Project Update

Disclosure Framework—Entity’s Decision Process

Last updated on March 26, 2018. 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
Field Study
Due Process Documents
*Decisions Reached at Last Meeting
*Tentative Board Decisions Reached to Date
*Next Steps
*Board/Other Public Meeting Dates
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 Entity’s Decision Process is intended to promote the use of discretion by reporting entities when evaluating the requirements as set forth by the Board.

Currently, four sets of disclosure requirements are being reviewed as part of the Disclosure Framework project. Each review will include (1) an evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s decision process and (2) consideration of ways to promote the appropriate use of discretion specifically within the Topic. The Board’s decision process and the entity’s decision process are being used together 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 40-10-50)
  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.

Field Study

The FASB conducted a field study that tested the ability of public and private companies and not-for-profit organizations to exercise discretion over which disclosures they provide in notes to financial statements. The FASB staff presented the results of this field study and next steps based on the field study findings at the April 4, 2014 Board meeting.

Due Process Documents

On September 24, 2015, the Board issued a proposed Accounting Standards Update, Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material. The due date for comment letters was December 8, 2015. On September 24, 2015, the Board issued a proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 3: Qualitative Characteristics of Useful Financial Information. The due date for comment letters was December 8, 2015. 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 the Last Meeting (March 21, 2018)

The Board completed redeliberations of the proposed amendments to FASB Concepts Statement No. 8, Conceptual Framework for Financial ReportingChapter 3, Qualitative Characteristics of Useful Financial Information. The Board also discussed whether to move forward with amending Topic 235, Notes to Financial Statements, and the Disclosure Sections throughout the FASB Accounting Standards Codification® by redeliberating the issues addressed in the proposed Accounting Standards Update, Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material.
The Board made the following decisions:
  • The Board decided to keep the definition of materiality included in the staff’s draft of Chapter 3 consistent with FASB Concepts Statement No. 2, Qualitative Characteristics of Accounting Information, and to leave the discussion of the nature of the item in subsequent paragraphs. 
  • The Board decided to not incorporate any additional content from Concepts Statement 2 into the amendments to Chapter 3. 
  • The Board directed the staff to draft the final amendments to Chapter 3 for vote by written ballot. 
The Board decided to not amend Topic 235 and, therefore, not reference those amendments in the Disclosure Sections of the Codification.

*Tentative Board Decisions Reached to Date (as of March 21, 2018)

Tentative Board Decisions Reached to Date

*Next Steps

The staff will draft the final amendments to Chapter 3 for vote by written ballot.

*Board/Other Public Meeting Dates

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

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.
*March 21, 2018 Board Meeting—Entity’s Decision Process
November 8, 2017 Board Meeting—Entity’s Decision Process
December 14, 2016 Board Meeting—Entity’s Decision Process
March 2, 2016 Board Meeting—Entity’s Decision Process
July 29, 2015 Board Meeting—Entity’s Decision Process
April 22, 2015 Board Meeting—Entity’s Decision Process
February 18, 2015 Board Meeting—Flexible Disclosure Requirements
May 28, 2014 Board Meeting—Interim Disclosures
April 4, 2014 Board Meeting—Field Study Results and Next Steps
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

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 Invitation to Comment and a similar discussion paper issued by EFRAG.

*Contact Information

Nick Cappiello
Project Manager

Kelly Coyne
Postgraduate Technical Assistant

Francesca Roberts
Postgraduate Technical Assistant