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CPAJ News Briefs covering the latest from FASB and IASB

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TLDR

  • FASB has issued a proposal to modernize accounting for software costs, aiming to reduce complexity and costs for financial statement preparers.
  • IASB has approved a revised framework for management commentary to enhance corporate transparency, providing investors with a clearer picture of a company’s ability to create value and generate cash flows.

FASB has unanimously voted to issue a proposal aimed at modernizing accounting for software costs in targeted areas, seeking to provide more transparency in financial reporting. The proposal will clarify capitalization of certain types of software costs, aiming to reduce unnecessary complexity and costs for financial statement preparers. Companies will have the flexibility to implement the new guidance in a way that suits them best, with the proposal requiring prospective application with a retrospective option.

On the other hand, the International Accounting Standards Board (IASB) has taken a major step towards enhancing corporate transparency, unanimously approving a revised framework for management commentary that will provide investors with a clearer picture of a company’s ability to create value and generate cash flows. The revised framework will be issued in the first half of 2025. Management commentary provides an overview of a company’s financial performance and position, complementing financial statements.

The IASB is also seeking research papers to inform its efforts to improve accounting rules. Researchers are invited to submit papers on topics such as cash flows, intangible assets, and the impact of changes in the financial reporting environment by March 31, 2025.

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