Post-Implementation Review

What is the Post-Implementation Review (PIR) process?

The PIR process was initiated by the Financial Accounting Foundation’s (FAF) Board of Trustees as part of the FAF’s oversight responsibilities for its two standard-setting bodies—the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB). The PIR process is intended to assist the Trustees with their ongoing efforts to evaluate the effectiveness of the standard-setting process for both the FASB and the GASB.

Current and Completed PIR Projects

More information on FASB and GASB standards currently under review by the FAF’s Post-Implementation Review team, as well as FASB and GASB standards that were successfully reviewed.

PIR Objectives

The PIR process has three main objectives:
  1. To determine whether a standard is accomplishing its stated purpose
  2. To evaluate the selected standard’s implementation and continuing compliance costs and related benefits
  3. To provide feedback to improve the standard-setting process (as opposed to recommending standard-setting actions).
To determine whether a standard is accomplishing its stated purpose, the PIR team will assess whether:
  • The standard resolved the issues underlying its need
  • Decision-useful information is being reported to, and being used by, investors, creditors, and other users of financial statements
  • The standard is operational: that is, stakeholders are able to apply the standard as intended, the standard is understandable, and preparers are able to report the information reliably
  • Any significant unexpected changes to financial reporting or operating practices resulted from applying the standard
  • Any significant unanticipated consequences resulted from applying the standard.
To evaluate the selected standard’s implementation and continuing compliance costs and related benefits, the PIR team will assess whether:
  • Implementation and continuing compliance costs are consistent with the costs that the Board considered and stakeholders expected
  • Benefits are consistent with what the Board intended and stakeholders expected.
To provide feedback to improve the standard-setting process, the PIR team will assess whether the results of the review suggest that improvements are needed.

The PIR Process and Procedures

The PIR process is performed by a dedicated PIR team. The PIR Director reports to the FAF President and CEO and to the Trustees’ Oversight Committee. The PIR Director supervises the day-to-day activities of other Review staff. The Team includes experienced members of the Standards Boards’ staffs who have been released to the FAF to devote full-time efforts to the PIR function.

The PIR activities and procedures are independent from the activities of the Standards Boards and technical staff. The FAF by-laws require that standard setting be independent and objective, including independence from the Trustees’ influence.

Therefore, PIR reports on reviewed standards will not include standard-setting recommendations. Nevertheless, the PIR team discusses its procedures, research results, and conclusions (collectively, Findings) with the respective Standards Board’s members, who may make standard-setting action in response to technical matters indicated in the PIR findings.

The PIR team uses the following procedures to review FASB and GASB standards. The procedures may vary depending on the circumstances.
  • Review of project archives
  • Academic and other research
  • Stakeholder input via surveys and interviews
  • After completing the research, the PIR team compiles the procedures, research results, and conclusions into a Findings document, which is reviewed by the respective Standards Board’s Chair as well as the Oversight Committee.
The PIR Report, which summarizes the research results and conclusions is prepared by the PIR team, reviewed with the FAF Trustees, and then posted to the FAF website.

A document further detailing the current PIR process and procedures (as of January 2017) can be accessed here, and a FAQ document on the process can be accessed here. Prior versions of the PIR Process description document can be found here.

How does the PIR team select standards to review?

The Trustees decided that the PIR team should review only significant standards. The Trustees defined a significant standard as one that (a) brings substantial change in reporting or (b) has received a considerable amount of stakeholder input indicating that the standard might not be meeting its stated objectives.

Standards should be issued for a period of time before the PIR team reviews them to allow the Standards Boards time to address implementation issues that arise. Therefore, the PIR team will review FASB standards no earlier than two years after issuance and GASB standards no earlier than three years after issuance. The PIR team also will not review a standard that the FASB or the GASB is currently reconsidering.

The Post-Implementation Review Team

Kim Petrone (PIR leader)
FAF Chief of Staff