Segment
reporting. The Board discussed feedback received on the 2018 segment
aggregation study. That study considered alternatives to improve the aggregation
criteria and the reportable segments process.
The Board acknowledged the
challenges identified by participants in the study. Specifically, the Board was
concerned that the alternatives could increase the frequency of restatements of
segment information in prior reporting periods. The Board also was concerned
about the incentive for entities to use the flexibility within the management
approach to work around the alternatives. Overall, the Board was not persuaded
that the alternatives provided cost-beneficial solutions.
Next
Steps The Board directed the staff to focus next on the
segment disclosure requirements in order to facilitate a second segment
reporting study. As part of that effort, the staff will analyze options to
improve how the management approach applies to the segment disclosure
requirements, specifically, the meaning of "regularly reviewed" information. The
staff plans to bring that analysis to the Board at a later date.
The
Board plans to make technical decisions upon the conclusion of both
studies.
Financial
performance reporting—disaggregation of performance information. The
Board discussed feedback received during outreach with preparers on their system
capabilities to disaggregate income statement line items.
Additionally,
the Board discussed potential paths forward given the challenges identified by
preparers in providing additional disaggregation.
Next
Steps The Board directed the staff to consider various ways
of disaggregating expense information based on how it is viewed internally by
management. This research will include outreach with preparers and users to
understand the operability and usefulness of those alternatives as well as
consideration of the location of that information within the financial
statements.
The Board discussed whether to combine the Financial
Performance Reporting project with the Segment Reporting project. The Board
acknowledged the relationship between the two and that the findings in one
project could be useful to the other. However, the Board concluded that the two
projects should remain separate.
Updating
the definition of collections. The Board discussed the staff's research on
direct care and completed redeliberations of the proposed Accounting Standards
Update,
Not-for-Profit Entities (Topic 958): Updating the Definition of
Collections. The Board made the following decisions.
Direct Care of Collections
The Board affirmed its decision to update the Codification Master
Glossary definition of collections to include the concept of direct
care. The Board discussed describing direct care in the amendments to the
Codification but decided not to include such a description.
Disclosures
The Board decided to require that a collection-holding entity disclose
its policies for the use of proceeds from deaccessioned (removed) collection
items. The Board also decided that if a collection-holding entity allows
proceeds from deaccessioned collection items to be used for direct care, the
entity will be required to disclose what the entity considers direct
care.
Transition
The Board decided to require prospective transition.
Effective Date
The Board decided that the amendments in the final Update would be
effective for all entities for annual periods beginning after December 15, 2019,
and for interim periods within annual periods beginning after December 15,
2020.
Analysis of Costs and Benefits
The Board concluded that it has received sufficient information and
analysis to make an informed decision that the expected benefits of the
amendments would justify the expected costs.
Next Steps
The Board directed the staff to draft a final Accounting Standards
Update for vote by written ballot.
Financial
instruments—credit losses implementation.
The
Board decided to extend the comment letter period an additional 30 days for the
proposed Accounting Standards Update,
Codification Improvements—Financial
Instruments. Comment letters for the proposed Update will be due on January
18, 2019.
Other Items The Board decided to:
- Conduct further research and analysis before issuing the proposed
Accounting Standards Update, Codification Improvements to Financial
Instruments—Credit Losses (Topic 326): Vintage Disclosure: Gross Writeoffs and
Gross Recoveries, which would require that total gross writeoffs and
total gross recoveries be presented by class of financing receivable and major
security type within the credit quality information vintage disclosure
described in paragraphs 326-20-50-5 through 50-6.
- Hold a public roundtable in January 2019 to discuss the topic in (1) above
and a proposal submitted by a group of banks to consider an alternative
approach to presenting expected credit losses on the income statement.
The Board expressed support for the staff's efforts to create a
question-and-answer document that will address particular issues on the weighted
average remaining maturity (WARM) method for estimating credit loss reserves
under Topic 326, Financial Instruments—Credit Losses.