We spend a lot of time here talking about future trends and technologies — things like artificial intelligence, blockchain, and automation – and, more importantly, what those things mean for the future of our profession.
But there are other "hard trends" — a.k.a. future facts, a.k.a. things that we know are going to happen – that also will have a huge impact on what we do. They aren’t always as sexy as technology, but they’re equally impactful, and if we want to get serious about becoming future-ready, we need to study these things, too.
That brings us to the decidedly un-sexy world of regulation. We have to talk about this stuff because it might have as much of an impact on what we do going forward than anything technology can throw our way.
Joining me for this conversation is about the best person I can think of to talk about regulation of the accounting and finance world. He's Russ Golden, chair of the Financial Accounting Standards Board.
In this conversation, we cover:
- What regulation is making an impact in the near future.
- What the future of the FASB looks like.
- The future of the accounting and finance profession
Listen to my conversation with Russ Golden here.
Regulation in action Many of us are struggling to keep up with today's hard trends, whether they’re technological, demographic, or regulatory in nature.
The folks who regulate this profession are struggling just as hard to come to grips with all of this change and complexity.
Case in point: On July 31, the FASB issued a proposed Accounting Standards Update that was intended to help distinguish liabilities from equity, which is a pretty big deal in the corporate finance world.
When it was proposed, Golden said, “During the FASB’s agenda consultation project a few years ago, stakeholders described liabilities and equity guidance as overly complex, internally inconsistent, and the source of frequent financial statement restatements. We believe the proposed ASU would help reduce complexity and improve understandability in this area while providing financial statement users with more relevant information.”
The news release from FASB adds, “To achieve this objective, the FASB targeted its efforts to improve the guidance on both convertible instruments and the derivatives scope exception for contracts in a company’s own equity.
“The proposed ASU would reduce the number of accounting models for convertible debt instruments and convertible preferred stock. It would revise the derivatives scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The proposed ASU also would improve and amend the related disclosure and earnings-per-share guidance.”
And that’s just the latest example of the hard trend of regulation in action. This type of stuff is coming at us faster and harder than ever, and it will only continue to do so. That’s a future fact.
Get used to it.
Our challenge, of course, is wrapping our brains around all of this regulatory chaos, and then getting ahead of it somehow. Getting added to the various regulators’ e-mail lists and getting updates about what they’re up to is a good start. Commenting on their proposals, when appropriate, is another great step. And taking a “clarity break” from time to time — an hour or so once a week to quit working in your business so you can work on the business — and perhaps using that time to identify the opportunities that these changes offer you, your organization, and your clients is another great step.
This stuff’s not going away. It’s time to figure out what we’re gonna do about.
- Find out more about the FASB’s most recent initiatives at FASB.org.
- Follow Russ Golden on LinkedIn.
- Read: “FASB Proposes Improvements Related to Distinguishing Liabilities From Equity”
- Learn more at MACPA.org/future-learning.