Accounting rules are complex. It is known. The Financial Accounting Standards Board, in an effort to serve its stakeholders, has made it a priority to make them a little less awful. This is no small feat and Russ Golden, FASB Chairman, is looking for tap-ins:
“Complexity in accounting can be costly to both investors and companies,” FASB Chairman Russ Golden said. The simplification initiative, which FASB began in June, “is focused on identifying areas that we can address quickly and effectively, without compromising the quality of information provided to investors.”
Back in June, we learned that the FASB would tackle inventory management and eliminate extraordinary items first. And today, Michael Rapoport reports that the Board would like to simplify "how companies report their debt and when they record taxes on certain transactions."
All noble goals, to be sure. However, let us not forget that we're talking about writing accounting rules, a process so rife with dysfunction that "memos of understanding" from 12 years ago remain unresolved and/or wallowing in failure and some people remain in COMPLETE DENIAL over it.
Regardless, interested parties appreciate the enthusiasm on the part of the FASB to make the accounting world a better place. However, they admit that the whole project could drag on much like any other task the FASB takes on:
“The auditing profession welcomes initiative and efforts to provide further clarity to financial statements,” said Cindy Fornelli, executive director of the Center for Audit Quality, an industry group. But the details and execution of FASB’s projects “will be critical,” she added.
Low expectations are the best. Don't waste the opportunity to meet them, guys.
FASB Looks to Uncomplicate Accounting–A Little, At Least [Money Beat/WSJ]