Wednesday, August 18, 2010

Loss Contingency Comment Deadline Extended By FASB; Feedback Sought on Disclosure Framework Criteria

FASB announced earlier today that it has extended the comment period on its proposal on Loss Contingencies. The original comment deadline was this Friday (Aug. 20); the extended deadline is now Sept. 20.

The board reached this decision, noted FASB Chairman Robert Herz, after considering initial feedback on the proposal and the related original 30-day comment deadline.

Props to FEI Senior Manager Lorraine Malonza who listened to the webcast of today's FASB board meeting and gave me a heads up while I am on vacation (no, I am not at the Jersey Shore!)

Disclosure Framework Criteria
Also at today's meeting, the FASB noted they are considering the following criteria for disclosures under their Disclosure Framework project, i.e. that disclosures should:

  1. Add relevant information that is essential for primary users to understand the entity’s financial position including liquidity and financial flexibility, and changes in financial position, including financial performance and cash flows.
  2. Be a faithful representation of the phenomena the information purports to represent.
  3. Provide benefits that justify the costs of reporting that information.
Further, as noted in FASB's Summary of Board Decisions:

The Board directed the staff to seek input on the potential criteria from members of the project’s resource group and other interested constituents to determine whether the criteria function as intended or might have undesirable consequences.

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