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FINANCIAL REPORTING

New FASB chairman Golden describes priorities

 

By Ken Tysiac
April 23, 2013

Russell GoldenRussell Golden, who was named Tuesday to be Leslie Seidman’s successor as FASB chairman, said the board’s immediate priorities will include completing international convergence projects and ensuring that accounting standards for private companies are relevant.

Golden, 42, a FASB board member who will become chairman on July 1 after Seidman’s term ends, discussed several important issues during a conference call with reporters Tuesday. Here are some of his thoughts:

On priorities: “The initial priorities will be the completion of the four MoU [memorandum of understanding] projects [and] focusing on improving accounting for private companies. There will also be, in the second quarter of 2013, a survey that will be produced by the Financial Accounting Standards Advisory Council, or FASAC, which is an important survey to gather information about potential agenda items for the FASB. So following the results of that survey, I would want to consult with stakeholders, consult with senior staff, and consult with members of the board to develop the priorities following the completion of the MoU projects.”

On the new Private Company Council (PCC): “I believe the PCC is off and running and has been doing an absolutely fantastic job. The members of the PCC and the chairman are extremely committed to working through, with the board, improvements to private company accounting standards, and I believe that will be a great step forward to produce more relevant and more cost-efficient standards for the private company community.”

On the disclosure framework project, which aims to have financial statements reflect only relevant information and reduce clutter: “I think the disclosure framework is a very important project to both improve transparency to investors and to reduce the cost to investors as well as to preparers. I’m very pleased the project is moving along, and I hope to treat that with my fellow board members as a priority to finish in the coming months an exposure document.”

On future work with the International Accounting Standards Board (IASB): “We’ve been working quite extensively recently on the four MoU projects, which are Accounting for Financial Instruments—Classification and Measurement, Accounting for Financial Instruments—Impairment; Revenue Recognition; Leases; and Insurance.

“We are close to issuing a very important, converged solution on revenue recognition, which I have been working on for a number of years and I believe will be a good success, and will improve financial reporting for companies across the world.

“[After] the MoU projects, the primary way in which we will continue to work with the IASB is providing advice as part of the Accounting Standards Advisory Forum, working with them on the implementation efforts of both boards’ stakeholders as they work through implementing these very important, large projects, with the goal that we can educate our constituents, we can help them make the interpretation, and, most importantly, we can continue to sustain a converged conclusion.”

On the chances for a converged solution on the Accounting for Financial Instruments—Impairment project: “As you know, that project is out for proposal, and we, jointly with the IASB, plan to hold a number of field visits, a number of other workshops and tools to gain input from our stakeholders across the globe, and I’m committed to working through these issues to arrive at a converged, improved solution.”

Reaction to the appointment

Golden’s selection met with significant approval from many stakeholders in the accounting profession. Here is a sample of what they said:

AICPA President and CEO Barry Melancon: “The Institute is pleased that Russ Golden has been selected by the FAF to be the next chair of the Financial Accounting Standards Board. Russ has been a true thought leader and in his time with the FASB has demonstrated a total commitment to improving financial reporting, which ultimately serves the public interest. We congratulate Russ and look forward to working with him.”

Center for Audit Quality Executive Director Cindy Fornelli: “Russ has an ideal combination of technical knowledge and perspective on the big picture to serve investors and the public interest. We look forward to working with Russ in his new role.”

Current FASB chairman Leslie Seidman: “As a senior technical adviser and then one of the directors on the staff, he has a very good understanding of what the staff’s role is, and now as a board member he has a good understanding of what a board member needs to make an informed decision. I’ve seen Russ in action over the years. I am very confident that he has the skills that it takes to do an effective job in this role, and I will do everything I can to make the transition as smooth as possible.”

Rich Paul, chairman of the AICPA Financial Reporting Executive Committee (FinREC): “I feel Leslie was an excellent, excellent chairman, and I think Russ is going to pick up right where she left off and be a leader in the profession. I’m very happy he got the nod from the FAF.”

Financial Accounting Foundation President and CEO Terri Polley: “In his years serving on the board and earlier on the FASB staff, Russ always has put great emphasis on understanding and engaging with investors and taking their issues and concerns into account during the decision-making process. At this historic moment, all of us at the FAF look forward to working with Russ and our new GASB chair, David Vaudt, to build on the important work of their predecessors.”

Ken Tysiac (ktysiac@aicpa.org) is a JofA senior editor.

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