Accounting Issues: 2009 Reviewed, 2010 Previewed: If you want to know where funky financial reporting exists in America, consider paying a visit to the agenda of the Financial Accounting Standards Board. The charge of that particular standard setter is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.” If there’s an accounting principle or standard on their agenda, then it must be an aspect of financial reporting that is somehow not getting the job done for the FASB’s constituents - perhaps due to abusive application, the innovations of cunning investment bankers, or a combination of both. Sometimes investor information needs reform because reformulated transactions find a loophole in existing standards and disclosures; sometimes standards need repair because the existing ones were flawed on the date of issuance. (The constantly revised standards on securitization accounting are one good example.)
Accounting, the “language of business,” was severely tortured in 2009 - at least in the tongue of fair value. Both the Financial Accounting Standards Board and the International Accounting Standards Board devoted much effort to reforming fair value reporting standards - not so much because the investors of the world wanted them to fix something, but because political pressure made it impossible for the standard setters to leave fair value reporting untouched.
Despite the preoccupation with fair value reporting standards and defending themselves from political interference, the FASB issued many new standards in 2009 - some with major significance to investors, others less so. The FASB and the IASB also ramped up their convergence ambitions during the year, and set lofty new targets to meet in 2010 and beyond. The following is a rundown of the FASB’s major accomplishments for 2009, and a look at the accounting news for the year.