From the Chairman's Desk:
By Russell G. Golden, FASB Chairman
The Value of Holding Public Roundtables
Thoughtful, reasoned, and timely stakeholder feedback is a critical component of the FASB’s standard-setting process. It is of the utmost importance that Board members and staff are well-informed of stakeholders’ concerns throughout all phases of a project.
Therefore, our standard-setting process is designed to be open and orderly to encourage broad participation. That broad participation takes many forms:
In this column, I wanted to discuss one tool that has been an important mechanism in our process: public roundtable meetings.
Roundtables are public meetings between the FASB and its stakeholders such as users of financial information, preparers, auditors, and academics. The purpose of roundtables is to help the Board further explore stakeholders’ unique perspectives on proposed accounting guidance or other invitations to comment.
A typical roundtable lasts between 1.5 to 3 hours and hosts 10 to 15 participants, plus FASB participants. This ensures an active dialogue and ample opportunity for all participants to contribute. When there is a lot of stakeholder demand to participate, we may conduct more than one. FASB staff moderate the roundtables with an agenda that outlines the key issues and questions. This enables Board members to focus squarely on the substance of the discussions. After a roundtable concludes, the FASB staff prepares a summary for the Board to review and discuss during deliberations.
The stakeholder input we received at recent roundtables has helped us develop some of the most important financial accounting and reporting standards in the FASB’s history.The Board has found great value in holding roundtables in recent years. The stakeholder input we received at recent roundtables has helped us develop some of the most important financial accounting and reporting standards in the FASB’s history.
Roundtables provide an opportunity for stakeholders to speak directly to Board members—and for those Board members to ask direct questions. We often find that these dialogues complement what may have been written in comment letters, while providing stakeholders with a forum to further explain and elaborate on their point of view—something that may have been difficult to do in written form.
The Board finds these meetings valuable because they are an opportunity to engage in a comprehensive discussion of stakeholders’ points of view and for those with different views to better understand and potentially challenge each other’s views. Additionally, when views of stakeholder groups sharply differ, this format can be an effective way to probe and weigh those differing perspectives. It also allows participants to interact with one another.
When Do We Hold Roundtables?
The decision on when to hold roundtables and with whom is dependent on the type and phase of standard-setting project. Typically, we hold public roundtable discussions after issuing an Invitation to Comment, Discussion Paper, or a major proposed Accounting Standards Update.
Not every project includes a roundtable, though. When a project is addressing narrow, implementation, application, or technical correction issues—a roundtable often is unnecessary, as there are other, more efficient means of communicating stakeholder feedback to the Board.
If a proposal calls for a major improvement within a particular industry or across industries, a roundtable may be appropriate.Conversely, if a proposal calls for a major improvement within a particular industry or across industries, a roundtable may be appropriate. For example, the Board held a roundtable in February 2016 to hear views directly from smaller financial institutions on the Credit Losses standard. The roundtable provided us with an opportunity to have a direct dialogue with this specific stakeholder group to better understand their concerns. The roundtable helped the Board address their feedback in drafting the final standard.
Another example is the multiple roundtables we held in 2015 as we developed our not-for-profit financial presentation standard. The roundtables broadened our awareness of the differences between the various industries within the not-for-profit sector. Due in large part to the feedback we received from stakeholders during the roundtables, the Board decided to separate the project into two phases.
In larger projects that affect many industries, we find it beneficial to hear directly from stakeholders in a public roundtable format.In larger projects that affect many industries, we find it beneficial to hear directly from stakeholders in a public roundtable format to:
- Better understand their points of view on a proposal, or
- Discuss what the Board is thinking in its deliberations of a specific project.
On December 2, at our offices in Norwalk, CT, we will be holding two roundtables, to solicit feedback on our proposal on hedge accounting.
Additionally, on December 16 at our offices in Norwalk, we will be holding a roundtable for our Invitation to Comment on Agenda Consultation—which we issued to solicit feedback about potential topics that the FASB should consider adding to our agenda.
While the deadlines to participate in the roundtables have passed, anyone who is interested in observing can register in advance. Those who are interested, but are not in the area, can listen to the roundtables on our website.
We encourage you to join our future roundtables—whether as participants or observers.
You also should be on the lookout for roundtables in early 2017. For our proposal to improve financial reporting for insurance companies that issue long-duration contracts, we plan to hold public roundtable meetings in the first quarter of 2017. We also anticipate holding roundtables for our Disclosure Framework project in the first half of 2017.
As always, we are committed to listening to our stakeholders’ concerns on our projects. We encourage you to join our future roundtables—whether as participants or observers. By lending your voice to our activities, you can provide meaningful feedback on projects that affect you and help improve our standards.