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FASB Continues Discussions on Disclosure Framework Project

During a discussion at last Wednesday’s meeting, the Financial Accounting Standards Board (“FASB”) made the following decisions on proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8, Notes to Financial Statements:

  • Nonprofits and private companies must be retained on the notes to financial statements.
  • A discussion on the possible negative consequences of disclosures will be included.
  • The disclosure of changes in line items not easily understood will be considered.
  • The disclosure of alternative measures clearly useful in reviewing prospects for future cash flows will be considered.
  • No disclosure objectives were established without giving specific requirements on how those objectives should be met.

At the conclusion of the meeting, FASB staff members were ordered to research how the Concepts Statement would change if employee benefit plans were included, as well as other examples of disclosures that offer information on how a line item is impacted by economic conditions, market factors, or other factors.

At future FASB meetings, the staff is expected to discuss three types of future-oriented information on the notes to financial statements, cost constraints in the proposed Concepts Statement, whether the Concepts Statement should include other concepts, information concerning past events and present conditions and circumstances that are unrecognized, details about the reporting entity, and interim reporting concepts.

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