Prompted by concerns raised by FASB's Investors Technical Advisory Committee (ITAC), the SEC Advisory Committee on Improvements to Financial Reporting (CIFiR), and others, FASB Chairman Robert Herz announced at today's board meeting that FASB has added a project to its agenda on the Disclosure Framework.
Project Not Intended To Be 'Additive'
As noted in Herz' remarks and this FASB press release, the project is: "aimed at establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant." In addition, the project was prompted, in part, by concerns about ‘disclosure overload,’ and Herz said the project is not intended to be ‘additive.’
Private vs. Public Co. Scope To Be Determined
One of the issues FASB will consider is whether the disclosure framework developed under this project should apply to all entities, or perhaps exclude private or nonprofit entities.
Holistic Approach to SEC, FASB Disclosures
More generally, it appears FASB's Disclosure Framework project has the goal of taking a holistic approach with respect to public company disclosures required by FASB and the SEC.
The press release issued by FASB describing the project notes: "the [disclosure] framework would enable all entities to focus on making more coherent disclosures in their annual reporting package, move away from what some assert has become a compliance exercise, and perhaps facilitate XBRL electronic tagging of information." Besides the public/private company scope issue, other issues to be addressed in the project, according to the press release, include whether the disclosure framework should apply to interim reporting, focus only on high-level principles, focus only on notes to financial statemetns or extend to ways to better integrate information provided in financial statements, MD&A, and other parts of a company's public reporting package."
On potential timing of this project, which is being launched this quarter, Herz said at the board meeting “my best guess is we would issue a preliminary views type document some time in the first half of 2010.”
See also our separate blog post about today's FASB board meeting, regarding additional guidance coming on FIN 48, which is focused on (but does not exclusively apply to) pass-through entities.
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