Amber Pinskey and Austin Everett, leaders in GYF’s A&A Services Group, presented A&A Updates at our firm’s annual CPE Day. They reviewed a variety of new and newly applicable Accounting Standards Updates (ASUs) applicable to privately held companies, noted potential changes on the horizon, and discussed industry developments.
FASB Guidance – New/Updated ASUs
Amber kicked off the presentation focusing on new ASUs as well as some previously covered ASUs. The ASUs discussed include:
ASU 2025-07, Topic 815 – Derivatives Scope Refinement
Amber reviewed various professionals’ feedback that the previous definition of a derivative was too broad to be helpful to readers of financial statements. She noted that this update refines the scope of what constitutes a derivative and that this update doesn’t apply to many organizations. This update is effective for years beginning after December 15, 2026 for all entities.
ASU 2025-07, Topic 606 – Share-based Noncash Consideration Scope
Amber also discussed the historical feedback regarding this topic and clarified how to apply this update practically for those entities that receive noncash consideration for transferring goods or services. This update is effective for years beginning after December 15, 2026 for all entities.
ASU 2025-06, Subtopic 350-40 – Internal-Use Software
This topic has been subject to heavy discussion since June of 2022. Amber clarified that this update does not change the nature of cost entities can capitalize nor when entities cease capitalization. However, it does change when entities start capitalization. This ASU is effective for years beginning after December 15, 2027 for all entities.
ASU 2023-09, Improvements to Income Tax Disclosures
This ASU, which has been presented in prior years, will be going into effect this year for public companies. The update does not change how entities account for income taxes; it expands the disclosures. The FASB issued this update to address the feedback that global tax risk wasn’t sufficiently addressed with previous disclosure requirements.
However, Amber mentioned the current administration plans to prevent this ASU from being implemented by threatening to freeze funding for FASB. At the time of the presentation, the result of this pending action is yet to be determined.
ASU 2022-03, Topic 820 – Fair Value Measurement
Amber revisited this update, noting that entities should not factor in contractual restrictions that prohibit sales when measuring fair value of an equity security subjected to those restrictions. This update went into effect as of this year for non-public entities.
ASU 2025-05, Topic 326 – Measurement of Credit Losses
Austin noted that entities with a large volume of short-term receivables will be affected the most by this update. This ASU principally seeks to reduce the complexity and cost of evaluating allowances.
ASU 2025-04, Topic 718/606 – Share-Based Consideration Payable
The types of arrangements involving share-based consideration are commonly seen in start-ups, tech firms, bio- or life-sciences firms. This update mainly revises the terminology around what is considered to be a performance condition under the arrangement.
ASU 2025-03, Topic 805/810 – Acquirer in Acquisition of VIE
Austin remarked that the intent of this update is to improve comparability between financial statements. Prior to this update, primary beneficiary of the legal acquiree was always the accounting acquirer. However, this update looks at broader factors to determine the accounting acquirer. This ASU is effective for years beginning after December 15, 2026 for all entities.
ASU 2024-04, Subtopic 470-20 – Induced Conversion of Convertible Debt
This update removes the references in this subsection to equity and equity securities. The guidance seeks to portray the same economic substance of the inducement.
ASU 2024-01, Topic 718 – Stock Compensation
Profit interests are not defined by GAAP, but are defined by the IRS as “a partnership interest other than capital interests.” This arrangement shares in future profits but not the net assets of an entity. Austin regards this update as relevant and timely since companies continue to come up with unique ways to compensate employees. This ASU is effective for years beginning after December 15, 2024 for public entities and December 15, 2025 for all other entities.
ASU 2023-08, Subtopic 350-60 – Crypto Assets
Austin noted that there are a lot more companies holding crypto now compared to 10 years ago, and that crypto falls under intangible assets, as opposed to investments. Crypto is measured at fair value, and all gains and losses from remeasurement are included in net income. Austin reviewed the detailed nature of disclosures along with some other considerations to note such as governance, oversight, and fiscal responsibility related to crypto. This ASU is now effective for all entities.
Potential Changes
Austin noted there were no exposure drafts currently open for comment. He briefly reviewed current FASB projects, which include Accounting for Environmental Credit Programs, Accounting for Government Grants, Software Development Costs, and Classification of Certain Digital Assets as Cash Equivalents.
Industry Developments
Artificial Intelligence (AI)
Austin transitioned to the topic of AI. He contemplated the need to find a good balance between haphazardly using the term “AI” versus properly appreciating new technological developments. Next, he touched on the difficulty of predicting the actual impacts and proper use-cases of new technologies. As an example, Austin compared simple automation as having a clear use-case whereas agentic AI doesn’t have as much clarity at this moment. He emphasized that data protection should be prioritized.
CPA Licensing Updates
Amber wrapped up the presentation by reviewing the CPA license updates. Pennsylvania has created additional pathways for professionals to become a CPA. Although passing the CPA exam is still a prerequisite, there are now 3 methods to acquiring a license.
- 150 college credits and one year of work experience
- Master’s Degree and one year of work experience
- Bachelor’s Degree and two years of work experience
Other changes made to reduce barriers include the elimination of the requirement for reference letters from a CPA, increasing the CPA testing to 30 months, and recognizing “automatic mobility” allowing CPAs to practice across state lines. See related post for more details.
Click here to access copies of the slides, links to resources and a video of the presentation
About GYF’s CPE Day: The firm presents this program each year to bring together clients, friends of the firm, and other professionals who are interested in gaining knowledge. The day is always filled with interesting presentations and great networking opportunities, and is generally attended by 300+ guests. If you have any questions about the material covered, or other issues we did not have time to address, please reach out to your GYF Executive or contact the office at 412-338-9300. We look forward to seeing everyone next year!
