FASB Votes to Move Subsequent Events, Going Concern to Codification Project
September 19, 2007
At its board meeting on Sept. 19, 2007, the Financial Accounting Standards Board (FASB) voted to move projects on Subsequent Events and Going Concern/Liquidation Basis of Accounting from its technical project agenda to its codification project.
For the going concern/liquidation basis of the accounting project, staff described it as essentially a "lift and paste" from the auditing literature to the accounting literature, with certain wording changes to direct the guidance to preparers vs. auditors. Additionally, staff will include a scope exception regarding subsequent events, for instances in which the "Type 1," "Type 2" general guidance for subsequent events conflicts with other literature (they said FIN 48 was one such exception). Staff also noted that while the board will discuss these changes as part of the codification project at a future board meeting, this particular change will be one of those highlighted in the Notice to Recipients of the codification, and the proposed codification will go through an extended public review period.
Separately, FASB discussed its forthcoming Preliminary Views on the Reporting Entity (part of its conceptual framework project) and discussed mergers and acquisitions by not-for-profit organizations. Additional details are in FASB's board handout.
Prepared Sept. 26, 2007 by Edith Orenstein, Director, Technical Policy Analysis, Financial Executives International (FEI). This summary does not represent FEI opinion unless specifically noted above.