FASB seeks input on disclosure framework

Jul 19, 2012

FASB has issued a disclosure framework and invitation to comment in its efforts to improve the effectiveness of disclosures in notes to financial statements. Stakeholders are asked to provide comments by Nov. 16.

The document addresses five topics:

  1. A decision process that could help the board establish disclosure requirements that address relevant information and only relevant information.
  2. Flexible disclosure requirements that could be adapted by each reporting organization to focus on information that is relevant in its specific circumstances.
  3. A judgment framework that could help each reporting organization determine which disclosures are relevant in its specific circumstances.
  4. Organization and formatting techniques that could make the information users need easier to find and understand.
  5. 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 the board thinks could lead to more effective disclosures by reporting organizations. The board thinks establishing a framework for disclosure is an important first step before any specific changes to existing disclosure requirements are considered.

When the framework has been sufficiently developed, the board plans to apply that framework to existing standards which could eventually result in modifying existing requirements or establishing new ones. Any such changes would be exposed for public comment.