Disclosure Framework: Disclosure Review—Inventory


The disclosure framework project’s objective and primary focus was 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.


On March 4, 2014, the Board issued a proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, which the Board finalized on August 28, 2018. Chapter 8 of Concepts Statement 8 identifies a broad range of possible information for the Board’s consideration when deciding on the disclosure requirements for a particular FASB Accounting Standards Codification® Topic. From that broad set, the Board will identify a narrower set of disclosures about that Topic to be required on the basis of, among other considerations, an evaluation of whether the expected benefits of entities providing the information justify the expected costs. Chapter 8 of Concepts Statement 8 is used by the Board as part of the process for establishing disclosure requirements in accounting standards as well as for evaluating existing disclosure requirements, if and when the Board considers those requirements.
Before Chapter 8 of Concepts Statement 8 was finalized, the Board decided to test the concepts in the proposed Chapter 8 and improve the effectiveness of disclosure requirements in the following Topics:
  1. Fair Value Measurement (Section 820-10-50)
  2. Compensation—Retirement Benefits (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.

Final Project Update:

In July 2021, the Board discussed whether to begin redeliberations on the amendments in proposed Accounting Standards Update, Inventory (Topic 330): Disclosure Framework—Changes to the Disclosure Requirements for Inventory.

When considering the original objectives and primary focus of this project, specifically the objective of testing the proposed concepts in Chapter 8, which is now finalized, coupled with the lack of recent stakeholder feedback that would indicate that inventory disclosures is a high priority for consideration by the Board, the Board decided to remove this project from its technical agenda.