Disclosure Framework—Entity’s Decision Process
FASB CONCEPTS STATEMENT NO. 8, CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING—CHAPTER 3, QUALITATIVE CHARACTERISTICS OF USEFUL FINANCIAL INFORMATION
On August 28, 2018, the FASB issued amendments to FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting—Chapter 3, Qualitative Characteristics of Useful Financial Information. The amendments align the FASB’s definition of materiality with definitions and discussions of the U.S. Securities and Exchange Commission (SEC), auditing standards of both the Public Company Accounting Oversight Board (PCAOB) and the American Institute of Certified Public Accountants (AICPA), and the judicial system in the United States.
The Disclosure Framework Project
The disclosure framework project’s objective and primary focus are to improve the effectiveness of disclosures in notes to financial statements by facilitating clear communication of the information required by generally accepted accounting principles (GAAP) that is most important to users of each entity’s financial statements. The project sought to achieve that objective by:
- Developing a framework that promotes consistent decisions by the Board about disclosure requirements. This was addressed by the Board’s decision process component of the project.
- Promoting the appropriate exercise of discretion by reporting entities. This was addressed by the entity’s decision process component of the project.
- Download the FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting—Chapter 1, The Objective of General Purpose Financial Reporting, and Chapter 3, Qualitative Characteristics of Useful Financial Information
- Read the Press Release on the issuance of the four Disclosure Framework documents
- Read the FASB in Focus on Chapter 8, Notes to Financial Statements