Agreements and Disagreements between Comment Letters

The regulations and the related standards of accounting have been the base on which the current exposure draft has been generated. The draft is based on creating an understanding on the developments that can be made in the income statement and thereafter a better reporting of the comprehensive income is possible. The improvements in the accounting standards are possible with the help of which regulations on the financial transactions are possible and monitoring and construction of the income statement is possible in an effective manner (Anderson et al., 2016). These updates are helpful in discovering the errors that are present and accordingly undertake steps so that these errors can be minimised.

This assignment looks to create an understanding of the views and the comments that have been given out the four companies that have been chosen and these letters are seen in the FASB website and therefore assistance from the website has been taken in order to take care of these issues (Conner, 2016). This assignment therefore undertakes a decisive evaluation of all the comments provided by the four organizations and thereafter understands their views with the help of which conclusive results can be obtained so that the new accounting standards would be assessed and their effectiveness would be finalised. Hence, this process of offering the proposal to the public and thereafter receiving their comments and views are understandable in mitigating a lot of issues and problems. The other goal of the assignment is to state the method of finalising the guiding concepts and principles that are associated to the accounting process and this would create better standards of accounting (Okamoto, 2017). In addition, the evaluation of the comments in order to have an understanding of the acceptance and rejection by the organizations in order to gain the final result will be helpful in the development of better standards of accounting.

The changes that have been proposed in the accounting standards are done in order to look after the feelings and the sentiments of the organizations with the help of which the performance of the business can be developed and thereafter the overall business activities would enhance. Shi et al., (2017) provided a comment that standards and regulations of accounting try to answer to the ideas and the understandings of the companies and accordingly gather better results with the help of the comments that have been gathered. FASB gets assistance from these comments as they are opinions towards the draft proposal and the use of this strategy is effective enough in creating an better public interests (Hussey, 2017). The comments look to answer to the changes that are recommended by FASB so that better results can be attained. There numerous aspects on which the draft has proposed changes and in this manner answering to these questions can be helpful in looking into the public interests.

Observing Patterns in Responses

The assignment is looking to explain the comments and the advises that have been provided by the companies in order to gather the understanding the ideas and the understandings of them and accordingly discover the changes that can be made with the help of which effective level of understandings can be attained (Dyson, 2015). Therefore, the comments that have been given by the different companies have been listed as follows:

The Travellers Companies Inc

The organzaiiton that has been taken into consideration is associated with the property and casualty services and products and mainly concentrates on providing insurances. The opinion that has been given by the firm in their letter has highlighted the fact that they have agreed to the propositions that have been presented in the draft and especially to the one of providing assistance to the process of GAAP that would explain the deferred assets and liabilities. The firm even agrees to the ASU that has been recommended with respect to the reclassification of the comprehensive income that has been accumulated (Weidner, 2017). The company therefore agrees to the draft proposal of FASB as this would enhance the operational activities and therefore agrees to the changes that have been suggested.

Chevron Companies

The company is related to the energy sector and manufactures natural gas and crude oils mainly. The company has a significant role to play in the development of the global economy. The proposal that have been presented by FASB has been answered by the company with the help of the letter provided on their behalf (Cipriano, 2016). The firm has provided feedback on all the questions and has specifically concentrated on the reclassification of the asset. The letter has discovered that this company agrees to the propositions as well and even supports the timely incorporation. The date that is suggested in the draft is even seconded and the firm agrees to the proposal of reclassification but provides the opinion that the effect of the transformations in the extent of tax on the foreign ancillaries can lead to the effect on the impact of the stranded taxes.

The Goodyear Tire and Rubber Company

This company is related to the production of tires and other products related to tires and in accordance to proposal that is constructed by the FASB, the firm does not agree to the process of reclassification and the demand for the alterations as the company feels that it would lead to a higher amount for the taxes that are stranded and thereby defeating the intention of the changes.

Goals of Comment Letters

The firm however, agrees to the process of backward tracing that is recommend by FASB in the draft as this would take away the effects of the stranded taxes from the constructors of the financial statements (Xu, & Doupnik 2016).

American Bankers Association

This body has the function of taking care of the operations of banking that is performed in United States. All the concerns and the issues related to banking are taken care of and thereby proper banking model can be maintained. The association is happy to be able to able to express their feelings with respect to this draft and thereafter the association feels that the recommended process would create a better value in accordance to the comprehensive income and feels that the earnings that have been attained can misled the investors and therefore have additional pressure on the management (Kim, 2016). This changes will not be assistive to the banks as in certain cases the stranded value may have an impact on the degree of capital. Hence, the overall the proposal states that the association disagrees to the proposal as these proposals can have an impact on the financial documentation and transactions of the banks.

The proposal has identified that the changes that have been proposed are vital as the alterations in the process of creating the income statement and explanation of the comprehensive income would be assistive in the development of the income statement that can be implemented and accordingly better outcome would be created.

Conclusion 

The outcome that has been discovered from the letters provided by the companies explains the fact that changes in the proposal draft needs to be undertaken with the help of which better income statement and explanation of the comprehensive income can be done.

Reference List 

Anderson, U. L., Doxey, M. M., Geiger, M. A., Gist, W. E., Janvrin, D. J., & Polinski, P. W. (2016). Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on FASB Exposure Draft of Proposed Accounting Standard Update: Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material: Participating Committee Members. Current Issues in Auditing, 10(2), C1-C9.

Cipriano, M. (2016). Bad Will: Why the FASB’s Proposed Fix of Goodwill Accounting Will Not Fix the Goodwill Problem. Journal of Corporate Accounting & Finance, 27(6), 89-92.

Conner, B. (2016). Healthcare not-for-profits: FASB exposure draft highlights flexibility in financial statement presentation. Healthcare financial management: journal of the Healthcare Financial Management Association, 70(3), 34-37.

Dyson, R. A. (2015). Commentary on FASB’s Proposed Changes to Nonprofit Financial Statements: Overhaul Falls Short on Usefulness and Practicality. The CPA Journal, 85(10), 11.

Hussey, R. (2017, May). Leasing of Assets: A Content Analysis of Comment. In GAI International Academic Conferences Proceedings (p. 23).

Kim, J. H. (2016). Presentation formats of other comprehensive income after accounting standards update 2011-05. Research in Accounting Regulation, 28(2), 118-122.

Okamoto, N. (2017). Norm entrepreneur lobbying and persuasion: A case study involving the IASB’s modification of an exposure draft. Research in Accounting Regulation, 29(2), 129-138.

Shi, L., Wang, P., & Zhou, N. (2017). Enhanced disclosure of other comprehensive income and increased usefulness of net income: The implications of Accounting Standards Update 2011–05. Research in Accounting Regulation, 29(2), 139-144.

Weidner, D. J. (2017). New FASB Rules for Leases: A Sarbanes-Oxley Promise Delivered. Business Lawyer, 72(2), 367.

Xu, Y., & Doupnik, T. (2016). The impact of different types and amounts of guidance on the implementation of an accounting principle. Research in Accounting Regulation, 28(2), 66-76.