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Deloitte comments on FASB's proposal on inventory disclosure requirements

Published on: Mar 13, 2017

Deloitte & Touche LLP comments on the FASB's proposed ASU Changes to the Disclosure Requirements for Inventory, which was issued in January 2017.

An excerpt from the comment letter is shown below:

We support the FASB’s ongoing efforts to improve the effectiveness of disclosures in the notes to the financial statements. We agree with many aspects of the Board’s proposed ASU. Specifically, we applaud the Board’s emphasis on considering materiality for disclosures. However, we believe some of the newly proposed disclosure requirements warrant further clarification or revision, as explained in our responses to the questions for respondents in the appendix below.

While we support the Board’s project to improve disclosure effectiveness, we believe the Board should undertake a more fulsome examination of costs that should be capitalized as part of inventory and costs charged to cost of goods sold. Such a project would be beneficial due to significant diversity in current practice in those areas.

For more information, see the full text of the comment letter which is available below.


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