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Journal Entry — Disclosure Framework — FASB Meets to Discuss Feedback

Published on: Feb 14, 2013

At its meeting yesterday, the FASB discussed the feedback from comment letters on its July 2012 discussion paper (DP) Invitation to Comment: Disclosure Framework.

As described at the meeting, the Board’s potential priorities for the disclosure framework project include (1) improving the FASB’s internal processes and standard setting, (2) coordinating with external parties such as the SEC and auditors, and (3) educating constituents on flexibility intended for disclosures under existing guidance. The Board also emphasized the importance of coordinating with the IASB as it evaluates a similar project.1

More specific potential priorities discussed by the Board include:

  • Addressing the project’s “boundary issues” (e.g., determining what information should be included in or excluded from the notes to the financial statements).
  • Clarifying materiality and relevance concepts.
  • Addressing the summary of accounting policies to eliminate perceived “disclosure overload.”
  • Improving the board’s decision-making process for standard-setting.
  • Clarifying the standard-setting approach and guidance related to interim disclosures.
  • Collaborating with external parties, such as auditors and the SEC, to address broader issues (e.g., audit issues related to disclosure flexibility, reducing duplication in disclosures in the notes and MD&A).

The staff was instructed to draft a plan for the project, after which the Board will meet again to discuss the proposed plan and decide on next steps.

 


[1] In developing the DP, the FASB staff worked with a team consisting of the European Financial Reporting Advisory Group, the Autorité des Normes Comptables (French standard setter), and the UK Financial Reporting Council Accounting Committee (UK standard setter). The European project team released a DP of its own concurrently with the FASB’s DP.

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