Financial Accounting Standards Board Chairman Richard Jones had to deal with the coronavirus pandemic just as he was starting the transition with immediate past chair Russell Golden, and now he is facing the uncertainty of the presidential election and what Congress might do with accounting standards.

“I actually got to join in March and I spent a whole week in the office before I had to work remote as part of the transition,” Jones said Wednesday during Financial Executives International’s Corporate Financial Reporting Insights Virtual Conference. “Changing the workforce from an in-place to a remote workforce was probably one of the first things we worked on.”

Lately he has been working closely with FASB technical director Hillary Salo, who also joined the board recently, on the adjustment. “I think the FASB and the staff and the foundation here did a great job of transitioning to remote,” he said.

Having officially taken the helm in July, he and Salo plan to do more outreach to various stakeholders, even though they need to work remotely now. “The other challenge is building a relationship with stakeholders,” said Jones. “Obviously this medium is great in that you can reach out to a broad array of people without jumping on an airplane. I can have five meetings a day. In fact, it’s rare that a day goes by that I’m not involved in some form of stakeholder outreach. That being said, there’s a lot of relationships and a lot of information you get informally. That’s a little tougher in this environment because everything is so scheduled. That’s probably a challenge. The amount of outreach we’re able to do is just as extensive, if not more, but I do think there are some benefits to actually seeing someone in person.”

Salo is also doing more outreach to FASB’s stakeholders. “From a priority perspective, we’re really focused on continually improving our communications and our outreach efforts with stakeholders,” she said at the FEI conference. “That includes investors, preparers, practitioners and regulators. And the quality of our output is really directly affected by the input that we receive from all of you. I’m really focused on whether we as the staff are asking for and listening to your feedback, both positive and negative, and sharing that with the board so they can be best positioned to be able to determine whether and how to address concerns as effectively and efficiently as possible, especially in the current environment.”

FASB is also taking another look at its agenda to make sure it adjusts to the pandemic. “One of my biggest priorities is making sure that we are focused on supporting our stakeholders, whether it’s reprioritizing our agenda this spring to focus on questions and answers and technical inquiries and educational materials,” said Salo. “I think it’s also being really thoughtful about the challenges you guys have on your plate, whether it’s evaluating deferrals of certain pieces of guidance or looking at the length of comment periods. I think we’re really just going to focus on what we can do to help support you during this time and to make sure that we’re helping to support high-quality adoption of our standards. Those are my main priorities as I come into the role.”

Among the stakeholders demanding attention is Congress, where some lawmakers have sought to weaken the credit losses standard, also known as CECL for the current expected credit losses model it uses. Last month, the American Accounting Association issued an unusual resolution criticizing Congress for interfering with accounting standards after they made changes in the credit losses standard among the provisions in the CARES Act that was passed in March in response to the economic fallout from the coronavirus (see story).

FASB will be dealing with a new Congress next year and perhaps a new administration in the White House, but with the outcome of Tuesday’s election still hanging in the balance Wednesday, Jones was asked during a press conference for his reaction to the AAA’s resolution and what he thought of preserving FASB’s independence as a standard-setter.

“Obviously we’re an independent standard-setter,” he responded. “That being said, I think that’s an asset, and I think it’s also a privilege. An asset in the sense that I do think that independent accounting standard-setting is an asset to our capital markets, and I think it’s a privilege because I think it’s something we continue to earn. While obviously I would prefer that we make any changes to accounting standards, I certainly understand that we’re in a very unusual environment and, to the extent that our government felt the need to take action, I respect our government in that need. So as far as one administration versus another, it doesn’t cause us to deviate from our mission of providing that objective, decision-useful, unbiased information to users of financial statements.”

Another major priority for both Jones and Salo is conducting post-implementation reviews of some of the recent accounting standards like revenue recognition, leases and CECL.

“Every quarter I update our board members on our post-implementation reviews,” Jones told the financial executives in attendance at the virtual conference. “I share with them what we are doing and share with them the results. That will happen throughout the process, including the publication of our reports. So they will be challenging us throughout the process, just as our stakeholders will be challenging us throughout the process. For me, one of the biggest benefits of this shift is that we can telegraph to our stakeholders where we are in the process and what we’re hearing. To the extent that you folks are experiencing something different, we want to hear from you.”

He wants to reduce unnecessary complexity in accounting standards, which could lead to noncompliance. “If you have a complex transaction, often the accounting is complex,” said Jones during the press conference. “It’s where there is complexity in the accounting that’s not providing relevant information to a user. One of the examples might be the recent [accounting standards update] we had on liabilities and equity where we dealt with convertible debt. Interestingly enough, what we heard from users is they actually didn’t benefit from that information that was provided by our pre-existing standards, and to provide that information resulted in some complex models. So at the end of the day, the information the users wanted actually drove to a less complex model. There’s always going to be some complexity, but obviously the more complex something is, the more apt something is not to be complied with or for issues to arise. I think that’s why it’s so important to focus on whether we have areas of unnecessary complexity that take away the value of information to users.”

Accountants are facing more complexity as they try to make forecasts and adjust their forecasts in the midst of the pandemic.

“What we’ve heard from our clients, which has been relatively consistent since the start of the pandemic is related to the challenges of forecasting,” said Chris Cryderman, a partner in Deloitte & Touche’s Accounting and Reporting Services Group, who also spoke at the FEI conference. “Of course, forecasting is critical not only for a company’s operations and liquidity needs, but also because forecasting is essential to a number of key accounting judgments. Looking across the economic landscape, we observed two different market stories. One, companies that are being challenged to get back to the pre-outbreak operations, and those that are benefiting from the outbreak. Another area that has been top of mind has been disclosure and communication with stakeholders. That includes both required financial statement disclosures, but also communications to discuss the impact of COVID-19 on the company’s business. … When it comes to disclosure and communication, the common theme is about the importance of transparency, and in the current environment the need for transparent communication is magnified.”

Financial Accounting Standards Board Chairman Richard Jones had to deal with the coronavirus pandemic just as he was starting the transition with immediate past chair Russell Golden, and now he is facing the uncertainty of the presidential election and what Congress might do with accounting standards.

“I actually got to join in March and I spent a whole week in the office before I had to work remote as part of the transition,” Jones said Wednesday during Financial Executives International’s Corporate Financial Reporting Insights Virtual Conference. “Changing the workforce from an in-place to a remote workforce was probably one of the first things we worked on.”

Lately he has been working closely with FASB technical director Hillary Salo, who also joined the board recently, on the adjustment. “I think the FASB and the staff and the foundation here did a great job of transitioning to remote,” he said.

Having officially taken the helm in July, he and Salo plan to do more outreach to various stakeholders, even though they need to work remotely now. “The other challenge is building a relationship with stakeholders,” said Jones. “Obviously this medium is great in that you can reach out to a broad array of people without jumping on an airplane. I can have five meetings a day. In fact, it’s rare that a day goes by that I’m not involved in some form of stakeholder outreach. That being said, there’s a lot of relationships and a lot of information you get informally. That’s a little tougher in this environment because everything is so scheduled. That’s probably a challenge. The amount of outreach we’re able to do is just as extensive, if not more, but I do think there are some benefits to actually seeing someone in person.”

Salo is also doing more outreach to FASB’s stakeholders. “From a priority perspective, we’re really focused on continually improving our communications and our outreach efforts with stakeholders,” she said at the FEI conference. “That includes investors, preparers, practitioners and regulators. And the quality of our output is really directly affected by the input that we receive from all of you. I’m really focused on whether we as the staff are asking for and listening to your feedback, both positive and negative, and sharing that with the board so they can be best positioned to be able to determine whether and how to address concerns as effectively and efficiently as possible, especially in the current environment.”

FASB is also taking another look at its agenda to make sure it adjusts to the pandemic. “One of my biggest priorities is making sure that we are focused on supporting our stakeholders, whether it’s reprioritizing our agenda this spring to focus on questions and answers and technical inquiries and educational materials,” said Salo. “I think it’s also being really thoughtful about the challenges you guys have on your plate, whether it’s evaluating deferrals of certain pieces of guidance or looking at the length of comment periods. I think we’re really just going to focus on what we can do to help support you during this time and to make sure that we’re helping to support high-quality adoption of our standards. Those are my main priorities as I come into the role.”

Among the stakeholders demanding attention is Congress, where some lawmakers have sought to weaken the credit losses standard, also known as CECL for the current expected credit losses model it uses. Last month, the American Accounting Association issued an unusual resolution criticizing Congress for interfering with accounting standards after they made changes in the credit losses standard among the provisions in the CARES Act that was passed in March in response to the economic fallout from the coronavirus (see story).

FASB will be dealing with a new Congress next year and perhaps a new administration in the White House, but with the outcome of Tuesday’s election still hanging in the balance Wednesday, Jones was asked during a press conference for his reaction to the AAA’s resolution and what he thought of preserving FASB’s independence as a standard-setter.

“Obviously we’re an independent standard-setter,” he responded. “That being said, I think that’s an asset, and I think it’s also a privilege. An asset in the sense that I do think that independent accounting standard-setting is an asset to our capital markets, and I think it’s a privilege because I think it’s something we continue to earn. While obviously I would prefer that we make any changes to accounting standards, I certainly understand that we’re in a very unusual environment and, to the extent that our government felt the need to take action, I respect our government in that need. So as far as one administration versus another, it doesn’t cause us to deviate from our mission of providing that objective, decision-useful, unbiased information to users of financial statements.”

Another major priority for both Jones and Salo is conducting post-implementation reviews of some of the recent accounting standards like revenue recognition, leases and CECL.

“Every quarter I update our board members on our post-implementation reviews,” Jones told the financial executives in attendance at the virtual conference. “I share with them what we are doing and share with them the results. That will happen throughout the process, including the publication of our reports. So they will be challenging us throughout the process, just as our stakeholders will be challenging us throughout the process. For me, one of the biggest benefits of this shift is that we can telegraph to our stakeholders where we are in the process and what we’re hearing. To the extent that you folks are experiencing something different, we want to hear from you.”

He wants to reduce unnecessary complexity in accounting standards, which could lead to noncompliance. “If you have a complex transaction, often the accounting is complex,” said Jones during the press conference. “It’s where there is complexity in the accounting that’s not providing relevant information to a user. One of the examples might be the recent [accounting standards update] we had on liabilities and equity where we dealt with convertible debt. Interestingly enough, what we heard from users is they actually didn’t benefit from that information that was provided by our pre-existing standards, and to provide that information resulted in some complex models. So at the end of the day, the information the users wanted actually drove to a less complex model. There’s always going to be some complexity, but obviously the more complex something is, the more apt something is not to be complied with or for issues to arise. I think that’s why it’s so important to focus on whether we have areas of unnecessary complexity that take away the value of information to users.”

Accountants are facing more complexity as they try to make forecasts and adjust their forecasts in the midst of the pandemic.

“What we’ve heard from our clients, which has been relatively consistent since the start of the pandemic is related to the challenges of forecasting,” said Chris Cryderman, a partner in Deloitte & Touche’s Accounting and Reporting Services Group, who also spoke at the FEI conference. “Of course, forecasting is critical not only for a company’s operations and liquidity needs, but also because forecasting is essential to a number of key accounting judgments. Looking across the economic landscape, we observed two different market stories. One, companies that are being challenged to get back to the pre-outbreak operations, and those that are benefiting from the outbreak. Another area that has been top of mind has been disclosure and communication with stakeholders. That includes both required financial statement disclosures, but also communications to discuss the impact of COVID-19 on the company’s business. … When it comes to disclosure and communication, the common theme is about the importance of transparency, and in the current environment the need for transparent communication is magnified.”