The Financial Accounting Standards Advisory Council (FASAC) had its quarterly meeting, focusing on Financial KPIs, FASB’s interpretive process, and post-implementation reviews. Key discussions revolved around standardizing KPIs like EBITDA and FCF.
Key Points
•📅 Meeting Date: December 5, 2024
•📊 Hot Topic: Financial KPIs for business entities
•🔍 Focus: Standardizing definitions for KPIs like EBITDA and FCF
•📢 Stakeholder Feedback: Mixed views on KPI standardization
•📈 Next Steps: Review outcomes of recent standards like ASU No. 2024-03
📝 Meeting Highlights
The FASAC's quarterly meeting on December 5, 2024, was a packed agenda with key updates from the FASB chair and comments from the SEC, PCAOB, and AICPA. Discussions centered around Financial KPIs, the FASB’s interpretive process, and post-implementation reviews. Council members were particularly vocal about the need for consistent KPI reporting.
📊 Financial KPIs: A Hot Topic
Council members emphasized the increasing relevance of Financial KPIs, suggesting that standardizing definitions, especially for EBITDA and FCF, should be a priority. Investors are pushing for greater consistency and transparency in KPI calculations and adjustments. However, achieving a common definition across various industries poses significant challenges.
🔍 Mixed Views on KPI Standardization
Opinions varied on how the Board should tackle KPI standardization. Some members suggested a narrow project focusing on the most frequently reported KPIs, while others advocated for optional disclosures by management. Investors leaned towards mandatory disclosures to enhance transparency in financial statements.
📑 Post-Implementation Reviews
The meeting also covered the FASB’s Post-Implementation Review (PIR) process. Discussions involved the recently completed revenue PIR report and ongoing projects on leases and current expected credit losses. Council members are keen to see how recent standards like ASU No. 2024-03 will impact Financial KPI reporting.
