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State Board Report

November 2013

Representatives from 45 Boards of Accountancy heard Financial Accounting Standards Board Chairman Russell G. Golden discuss the challenges faced by the FASB in exercising their responsibility to both preserve and evolve Generally Accepted Accounting Principles (GAAP). “Even as we stay committed to global convergence, we must address the pressing needs of users in our individual capital markets,” Mr. Golden told the NASBA Annual Meeting attendees on October 28, in Maui. He explained that since the 2002 agreement with the International Accounting Standards Board (IASB), the two groups had worked together to more closely converge GAAP with International Financial Reporting Standards (IFRS), and through next year the FASB’s top priority will be to complete major convergence projects. These include issuing final standards in 2014 on two financial instruments projects (impairment, and classification and measurement), a final standard on leasing by late 2014, and decisions on insurance after that. Mr. Golden stated the FASB should advance the development of IFRS through active participation in the IASB’s Accounting Standards Advisory Forum, which held its first meeting in April. “In all instances, the FASB’s objective will be to promote the improvement and convergence of GAAP and IFRS,” he said.

Chairman Golden called for “a new, decentralized, multi-lateral model of international standard setting that is consistent with the goal of promoting greater convergence in global financial accounting standards.” While being committed to global convergence, he underscored the need to address “the pressing needs of users in our individual capital markets.”

Domestically, the Financial Accounting Foundation created the Private Company Council in May 2012. Six months ago the FASB and the PCC jointly issued an invitation to comment on an updated private company decision making framework. Mr. Golden announced that the FASB expects to issue a final document in the coming weeks. He explained: “Our effort is to develop a common body of standards under GAAP – not ‘big GAAP’ and ‘little GAAP’; not ‘private GAAP.’ It is the same principle that is guiding our efforts to contribute to the development of a common – but not necessarily identical – body of global accounting standards.”

A licensed CPA in Connecticut and Washington, Mr. Golden told the NASBA Meeting: “I am particularly honored to have been asked to join you today because I consider our 55 State Boards of Accountancy to be the linchpin of the accounting profession in the United States. In setting a high bar for admission to our profession, our State Boards are dedicated advocates for the public interest. They promote ethics and integrity. And they provide strong leadership on critical issues facing the accounting community. In my more than 20 years in the profession, I have been impressed repeatedly with how well our State Boards do their very important jobs.”

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