Last fall, Financial Accounting Standards Board (FASB) Chairman Russell G. Golden outlined a Vision for the Future in a speech that saluted FASB's 40th Anniversary and charted a course for FASB's next 40 years. In his remarks, Golden outlined five key goals for FASB--improving operations, reducing complexity, improving communication, enhancing collaboration with the Financial Accounting Foundation (FAF) and Governmental Accounting Standards Board (GASB), and working with FAF and the U.S. Securities and Exchange Commission to realize a vision for the future.
How well has the FASB executed on the goals that Golden laid out last year? An edited transcript of Financial Executive magazine's interview with FASB Chairman Russell G. Golden follows.
FINANCIAL EXECUTIVE: Could you share with us how far you believe FASB has come over the past year toward reaching the goals you discussed in your speech?
GOLDEN: On the first goal--working hard to improve the efficiency and effectiveness of our operations--is one we've made progress on this year.
I am most proud of improvements to our pre-agenda research process, which allows us to take a more systematic approach to deciding what areas we should address. This helps us clearly understand the problem that's been identified while allowing us to consider some cost-effective solutions before getting too far along in a project.
We're also holding quarterly agenda meetings with the board. During these meetings, the staff tells us the status of their pre-agenda work. We then direct the staff to do additional work we think needs to be done, or if we should add the project at all.
I think that by making this a quarterly process, all the board members can have an expectation of when the research will be done. Furthermore, it gives constituents a better understanding of the timing of a project.
We've programmed these meetings at certain times so that if we decide to add a project, and that it's relevant to leverage the Emerging Issues Task Force (EITF), we are able to leverage the knowledge and experience of the Task Force members.
FE: Tell us about FASB's progress to date on the goal of reducing complexity and costs.
GOLDEN: Board members Jim Kroeker and Darryl Buck have done an excellent job of leading this initiative, which seeks ways of reducing complexity and the cost of accounting standards for both private and public companies, while maintaining or improving the relevance of reported information to users. We have done a few things around this goal. First, we developed a complexity policy. As part of this policy, board members will review standards before they are issued to determine if something is going to be more or less complex than it needs to be. I think it's going to take a look-back before we finalize anything to see that it's as easy as possible.
Also, we are starting to do a look-back of existing accounting standards to determine if there are areas in Generally Accepted Accounting Principles...