Question

Thank you for your post! As you are probably aware, the FASB has issued a new revenue and lease standard which could have major changes for organizations. Do you think the new revenue standard will improve financial reporting since it does move us closer to international standards?

Answer 1

Yes, the new revenue standards will certainly improve financial reporting since it does move us closer to international standards.

For instance the new revenue standards issued by FASB require several new disclosures and these disclosures will help to provide investors with information with regards to nature, amount, timing and uncertainty of revenue. These disclosures will lead to improved and enhanced level of transparency for the investors and other users of financial statements.

The same is the case with the new lease standards that FASB has issued. As per the new standards lessees will now recognize an asset and liability for nearly all of their leases. This augurs well for the domain of financial reporting and will create a win situation for investors as well as all other users of financial statements as most leases will now be there on balance sheet and this will be augmented by enhanced disclosures of lease arrangements.