Article
The next big change in accounting? FASB to vote on intangibles and KPI
Sept. 29, 2025
The Financial Accounting Standards Board (FASB) convened on Sept. 24, 2025, to confront critical accounting challenges: the elusive valuation of intangible assets and the often-conflicting nature of financial key performance indicators (KPIs).
The board will weigh extensive public feedback, aiming to deliver greater transparency and consistency for investors, according to a FASB alert on Sept. 18. The FASB specifically targets insights from two recent Invitation to Comment (ITC) documents. ITC No. 2024-ITC200, Recognition of Intangibles, generated 44 responses, underscoring the urgent need to standardize how companies account for their most valuable, yet often unrecorded, assets. Similarly, ITC No. 2024-ITC100, Financial Key Performance Indicators for Business Entities, drew 37 responses, reflecting widespread frustration over inconsistent non-GAAP reporting.
Intangible assets-ranging from brand recognition to proprietary software-increasingly drive corporate value. However, current accounting standards fall short, hindering accurate valuation and comparability. The FASB's review has spanned a broad spectrum of intangibles, including those tied to research, development, software costs, and specialized industry assets in sectors like film, airlines, and media. The board has also been studying how different acquisition methods (internally developed, acquired in a business combination, or asset purchase) should influence accounting treatment. Crucially, they seek to identify the intangible information most vital to investors for informed analysis and capital allocation.
In relation to KPIs, investors have long struggled with the lack of uniformity in non-GAAP financial measures. Unlike strict Generally Accepted Accounting Principles (GAAP), companies often define and report non-GAAP metrics differently, creating a confusing landscape for performance comparisons. The FASB is seeking whether and how to standardize these non-GAAP metrics, promising more consistent and comparable data to empower better investor decisions.
Private company reporting also on the agenda
Following the main FASB meeting next week several important engagements focusing on private company accounting issues will also take place, according to the FASB alert.
On Sept. 25, the FASB's Private Company Council (PCC) and the AICPA Private Companies Practice Section Technical Issues Committee (TIC) will join the FASB from 3:10 to 3:40 p.m. They plan to discuss:
- Leases
- Interest Method and Determining the Effective Interest Rate
- Debt Modifications and Extinguishments
- Subjective Acceleration Clauses
- Embedded Derivatives
On Sept. 26, the PCC will continue its engagement with a morning session alongside the FASB. Topics include:
- PCC Town Hall and Liaison Meeting Update
- PCC Agenda Priorities
- PCC Research Projects: Subjective Acceleration Clauses and the Interest Method
- Accounting for Debt Exchanges
- PCC Research Projects: Leases and the FASB Leases Post-Implementation Review
- FASB Agenda Consultation
- FASB Research Projects: Financial Key Performance Indicators and Accounting for Intangibles
Later on, Sept. 26, FASB members will meet with the AICPA Private Companies Practice Section Technical Issues Committee. Their agenda covers:
- FASB Agenda Consultation
- Clarifying Guidance for Newly Formed Entities That Are Not Joint Ventures
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