This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Highlights from the FASB’s May 28 meeting

  • News default Image

Jun 03, 2014

At its May 28, 2014, meeting, the FASB discussed (1) two new projects that the Board has added to its agenda as part of its “Simplification Initiative” (the Board’s effort to reduce cost and complexity in U.S. GAAP), (2) its project on financial statements of not-for-profit entities, and (3) the entity decision process phase of its disclosure framework project.

 

Simplification initiative

The FASB has added projects on the following topics to its agenda:

  1. Simplifying the measurement of inventory.
  2. Simplifying income statement presentation by eliminating extraordinary items.


Simplifying the measurement of inventory

The FASB tentatively decided that “inventory would be measured at the lower of cost and net realizable value” and that “[a] reporting entity would no longer consider replacement cost or net realizable value less an approximately normal profit margin when measuring inventory.” In addition, the Board tentatively decided that the recurring inventory disclosure requirements should be retained and that inventory measurement should be prospectively required after the adoption date.

Simplifying income statement presentation by eliminating extraordinary items

The FASB tentatively decided to “remove the concept of extraordinary items from U.S. GAAP” and to require prospective application of this tentative decision.

For more information, see the meeting minutes on the FASB's Web site.

Financial statements of not-for-profit entities

The FASB tentatively decided that “an entity should define the time horizon it uses to manage its liquidity” and should disclose certain quantitative and qualitative information such as the total amount of financial assets, the amounts that are not available to meet cash needs within the time horizon, and its strategy for addressing entity-wide risks that may affect liquidity.

For more information, see the meeting minutes on the FASB's Web site.

Disclosure framework: entity’s decision process

The FASB tentatively decided to amend ASC 270 to state that an entity should provide, in the interim report, any significant updates to information disclosed in the annual financial statements that may be “viewed by a reasonable investor as significantly altering the ‘total mix’ of information available to the investor.”

For more information, see the meeting minutes on the FASB's Web site.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.