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FASB Seeks More Information on Inventory Disclosures

Businesses using the Retail Inventory Method (“RIM”) could be facing additional disclosure requirements in the future. The Financial Accounting Standards Board (“FASB”) has agreed to a proposal that would require public companies to disclose qualitative and quantitative details on: the cost-to-retail ratio; the retail worth of the inventory at the reporting period’s end; losses; markups or markdowns; and any key accounting policies used to compute the inventory’s value. Companies also would have to disclose their inventory by segment, and then provide further details if that information helps determine how their business operates. Analysts and investors have called for additional disclosures. Read More.

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