This year should be one of expansion and progress at the Financial Accounting Standards Board. Though the profession will not see the issuance of many final standards, the year's projects should lead up to a productive 2008.Accountants will be keeping their eyes on several crucial projects - but the most fundamentally important may be that of the Conceptual Framework. This project will set the underlying philosophy of accountancy, the basic concepts on which generally accepted accounting standards are built.

As 2006 came to a close, the board was still receiving comments on a preliminary views document on the objectives and qualitative characteristics of financial statements. In fall 2007, the board should issue an exposure draft, the comments on which may well set the direction of accounting standards well into the 21st Century. As the board redeliberates that issue, it will be piecing together a preliminary views document on the elements of financial statements and their recognition, defining such basic concepts as assets and liabilities.

In February, FASB will hold a roundtable discussion on measurement at its Norwalk headquarters. One of the profession's critical issues, measurement relates to the most controversial aspects of several standards that were written recently or are still being deliberated, including stock-option compensation, business combinations, fair value measurements, and many others.

The board also hopes to issue a PV on the reporting entity aspect of the framework. In September, FASB and the International Accounting Standards Board, which are working together to develop a common framework, reached most of the decisions needed for a first comment document. The project deals with definitions of individual and group reporting entities, and with control issues such as the relationship between the power element and the benefits element, and the link between the two.

NOW - SOME STANDARDS!

The board will wrap up a couple of standards on business combinations in 2007 that it has been working on in conjunction with the IASB. One will provide guidance on applying the acquisition method of accounting for mergers and acquisitions. The other will set a standard on non-controlling interests.

Both boards also expect to issue initial exposure documents on liabilities and equity, which for FASB is the second phase of a project on financial instruments. This phase grapples with the accounting and reporting of instruments with characteristics of equity, liability or both, and assets. A PV should be issued by summer.

The boards are also working jointly on a standard on financial statement presentation, hoping to establish more consistency in the classification and display of items in a financial statement and the aggregation of line items into subtotals and totals. The boards hope to issue very similar PVs in the second quarter. These two documents should be issued by summer's end. A mutual PV on revenue recognition/liability extinguishment is expected by Christmas.

Continuing its objective of converging U.S. standards with those of the IASB, FASB will issue a draft of updated standards on earnings per share and on income taxes. Though both share similar principles with international standards, certain differences in application are resulting in less-than-ideal comparability of financial reports. The two boards are working jointly to issue an ED in the first quarter.

In October, FASB issued drafts of standards on M&A by nonprofit organizations. One was on M&A itself, the other on goodwill and other intangibles. Comments are due on Jan. 29, 2007, with a roundtable discussion slated for March 27.

Last year the board issued the first part of a standard on post-retirement benefit obligations, including pensions. The board is now working on an update of illustrations and application guidance, with a final document expected in the first quarter of 2007. The board is then likely to take up the second phase of the project, though it is not yet predicting when a first document will be issued, or whether it will be a proposed standard or merely a comment document.

FASB is also working on a project on accounting for and reporting of events that occur after a balance-sheet date. It added that an exposure draft should be ready in the second quarter of 2007.

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