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Cross-cutting issues – Disclosure issues in the revenue recognition, leases, and insurance contracts projects

Date recorded:

Disclosure issues in the revenue recognition, leases, and insurance contracts projects

The staffs presented the boards with several observations and questions related to cross-cutting disclosure issues in revenue recognition, leases, and insurance contracts. The objectives for the meeting were to add consistency across the disclosure proposals and address themes from the comment letters and feedback.

The first observation related to concerns about disclosure overload. The staffs observed that there is existing guidance to prevent disclosure overload due to large amounts of insignificant detail or information that is not material. There were no objections to this observation.

The second observation related to concerns about disclosure overload related to roll forward requirements. The staffs observed that the boards should assess the costs and benefits of the roll forwards in the context of the individual projects and not assess the roll forwards wholly as the result of a cross cutting concern. There were not significant objections to this observation.

The third observation related to consistency of guidance related to roll forwards. The staffs observed that the roll forward requirement should be consistent with that included in the insurance contracts and revenue recognition proposals. There were not significant objections to this observation.

The first question related to roll forward requirements to be in tabular format. The staffs asked if the boards agreed that the requirement to provide roll forward information in tabular format should be considered across all three projects. The boards generally supported this conclusion.

The fourth observation related to disaggregation of revenues. The staffs observed that information is useful when disaggregated by segment based on work and outreach in other projects. The staffs observed the challenges of disclosing that information in the context of this project and that this issue could better be addressed as part of the boards other projects and activities. There were not significant objections to this observation.

The fifth observation related to disaggregation of all disclosures by, at a minimum, reportable segment for insurance contracts. The staffs observed that this may be considered disclosure overload when the other projects have different requirements. The staffs recommended that the boards redeliberate the disclosures included in the insurance contracts project. There were not significant objections to this observation.

The sixth observation related to incorporating judgements and assumptions into disclosures. The staffs observed that the differences are project specific and should not be addressed as part of a cross cutting issue discussion. There were not significant objections to this observation.

The second question related the alignment of the wording and structure of the disclosures for all three projects. The boards generally supported that the staffs needed to perform additional work to further align the wording and structure.

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