At its meeting yesterday, after discussing the results of its outreach to auditors, the FASB confirmed the tentative decisions it had made at its February 18, 2015, meeting on materiality of disclosures. In particular, the Board continues to believe that an entity should provide disclosures only to the extent material and that the omission of immaterial disclosures should not be considered an error. The Board also decided to further clarify in its draft of a proposed Accounting Standards Update (ASU) that these tentative decisions pertain only to disclosures and should not be analogized to other topics (e.g., guidance on recognition and measurement).

In addition, the Board tentatively decided that its guidance on disclosures would be effective upon issuance of a final ASU and that entities would be allowed to apply the guidance to all financial statements presented.

The Board directed its staff to seek external review feedback on the draft of the proposed ASU, and it plans to discuss the comments received at a future meeting. The Board also plans to work with the Auditing Standards Board and the PCAOB after the proposed ASU is issued to align the language related to materiality and thereby avoid any unintended consequences when the guidance in the final ASU is applied.