Proposed FSP on Prior-Year Misstatements
March 21, 2007
A FASB Staff Position (FSP) proposal would extend guidance issued by an SEC Staff Accounting Bulletin (SAB) to non-registrants, meaning not-for-profits and other nongovernmental entities.
In September 2006, the SEC staff issued SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements," to clarify FASB Statement 154, "Accounting Changes and Error Corrections." SFAS 154 guidance addresses error corrections and restatement requirements when the reporting misstatement is material but does not address the evaluation of materiality. Because SAB 108 quantifies a misstatement as a basis for evaluating the materiality of the misstatement in current year's financial statements, its intention is to conform the reporting of error corrections by all registrants.
The proposed FSP seeks to conform the reporting of error corrections between SEC registrants and other entities. The FSP applies to nongovernmental entities that are not currently subject to the requirements of SAB 108. Consequently, entities subject to the FSP include privately held companies and not-for-profit organizations, such as independent higher education institutions.
The FSP proposal deals with evaluating the materiality of a misstatement by defining and illustrating approaches for quantifying the effect of the misstatement on an organization's current-year financial statements. The FSP would be effective for financial statements issued for fiscal years ending after June 15, 2007, or the current fiscal year for most institutions. The comment deadline for the proposed FSP is April 30, 2007. NACUBO encourages members to comment directly to FASB or to share thoughts with NACUBO by contacting Sue Menditto. The proposed FSP is available from FASB.
- Federal Court Postpones Effective Date of Overtime Rule
- 1098-T Box 1 Reporting Will Not be Required Until 2018 Tax Year
- EPA Issues Hazardous Waste Generator Improvements Rule
- 2017 Intermediate Accounting and Reporting - Winter
January 23-24, 2017
- 2017 Endowment and Debt Management Forum
February 1-3, 2017
- ON-DEMAND: The CBO's Role in Diversity and Inclusion on Campus
- ON-DEMAND: The Clery Act: Strategic Planning to Mitigate Institutional Risk
- ON-DEMAND: Title IX: Key Issues Surrounding Institutional Compliance
- ON-DEMAND: NACUBO Live! Higher Education Accounting Forum
- ON-DEMAND: Responsibility Center Management: Two Different Perspectives