FASB Invitation to Comment, Selected Issues Relating to Assets and Liabilities with Uncertainties
On September 30, 2005 the FASB issued an Invitation to Comment, Selected Issues Relating to Assets and Liabilities with Uncertainties. The purpose of the Invitation to Comment is to solicit feedback that may be helpful in analyzing some of the issues that have a bearing on the role of probability and uncertainty in defining, recognizing, and measuring assets and liabilities. That role currently varies among FASB standards and Concepts Statements, as well as between the FASB and the IASB.
Beginning in the fourth quarter of 2005, the FASB and IASB expect to begin work on the next phase of their joint conceptual framework project. That phase will focus on definitions of financial statement elements (assets, liabilities, revenues, expenses, and others), concepts for recognizing and derecognizing items that meet the definition of an element, and attributes for measuring recognized items. Deliberations will involve reconsideration of concepts in FASB Concepts Statements No. 5, Recognition and Measurement in Financial Statements of Business Enterprises, and No. 6, Elements of Financial Statements, and the IASB Framework for the Preparation and Presentation of Financial Statements, and may result in revisions to the existing definitions of elements, concepts for recognizing (derecognizing) them, and attributes for measuring them. Consideration of probability and uncertainty will be one aspect of the deliberations on these matters, and responses to the Invitation to Comment will enter into that consideration.
Interested parties are encouraged to download a copy of the Invitation to Comment from the FASB website and respond by the comment letter deadline of January 3, 2006. The IASB also is seeking comments from constituents on related issues in its June 2005 Exposure Draft, Amendments to IAS 37 Provisions, Contingent Liabilities, and Contingent Assets and IAS 19 Employee Benefits.
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