The history, current status, and adoption implications of a Financial Coursework

The history, current status, and adoption implications of a Financial Accounting Standards Board ongoing project - Coursework Example Some of the key provisions of the ongoing FASB project include a requirement for entities to prepare their financial statements using liquidation basis of accounting when a liquidation plan has been approved with relevant authorities as well as when a liquidation plan has been imposed by other forces and there is less likelihood that the entity will successfully return from liquidation (North and Wagenen, 2013). On the other hand, the ongoing project seeks to change the financial statement form for entities using the liquidation basis of accounting into a statement of changes in the liquidation net assets. Lastly, the project also require full disclosure of an entity’s liquidation plan, assumptions used in measuring the assets and liabilities, the intended methods, amount of income and costs accrued as well as the expected duration of the liquidation process. This paper describes the FASB’s liquidation basis of accounting project, its history as well as the current stat us of the project. History and background of the Project The history of the current liquidation basis of accounting project began in 1984 when the Financial Accounting Standards Board released Financial Report Survey by AICPA and illustration of Accounting for Enterprises in Unusual Circumstances and Reporting. In fact, this involved a survey conducted on enterprises, which were reorganized or liquidating. The survey focused on offering a brief review of literatures concerning liquidating and reorganized enterprises. Later in 2007, a there was establishment of a project to this agenda by FASB, aimed at dealing with issues regarding liquidation basis of accounting (AIRA, 2012). Additionally, the project was becoming immediate due to the ongoing concern and the effort by FASB to incorporate AICPA’s Codification of Statements on Auditing Standards AU Section 341. In 2008, FASB offers a draft to establish considerations going concern, and later in 2009, adoption of Accounting Sta ndards Codification contributed through authoritative guidance on ways to deal with constitutes liquidation basis accounting (AIRA, 2012). In July 2012, FASB issued a draft of their proposed accounting standards update titled the Liquidation Basis of Accounting to the Accounting Standards Codification (ASC). Prior to the adoption of the project, ASC, the GAAP used to provide very little guidance regarding what is constituting liquidation basis of accounting as well as how the basis of accounting should be applied to any given entity. The added project to FASB agenda was primarily designed to address both the liquidation basis accounting and going concern issues. Current Status Currently, FASB is making preparations in the project to establish ways of communicating effectively to stakeholders on issues regarding standards-setting activities. They are also making necessary project plans by listing the agendas of the project, thereby making estimates of publication dates by the end of 2013 (North and Wagenen, 2013). FASB is making deterring comments to be made of anticipated period of closure in the next four quarters. They are also holding roundtable meeting and making plans to hold other public forums. Moreover, they are setting standards based on establishment of due process on the procedures, which entail extensive consultation. The project plan is focused on facilitating change due to consultation or other reasons.