Congress Pressures the FASB on R&D AccountingBy
At least one member of Congress is pressuring the Financial Accounting Standards Board (FASB) to finally change the standard on intangible assets so that research and development costs can’t be expensed. Rep. Brad Sherman (D.-Calif.) says the policy “wipes out” an $11 billion tax incentive Congress provided to industry in 2015.
“That incentive was virtually wiped out by [an] unheralded decision made by FASB 30 years ago,” Sherman charges. FASB Chairman Russell Golden says the FASB is considering adding treatment of R&D expenses to its agenda. That decision won’t be made until at least early 2017. But Sherman isn’t placated. Sherman says various FASB chairmen have been making similar promises for years. He threatens to lead an effort in Congress to rescind the FASB’s exemption from the Freedom of Information Act, open meeting laws, Senate confirmation of Board nominees, and cost/benefit regulations if the treatment of R&D costs isn’t changed.