Volume 22, No. 1 & 2: Accounting Issues: 2012 Reviewed, 2013 Previewed
Standard setters might not agree, but one could consider the setting of accounting standards to be an exercise in reaction. A company (or their team of investment bankers) finesses the treatment of a particular business transaction so as to present a glammed-up financial picture; opacity ensues, investors lose, and the standard setters return to the drawing board to devise a more glam-proof accounting standard. Those drawing board sessions can take years to complete, and have been prolonged in recent years by the cross-participation of the FASB and the IASB in setting joint standards. While the U.S. standard setting process could make glaciers look like NASCAR racers, investors should give heed to the projects on their agenda: they’re being addressed because investors’ information needs are at stake.
No major projects made the jump from drawing board to final standard in 2012. That may change in 2013: with the cooling-off of convergence efforts between the FASB and the IASB, some joint projects might finally be finished. One possibility: the revenue recognition standard should be ready for prime time. Without the dead weight added by synchronization efforts, the financial instrument projects might jump the glacier track, too. In 2012, the FASB still managed to squeeze out a few accounting standards updates, some of which will affect 2013 reporting. Presented here is a summation of the FASB’s 2012 pronouncements and its plans for 2013, finished with a look back at the accounting and business news for the year 2012.