on a case-by-case basis and provide modifications to disclosures or to effective dates of standards when appropriate.

Twenty-seven current Council members, 7 Board members, and 20 other constituents (including several members of the Small Business Advisory Committee and the User Advisory Council) responded to the survey.