Yesterday, the FASB approved a proposed decision process as a starting point for developing its overall disclosure framework. The Board added the disclosure framework project to its agenda in 2009 with the goal of establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant.

The approved decision process consists of a list of questions designed to formalize the Board’s method for identifying (1) needed disclosures and (2) useful disclosure information for consideration in future standard setting. The FASB also indicated that the framework, once finalized, may be used to evaluate (and potentially change) existing disclosure requirements.

The FASB staff is working closely on this project with the European Financial Reporting Advisory Group (EFRAG) to create a consistent framework for both U.S. and international GAAP. The staff also plans work with the SEC and the PCAOB to explore whether the application of materiality to disclosures of financial information can be clarified.

The FASB expects to issue a discussion paper on the project early next year.