VSCPA A&A Committee Comments on FASB's Proposal to Eliminate Extraordinary Items
Oct. 1, 2014
File Reference No. 2014-220
Financial Accounting Standards Board
401 Merritt 7, PO Box 5116
Norwalk, CT 06856-5116
Submitted via email to [email protected]
Re: Proposed Accounting Standard Update: Income Statement — Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items
Dear Technical Director:
The Virginia Society of CPAs (VSCPA) Accounting and Auditing Advisory Committee has reviewed the proposed Exposure Draft (ED), Income Statement — Extraordinary and Unusual Items (Subtopic 225-20) Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items issued by the Financial Accounting Standards Board (the Board). The VSCPA is a leading professional association dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. The VSCPA membership consists of more than 11,000 individual members who actively work in public accounting, private industry, government and education. We appreciate the work the Board has undertaken on this effort and the opportunity to respond to this ED.
The VSCPA offers the following comments related to the “Questions for Respondents” section of the ED.
1. Should the concept of extraordinary items be eliminated from GAAP? If not, why not?
Yes. We support the Board’s proposal to eliminate the concept of extraordinary items from GAAP. The proposed guidance will save time and help to reduce costs in the financial reporting process without resulting in a loss of decision useful information to users of financial statements.
2. Should the proposed Update be applied prospectively to extraordinary items occurring after the date of adoption?
Yes. We support the position that the proposed Update be applied prospectively after the date of adoption. Applying the proposed Update retrospectively would create additional work with no apparent benefit.
3. Should the proposed Update be effective in annual periods, and interim periods within those annual periods, beginning after Dec. 15, 2015, with early adoption permitted?
Yes. We agree with the Board’s position that the proposed Update would be effective in annual periods, and interim periods within those annual periods, beginning after Dec. 15, 2015, with early adoption permitted. The early adoption would allow organizations to benefit from the presumed cost savings as soon as possible.
4. Should there be a delay in the effective date for entities other than public business entities and why?
No. We do not believe there is any need to delay the effective date for entities other than public business entities given that the proposed guidance should save time and reduce costs during the financial reporting process,
We support the Board’s efforts with regards to the “Simplification Initiative” to identify, evaluate and improve areas of generally accepted accounting principles for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of the financial statements. We believe the proposed accounting standard Update will help the Board meet its objectives with the “Simplification Initiative.”
Again, the VSCPA appreciates the opportunity to respond to this Exposure Draft. Please direct any questions or concerns to VSCPA Government Affairs Director Emily Walker at [email protected] or (804) 612-9428.
Charles M. Valadez, CPA, CGMA, CITP
2014–15 VSCPA Accounting & Auditing Advisory Committee
Charles Valadez, CPA — Chair
Joshua Keene, CPA — Vice Chair
Michael Cahill, CPA
Mitchell Hartson Jr., CPA
Staci Henshaw, CPA
James Nesbitt, CPA
Brent Simer, CPA