Meeting Recap

June 8, 2018

The Financial Accounting Standards Advisory Council (FASAC) held its regular quarterly meeting on Friday, June 8, 2018. The following topics were discussed:

• Financial Performance Reporting—Disaggregation of Performance Information: FASAC members discussed the FASB's financial performance reporting project. Some Council members questioned the project's starting point—the disaggregation of cost of revenue lines and selling, general, and administrative expense lines—and suggested that the disaggregation of nonrecurring items may provide more useful information. Other Council members, particularly investors and other users, indicated support for the project and its starting point. Those members explained that they would like to gain a better understanding about a company's key performance drivers and emphasized that they are looking for more granularity of performance information. Council members also discussed potential interaction with the segment reporting project, as well as potential approaches on which to base disaggregation. 
• Subsequent Accounting for Goodwill and Possible Decision-Making Factors: FASAC members discussed various factors that stakeholders have suggested that the FASB use in making its decisions about improvements to GAAP, focusing on a test case using the Board's research project on the subsequent accounting for goodwill. Council members expressed mixed views on how to account for goodwill.  Some Council members preferred no changes to the subsequent accounting for goodwill, others supported an immediate write-off of goodwill, and others suggested that goodwill be amortized based on the expected life of the underlying assets acquired. More broadly on the various factors, Council members suggested that the Board's central focus should be on relevance to financial statement users, consistency with the conceptual framework, consideration of academic research, ways to promote simplification or reduce complexity, and reducing costs and maintaining or increasing benefits.