FASB ISSUES PROPOSAL ON BOARD DECISION PROCESS FOR DISCLOSURE FRAMEWORK
PROJECT
Norwalk, CT, March 4, 2014—The Financial Accounting
Standards Board (FASB) today issued a proposed framework intended to improve its
process for evaluating existing and future disclosure requirements in notes to
financial statements. Stakeholders are encouraged to review and provide comment
on the Exposure
Draft, Conceptual Framework for Financial Reporting: Chapter 8: Notes to
Financial Statements (Concepts Statement), by July 14, 2014.
The
proposed Concepts Statement results from the FASB´s broader project to improve
the effectiveness of notes to financial statements. Specifically, it addresses
the Board´s process for identifying relevant information and the limits on
information that should be included in notes to financial statements. If
approved, it would become part of the FASB´s Conceptual Framework, which
provides the foundation for making standard-setting decisions.
"The
proposed Concepts Statement is intended to aid the FASB in identifying what
types of information the Board should consider when deciding on required
disclosures," said FASB Chairman Russell G. Golden. "We encourage our
stakeholders to review and provide comment on the proposal, and let us know if
they think it would help the Board achieve our objective of improving the
relevance of the information in those notes to investors and other financial
statement users."
As part of the proposed process, once the Board has
identified what should be broadly considered based on the concepts, the FASB
would:
- Identify information to be disclosed in the notes that is likely to be
helpful to those making decisions about providing resources and that would be
relevant to a significant number of the organizations to which it applies
- Eliminate disclosures of certain types of future-oriented information that
may have negative effects on the cash flow prospects of the reporting
organization and its investors and creditors, and
- Consider the costs and potential consequences of providing a disclosure in
the notes.
The proposed Concepts Statement also contains a discussion
of what the Board should consider when determining which disclosures should be
required at interim periods for those companies who produce such statements.
The FASB staff is in the process of compiling field study results as part of
the second component of the Disclosure Framework project, which addresses the
reporting entity´s decision process. The FASB will consider stakeholder feedback
on the 2012 Invitation
to Comment and the results from the field study when developing the entity´s
decision process.
The proposed Concepts Statement—including instructions
on how to submit comments—and a FASB
in Focus document are available at http://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 http://www.fasb.org/.