FASB Improves the Effectiveness of Disclosures in Notes to Financial Statements
NORWALK, Conn.--(BUSINESS WIRE)--Aug 28, 2018--The Financial Accounting Standards Board ( FASB ) today issued two changes to the FASB’s conceptual framework and two Accounting Standards Updates ( ASUs ) that improve the effectiveness of disclosures in notes to financial statements.
“The two changes to our Conceptual Framework will help the Board identify and evaluate disclosure requirements in accounting standards and clarify the concept of materiality,” said FASB Chairman Russell G. Golden. “Meanwhile, the new standards improve fair value and defined benefit disclosure requirements by removing disclosures that are not cost beneficial, clarifying disclosures’ specific requirements, and adding relevant disclosure requirements.”
A new chapter in the Conceptual Framework on disclosures. The chapter explains what information the Board should consider including in notes to financial statements by describing the purpose of notes, the nature of appropriate content, and general limitations. It also addresses the Board’s considerations specific to interim reporting disclosure requirements.
An update to an existing chapter of the Conceptual Framework for its definition of materiality. The amendment aligns the FASB’s definition of materiality with other definitions in the financial reporting system. The materiality concepts will now be consistent with the definition of materiality used by the U.S. Securities and Exchange Commission, the auditing standards of the Public Company Accounting Oversight Board and the American Institute of Certified Public Accountants, and the United States judicial system.
An ASU on Fair Value Measurement disclosure requirements. The standard improves the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The amendments are effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted.
An ASU on Defined Benefit Plan disclosure requirements. The standard improves disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020, for public companies, and for fiscal years ending after December 15, 2021, for all other organizations. Early adoption is permitted.
More information about the Conceptual Framework changes and the ASUs can be found at www.fasb.org.
About the Financial Accounting Standards Board Established in 1973, the FASB is the independent, private-sector organization, based in Norwalk, Connecticut, that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP). The FASB is recognized by the Securities and Exchange Commission as the designated accounting standard setter for public companies. FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA). The FASB develops and issues financial accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to investors and others who use financial reports. The Financial Accounting Foundation (FAF) supports and oversees the FASB. For more information, visit www.fasb.org.
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Christine L. Klimek, 203-956-3459
KEYWORD: UNITED STATES NORTH AMERICA CONNECTICUT
INDUSTRY KEYWORD: PROFESSIONAL SERVICES ACCOUNTING FINANCE
SOURCE: Financial Accounting Standards Board (FASB)
Copyright Business Wire 2018.
PUB: 08/28/2018 11:30 AM/DISC: 08/28/2018 11:30 AM