Committee Meets with AICPA Accounting Standards Representatives

By John J. O'Leary, CPA

The Financial Accounting Standards Committee is the NYSSCPA's senior technical accounting committee. Under the oversight of the General Committee on Accounting and Auditing, it reviews exposure drafts on matters related to its respective areas of expertise, develops proposed positions for submission to the Society's board of directors, tracks emerging practice problems to bring to the attention of the board, and initiates and maintains liaisons with industry, government, and other related organizations that affect committee activities.

The committee recently met with Joseph Graziano, a member of the AICPA's Accounting Standards Executive Committee (AcSEC), AICPA Accounting Standards Director Elizabeth A. Fender, and technical managers Daniel Noll and Frederick Gill. The purpose of the meeting was to establish a liaison and dialogue between the committee and AICPA's accounting standards representatives.

Fender made a brief presentation regarding the activities of the AICPA's due process procedures for accounting standards. Noll then discussed Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use and SOP 98-5, Reporting on the Costs of Start-up Activities. He outlined the background, final resolutions, and bases of conclusions applicable to each document, and also responded to numerous questions from committee members.

Among the issues discussed were why SOP 98-5 included organization costs since such costs are generally immaterial, the appropriate accounting for the costs of establishing and maintaining a website, and how SOP 98-1 impacts the accounting for and financial reporting of expenses incurred to become Year 2000 compliant.

Gill then discussed the exposure draft of the proposed SOP amending SOP 97-2, Software Revenue Recognition. A lively discussion focused on such issues as the software industry's assistance in identifying practice problems related to implementation of SOP 97-2, the reasons for amending SOP 97-2, and AcSEC members' differing views on the proposed amendments.

All participants said they found the meeting productive and hoped it will be conducted annually. In January, the Financial Accounting Standards Committee plans to organize a similar meeting with Timothy S. Lucas, FASB's director of research and technical activities, with whom the committee met last April.

In addition to maintaining relations with and responding to pertinent exposure drafts issued by such standards-setting groups as FASB, AcSEC, and the International Accounting Standards Committee, the Financial Accounting Standards Committee's scope includes preparing and conducting evening technical sessions for FAE, responding to related financial accounting standards inquiries of NYSSCPA members as part of the Society's technical services hotline, and preparing and reviewing articles for The CPA Journal and other publications.

For more information about the Financial Accounting Standards Committee's activities, contact Chair John J. O'Leary at (212) 599-0100 or joleary@gt.com. *