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Letter to FASB on proposed Concepts Statement No. 8, Chapter 5

February 21, 2023 

Ms. Hillary H. Salo
Technical Director, Financial Accounting Standards Board  
File Reference No. 2022-ED400 
801 Main Avenue 
PO Box 5116 
Norwalk, Connecticut 06856-5115 

Sent via email to [email protected] 

Dear Ms. Salo: 

The Virginia Society of CPAs (VSCPA) Accounting & Auditing Advisory Committee has reviewed the Exposure Draft (ED) No. 2022-ED400 — Proposed Concepts Statement No. 8 - Conceptual Framework for Financial Reporting, Chapter 5: Recognition and Derecognition, issued by the Financial Accounting Standards Board (FASB). The VSCPA is the leading professional association in Virginia 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 13,000 individual members who actively work in public accounting, private industry, government, and education. 

In general the Committee is in agreement with changes proposed in the ED. Responses to the specific questions are summarized below. 

Question 1: Do you agree that an item must satisfy all three criteria in paragraph RD5 concurrently to be recognized in financial statements? If not, why? Do you agree that the criteria in paragraph RD5 are necessary and sufficient as recognition criteria? 

Yes. The clarification of the measurement criterion removes the potentially ambiguous language or application of the previous language of “sufficiently reliable.”  

Yes. The criteria in paragraph RD5 appears adequate. 

Question 2: Do you agree that the qualitative characteristic of relevance is adequately captured in the definitions and measurability criteria, as explained in paragraph BC11? If not, why? 

Yes. The fundamental qualitative characteristic of relevance is adequately captured in the definition of an element of the financial statements and the related faithful representation aspects of (a) completeness, (b) neutrality, and (c) freedom from error. 

Question 3: Are there circumstances in which an item may meet the definition of an element (as defined in Chapter 4, Elements of Financial Statements, of this Concepts Statement) but does not meet the measurability or faithful representation criteria? Please describe those circumstances and provide a specific example or examples. 

No. Given the non-authoritative status of FASB Concepts Statements, at this time we have not identified any circumstances that are not already specifically addressed by existing authoritative standards. 

Question 4: Do you agree that derecognition occurs when an item fails to meet any one of the recognition criteria in paragraph RD5? If not, why? 

Yes. Although the financial reporting and disclosure processes for derecognition are not addressed, this is appropriate for a Concept Statement.    


The VSCPA appreciates the opportunity to respond to this ED. Please direct any questions or concerns to VSCPA Vice President, Advocacy Emily Walker, CAE, at [email protected] or (804) 612- 9428.  


George Crowell, CPA
2022–2023 Chair
VSCPA Accounting & Auditing Advisory Committee 

2022–23 VSCPA Accounting & Auditing Advisory Committee 

George Crowell, CPA — Chair 
Zach Borgerding, CPA — Vice Chair
Scott Davis, CPA 
Tamara Greear, CPA
Josh Keene, CPA 
Nick Kinsler, CPA 
Daniel Martin, CPA 
Michael Phillips, CPA 
Chris Smith-Christian, CPA 
Charles Valadez, CPA 
Natalya Yashina, CPA