Objective:

The objective of this project is to determine whether and how SEC disclosure requirements referred to the Board as part of the SEC’s Disclosure Update and Simplification initiative should be incorporated into the Codification.
 

Background:

On July 13, 2016, the SEC proposed amendments to certain of its disclosure requirements that it believed were duplicative, overlapping, or outdated in light of other SEC disclosure requirements, the FASB Codification, or changes in the information environment. The SEC received comment letters from stakeholders on several disclosures that overlap with, but require information incremental to, GAAP that assisted the SEC in determining whether to retain, modify, eliminate, or refer those disclosure requirements to the Board for potential incorporation into the Codification. On August 17, 2018, the SEC voted to adopt amendments to its disclosure requirements based on comment letter feedback on the proposed amendments. Upon adopting those amendments as part of the final rule, the SEC formally referred certain disclosure requirements to the Board to be considered for incorporation into the Codification (the referred disclosures).

The SEC has requested that the Board consider the referred disclosures as part of its normal standard-setting process. On March 6, 2019, the Board decided to add a project to its technical agenda to address the referred disclosures.

Exposure Draft(s):

On May 6, 2019, the Board issued proposed Accounting Standards Update, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The due date for comment letters was June 28, 2019.

• Download the May 6, 2019 proposed Accounting Standards Update, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

Comment Letters:

• Read the comment letters on the proposed Accounting Standards Update.

There are no media releases or educational materials at this time.

Decisions Reached at Last Meeting (May 17, 2023):

Disclosure improvements in response to the SEC’s release on disclosure update and simplification. The Board redeliberated the proposed Accounting Standards Update, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, and made the following decisions:

Referred Disclosures Incorporated into the Codification

Referred Disclosure*	Summary Description of Referred Disclosure	Board Decision
4. Interim—Changes in Reporting Entity	Disclose in interim financial statements any material retroactive prior-period adjustment and the effect of the adjustment on net income and retained earnings.	Affirmed decision to incorporate with minor clarifying edits.
5. Interim—Earnings per Share (EPS)	Disclose the basis of the EPS computation together with the number of shares used in the computation.	Affirmed decision to incorporate with minor clarifying edits.
7. Assets Subject to Liens	Disclose assets mortgaged, pledged, or otherwise subject to lien and the obligations collateralized.	Affirmed decision to incorporate with minor clarifying edits.
8. Debt	Disclose amount and terms of unused lines of credit for short-term financing and the weighted-average interest rate associated with outstanding short-term borrowings.	Affirmed decision to incorporate with minor clarifying edits and provided an exemption to entities other than public business entities for the weighted-average interest rate disclosure.
9. Preferred Shares	Present preferences on involuntary liquidation, if other than par or stated value, parenthetically in the equity section of the balance sheet.	Affirmed decision to incorporate with minor clarifying edits.
12. Derivative Accounting Policies	Disclose where and when derivative instruments and their related gains and losses are reported in the statement of cash flows.	Affirmed decision to incorporate with minor clarifying edits and only require the disclosure in annual periods, unless there is a change in accounting policy during an interim period.
15. Repurchase Agreements (Accrued Interest Payable) (1 of 3)	Include amounts for accrued interest payable in the disclosure of the repurchase liability.	Affirmed decision to incorporate with minor clarifying edits.
16. Repurchase Agreements (Interest Rate) (2 of 3)	Disclose interest rates associated with repurchase liabilities.	Affirmed decision to incorporate with minor clarifying edits and provided an exemption to entities other than public business entities.
17. Repurchase Agreements (Counterparty Risk) (3 of 3)	Disclose amounts at risk with an individual counterparty if that amount exceeds more than 10 percent of stockholders’ equity.	Affirmed decision to incorporate with minor clarifying edits.
18. Reverse Repurchase Agreements (Separate Balance Sheet Presentation) (1 of 2)	Present reverse repurchase agreements on the face of the balance sheet if the carrying amount exceeds 10 percent of total assets.	Affirmed decision to incorporate with minor clarifying edits.
19. Reverse Repurchase Agreements (Provisions to Protect against Decrease in Market Value) (2 of 2)	Disclose whether there are any provisions in a reverse repurchase agreement to ensure that the market value of the underlying assets remains sufficient to protect against counterparty default.	Affirmed decision to incorporate with minor clarifying edits.
20. Oil- and Gas-Producing Activities	Specify that compliance with Subtopic 932-235 is required for each annual period presented in the applicable financial statements.	Affirmed decision to incorporate with minor clarifying edits.
21. Technical Correction for Investment Companies	Clarify requirements for investment companies to disclose components of capital on the balance sheet.	Affirmed decision to incorporate with minor clarifying edits.
22. Real Estate Investment Trusts (REITs)	Disclose tax status of distributions per unit (for example, ordinary income, capital gain) for REITs.	Affirmed decision to incorporate with minor clarifying edits.

*Disclosure numbers refer to the disclosure numbers from the Board Memo Handout dated May 17, 2023.

Referred Disclosures Not Incorporated into the Codification

The Board decided not to incorporate into the Codification the following disclosures that were previously included in the proposed Update: 6. Products or Services, 10. Common Control Transactions in Interim Periods, 11. Consolidation, 13. Foreign Currency, and 14. Intra-Entity Profits and Losses.

The Board affirmed its decision not to incorporate into the Codification the following referred disclosures that were not previously included in the proposed Update: 23. Equity Compensation Plans, 24. Discounts on Shares, 25. Major Customers, 26. Authorized Amount of Debt, and 27. Financial Statement Presentation of Related Party Transactions.

Debt in Default Disclosure Not Addressed in Project

The Board decided not to address as part of this project the referred debt in default disclosure that was originally included the project on simplifying the balance sheet classification of debt, which was removed from the Board’s technical agenda in 2021.

Transition

The Board affirmed its decision that an entity should apply the amendments prospectively.

Effective Date

The Board decided that the effective date for each amendment will be the same as the SEC’s effective date to remove that related disclosure from Regulations S-X and S-K for all entities subject to the existing SEC disclosure requirements, with early adoption prohibited. The Board decided that each amendment will be effective for all other entities two years later.

The Board decided that if by June 30, 2027, the SEC has not issued amendments to remove the applicable requirements from Regulation S-X or Regulation S-K, any final amendments that have not been addressed by SEC rulemaking will be removed from the Codification as pending content.

Analysis of Costs and Benefits

The Board concluded that it has received sufficient information and analysis to make an informed decision on the expected costs and expected benefits of the amendments and that the expected benefits of those amendments would justify the expected costs.

Permission to Ballot

The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.

The Board meeting minutes, handouts, and videos 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.

The following are links to the minutes for each meeting.  To view Board meetings and handouts from the past 90 days, click here .
 

May 17, 2023*	Board Meeting—The Board completed redeliberations and directed the staff to draft a final Accounting Standards Update for vote by written ballot.
March 6, 2019	Board Meeting—The Board added the project to its technical agenda and discussed whether and how SEC disclosure requirements referred to the Board by the SEC should be included in the Codification.

The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.

Tiffany Wyszkowski
Project Manager
twyszkowski@fasb.org

Emma Little
Postgraduate Technical Assistant
elittle@fasb.org