Project Update

Disclosure Framework—Board's Decision Process

Last updated on November 3, 2017. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

Project Objective and Overview
Due Process Documents
*Decisions Reached at Last Meeting
*Tentative Board Decisions Reached to Date
*Next Steps
*Board/Other Public Meeting Dates
Public Outreach
Resource Group and Other Outreach
Background Information
Contact Information

Project Objective and Overview

The objective and primary focus of the Disclosure Framework project is to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements. (Although reducing the volume of the notes to financial statements is not the primary focus, the Board hopes that a sharper focus on important information will result in reduced volume in most cases.)

The objective of improving effectiveness will require development of a framework that promotes consistent decisions about disclosure requirements by the Board and the appropriate exercise of discretion by reporting entities. To achieve this objective, the Disclosure Framework project comprises two components: the Board’s decision process and the Entity’s Decision Process.

The Board’s Decision Process is intended to aid the FASB in identifying disclosures to be considered when setting disclosure requirements for individual accounting standards and evaluating existing disclosure requirements. A disclosure that may be considered by the FASB will not automatically be required. This process involves the FASB and its staff continuing to evaluate the costs, negative consequences, and benefits associated with each potential disclosure at the standard level.

Currently, four disclosure areas are being evaluated as part of the disclosure framework project. Each review will include (1) evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s decision process and (2) promotion of the appropriate use of discretion by entities specifically within the Topic. The Board’s decision process and the entity’s decision process are being used in conjunction to modify the Disclosure Sections in the following Topics:
  1. Fair Value Measurement (Section 820-10-50)  
  2. Defined Benefit Plans (Section 715-20-50)
  3. Income Taxes (Section 740-10-50)
  4. Inventory (Section 330-10-50)
Additionally, disclosure requirements for interim reporting are being evaluated for modifications.

The FASB staff has developed a “Q&A: FASB’s Disclosure Framework Project” fact sheet, which can be viewed here.

Due Process Documents

On March 4, 2014, the FASB issued the proposed Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The due date for comment letters was July 14, 2014.

On July 12, 2012, the Board issued an Invitation to Comment, Disclosure Framework. The original due date for comment letters was set for November 16, 2012, but because of Hurricane Sandy the comment period was extended two weeks to November 30, 2012.

*Decisions Reached at Last Meeting (November 1, 2017)

The Board discussed issues related to the proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements.

The Board decided the following:
  1. The Concepts Statement would retain Appendix A, Decision Questions to Be Considered in Establishing Disclosure Requirements, with additional introductory language.
  2. Information about the potential effects of changes in (a) general economic conditions or market factors or (b) entity- or sector-specific factors on a line item should be removed from the chapter as disclosures that the Board should consider in establishing disclosure requirements.
  3. Future-oriented information is acceptable for disclosure when it is information about estimates and assumptions used as inputs to measurements; it is not acceptable when it is information about the effect of specified future changes in existing conditions on specific line items.
  4. The discussion of information about existing plans and strategies should be limited to those that affect recognition and measurement.
  5. The Concepts Statement would retain the concepts on interim disclosures.
  6. Information about past events and current conditions and circumstances that can affect an entity’s cash flows and information about the reporting entity are suitable for notes.
  7. The discussion of the assessment of cost should not be expanded.
  8. The concepts on the notes to financial statements, subject to decisions made in redeliberations, are substantially complete.

*Tentative Board Decisions Reached to Date (as of November 1, 2017)

Tentative Board Decisions to Date

*Next Steps

The staff will draft the chapter and distribute that draft for external review. Following external review, the staff will bring back any additional issues. Also, the staff plans to redeliberate issues on materiality at a future meeting.

*Board/Other Public Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

*November 1, 2017 Board Meeting—Board's Decision Process
October 4, 2017 Board Meeting—Board's Decision Process
July 19, 2017 Board Meeting—Board's Decision Process
February 18, 2015 Board Meeting—Board’s Decision Process
November 19, 2014 Board Meeting—Materiality
September 10, 2014 Board Meeting—Comment Letter Summary and Possible Next Steps
November 6, 2013 Board Meeting—Interim Reporting, Scope of the Board’s Decision Process, and Permission to Ballot
October 9, 2013 Board Meeting—Additions and other Changes to the Board’s Decision Process and Interim Reporting
August 7, 2013 Board Meeting—The Needs of Providers of Resources to Not-for-Profit Entities and Line Items Decision Questions
July 25, 2013 Board Meeting—Role of the Notes, and SEC Disclosure Overlap within the Financial Report, and Other Regulatory Disclosure Overlap outside the Financial Report
June 19, 2013 Board Meeting—Forward-Looking Disclosure Information, Decision Questions, and Changes to the Technical Plan
February 13, 2013 Board Meeting—Comment Letter Summary and Analysis of Comments and Possible Next Steps
April 25, 2012 Board Meeting —Interim Disclosures and Cost Consequence
August 24, 2011 Board Meeting—Decision Process for Disclosures about Line Items
August 18, 2010 Board Meeting—Objectives, Principles, and Criteria for Use in Setting Standards for Required Disclosures of Financial Information

July 8, 2009

Board MeetingAgenda Announcement

Public Outreach

On December 1, 2014, the FASB held a forum to discuss financial disclosures at Pace University in New York City.

Read the media meeting recap from the forum discussion on financial disclosures

Download and listen to the audio replay of the forum

In 2012, the FASB, in conjunction with the Center for Audit Quality (CAQ), held two forums on disclosure effectiveness designed to encourage dialogue among a wide range of financial reporting stakeholders on improving the effectiveness of disclosures in notes to financial statements and other parts of the financial reporting package. The forums were held at Columbia University’s Center for Excellence in Accounting and Security Analysis in New York City on October 4, and at the Stanford University Graduate School of Business in Stanford, California, on October 8.

Resource Group

The Board established a resource group to help identify key issues with existing disclosures and evaluate proposed solutions. The membership of that group includes academics, analysts, auditors, preparers, and regulators. The staff consults informally with members of the resource group as needed. The group met with Board members and staff on October 28, 2011. Future meetings will be scheduled if necessary.

Background Information

On July 8, 2009, the FASB chairman announced (press release) the addition of a new agenda project aimed at establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant. The project was added in response to requests and recommendations received from several constituents, including the Investors Technical Advisory Committee (ITAC) and the U.S. Securities and Exchange Commission’s (SEC) Advisory Committee on Improvements to Financial Reporting (Recommendations 1.2 and 1.3).

The staffs of the Board and the European Financial Reporting Advisory Group (EFRAG) have cooperated in the development of the ideas discussed in the 2012 Invitation to Comment and a similar discussion paper issued by EFRAG.

Contact Information

Nick Cappiello
Project Manager

Haoran Jiang
Postgraduate Technical Assistant

Kelly Coyne
Postgraduate Technical Assistant