Accounting Standards & Updates: 2024 Year in Review
March 10, 2025
Let’s dive into updates from the Financial Accounting Standards Board, Governmental Accounting Standards Board and The American Institute of Certified Public Accountants as we review 2024.
Financial Accounting Standards Board (FASB) Updates
The FASB issued just four Accounting Standards Updates (ASUs) in 2024 – a sharp decrease from their typical output of over 20 updates per year. This lighter issuance gives entities a breather after implementing significant standards such as leases (Topic 842), CECL (Topic 326) and revenue recognition (Topic 606). Here is a closer look at the 2024 ASUs:
1. ASU 2024-01: Scope Application of Profits Interest and Similar Awards
Issued in March, this update clarifies how to apply existing standards (Topics 710 and 718) to profits interest awards. It reduces diversity in practice and includes illustrative examples to guide entities in determining the correct accounting treatment. While the update doesn’t introduce new guidance, its practical examples are invaluable for addressing confusion.
2. ASU 2024-02: Codification Improvements – Amendments to Remove References to the Concepts Statements
Also issued in March, this technical update removes references to non-authoritative Concept Statements from the Codification, emphasizing the distinction between GAAP and theoretical frameworks. By eliminating these references, the FASB aims to streamline the Codification and clarify its authoritative guidance.
3. ASU 2024-03: Disaggregation of Income Statement Expenses
Issued in November, this update requires public business entities to provide more detailed breakdowns of expenses, such as selling, general and administrative expenses (SG&A) and cost of goods sold (COGS). Private companies and nonprofits are exempt. Key provisions include new expense categories, qualitative descriptions and disclosure of total selling expenses.
4. ASU 2024-04: Induced Conversions of Convertible Debt Instruments
This targeted update addresses gaps in accounting for convertible debt instruments, clarifying the distinction between induced conversions and debt extinguishments.
While these ASUs may not introduce sweeping changes, their focus on targeted improvements and clarity demonstrates the FASB’s ongoing commitment to refining existing standards in a way that enhances usability and reduces uncertainty for preparers and auditors.
Governmental Accounting Standards Board (GASB) Updates
The GASB issued two major standards in 2024, reflecting its continued efforts to refine governmental financial reporting:
1. GASB 103: Financial Reporting Model Improvements
Approved in April and issued in May, this long-awaited standard introduces changes to proprietary funds, MD&A and budget-to-actual variance presentations. While the proposed shift to a short-term financial resource measurement focus for governmental funds was abandoned, key updates include:
- Revised MD&A requirements to emphasize analysis over boilerplate language.
- Separate presentation of unusual or infrequent items in financial statements.
- Enhanced proprietary fund reporting, including clearer distinctions between operating and non-operating revenues and expenses.
- New requirements for major component unit reporting and budgetary comparison methods.
2. GASB 104: Disclosure of Certain Capital Assets
Issued in September, this statement addresses classification and disclosure requirements for newer asset types, including right-of-use assets from leases, subscription-based IT arrangements (SBITA assets) and public-private partnerships (PPP assets).
Together, these updates address emerging issues in governmental financial reporting and reflect GASB’s proactive approach to ensuring relevance in an evolving environment.
The American Institute of Certified Public Accountants (AICPA) Updates
The AICPA had a relatively quiet year with no new Statements on Auditing Standards (SASs) or Statements on Standards for Accounting and Review Services (SSARS). However, two notable updates stand out:
1. SSAE 23: Amendments to the Attestation Standards for Quality Management
This update aligns the SSAEs with the new quality management standards, joining the suite of standards that now includes SQMS 1, SQMS 2, SQMS 3, SAS 146 and SSARS 26.
2. Revised Ethics Standard (ET 1.295.135): Executive or Employee Recruiting
This update clarifies permissible executive and employee recruiting services to better address independence considerations.
The clear focus for 2024 was on Quality Management implementation, encouraging firms to adopt SQMS 1, SQMS 2 and SQMS 3. This transition underscores the profession’s commitment to promoting consistency and quality in practice.
Looking Ahead
While 2024 was light on new standards, the coming year promises significant developments:
- The FASB’s Invitation to Comment – Agenda Consultation seeks input on future priorities, potentially reshaping its standard-setting focus.
- A CECL update for private companies is expected in early 2025.
- The AICPA is considering whether Client Advisory and Accounting Services (CAAS) engagements should fall under preparation or consulting standards, which could impact independence rules.
Overall, the accounting profession took a strategic pause in 2024, reflecting on recent transformative changes while preparing for what is next. With a lighter slate of new standards, firms have had time to focus on quality management and adapt to significant shifts from prior years. The broader emphasis on implementation, clarity and refinement demonstrates the profession’s readiness to meet the challenges of an increasingly complex financial landscape.
As we look to 2025 and beyond, the evolving landscape of accounting standards continues to shape how we serve clients and uphold the profession’s integrity.
With an extensive background in accounting, auditing and adult learning theory, Jaclyn Veno oversees the development of Level Training programs for Galasso Learning Solutions, one of the ASCPA’s preferred CPE providers. To see a list of their ASCPA course offerings, go to www.ascpa.com/galasso.