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FASB discusses inventory disclosures at September 19 meeting

  • FASB meeting Image

Sep 22, 2016

At its September 19, 2016, meeting, the FASB discussed inventory disclosures as part of its disclosure framework project.

The Board tentatively decided that all entities would be required to provide the following disclosures in their annual financial statements:

  • “Inventory disaggregated by component.”
  • “Inventory disaggregated by measurement basis.”
  • “Changes to the inventory balance that are not specifically related to the purchase, manufacture, or sale of inventory in the ordinary course of business.”
  • “A qualitative description of the costs capitalized into inventory.”
  • “The effect of last-in, first-out (LIFO) liquidations on income.”
  • “The replacement cost for LIFO inventory.”

Further, public business entities would be required to disclose, “in annual and interim periods, inventory by reportable segment or by component for each reportable segment if that information is regularly provided to the chief operating decision maker.”

The Board also tentatively decided to make various amendments to the inventory guidance in ASC 330.

The Board directed its staff to begin drafting a proposed ASU for a vote by written ballot. For more information, see the meeting minutes on the FASB’s Web site.

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