NEWS RELEASE 07/12/12
FASB Seeks Input on Disclosure Framework
Norwalk, CT, July 12,
2012—The Financial Accounting Standards Board (FASB) today issued the
Invitation to Comment, Disclosure Framework, to ask for stakeholder
input on ways to improve effectiveness of disclosures in notes to financial
statements of public, private, and not-for-profit organizations. Stakeholders
are asked to provide comments by November 16, 2012.
The Invitation to
Comment is the FASB´s first step in soliciting broad input on ways to improve
disclosure effectiveness. The Invitation to Comment addresses the following
topics:
- A decision process that could aid the Board in establishing disclosure
requirements that address relevant information and only relevant
information
- Flexible disclosure requirements that could be adapted by each reporting
organization to focus on information that is relevant in its specific
circumstances
- A judgment framework that could help each reporting organization determine
which disclosures are relevant in its specific circumstances
- Organization and formatting techniques that could make the information
users need easier to find and understand.
The document also discusses
disclosure requirements for interim period financial statements.
The
paper does not propose any specific changes but rather suggests a number of
possibilities that the Board believes could lead to more effective disclosures
by reporting organizations. The Board believes that establishing a framework for
disclosure is an important first step before any specific changes to existing
disclosure requirements are considered.
When the framework has reached a
sufficient level of development, the Board plans to apply that framework to
existing standards. Applying the framework to existing standards could
eventually result in modifying existing requirements or establishing new ones;
any such changes would be exposed for public comment.
"Many stakeholders
have expressed concerns about the relevance and sheer volume of information in
notes to financial statements, and that some information is either missing or
difficult to find," said FASB Chairman Leslie F. Seidman. "Therefore, the FASB
is looking to improve its own procedures for establishing disclosure
requirements and to provide a way for reporting organizations to exercise
judgment about which disclosures are relevant to them. The ultimate goal is to
enhance users´ abilities to analyze the information in the notes to financial
statements while minimizing the burden on reporting organizations."
The
European Financial Reporting Advisory Group (EFRAG), which provides advice to
the European Commission on issues relating to the application of International
Financial Reporting Standards in the European Union, is working on a similar
disclosure framework project. The EFRAG is working jointly with the French
Accounting Standards Authority (Autorité Des Normes Comptables) and the
Financial Reporting Council of the UK.
Before the conclusion of the
comment period, the FASB will conduct additional outreach with preparers, users,
and auditors of financial statements to solicit their input on the proposal,
including a webcast in the coming months. Further information including a
podcast and a "FASB In Focus"— high-level summaries of the Invitation to
Comment—will be available on the FASB website at www.fasb.org.
About
the Financial Accounting Standards Board
Since 1973, the
Financial Accounting Standards Board has been the designated organization in the
private sector for establishing standards of financial accounting and reporting.
Those standards govern the preparation of financial reports and are officially
recognized as authoritative by the Securities and Exchange Commission and the
American Institute of Certified Public Accountants. Such standards are essential
to the efficient functioning of the economy because investors, creditors,
auditors, and others rely on credible, transparent, and comparable financial
information. For more information about the FASB, visit our website at www.fasb.org.