FASB Issues Two Agenda Proposals for Comment— Financial Performance Reporting and Disclosure About Intangible Assets

Norwalk, CT, August 21, 2001—The Financial Accounting Standards Board (FASB) has distributed proposals that explore the possible addition of two major projects to its agenda: reporting of financial performance measurements and disclosure about intangible assets. Both proposed projects intend to expand the information available to investors, creditors and other financial statement users. The Board seeks comments from constituents by September 19, 2001, on support for these projects and their proposed scope. The proposals are available on this website.

The first proposal discusses a project that focuses on form and content, classification and aggregation, and display of specified items in interim and annual financial statements. Through this proposed project, the Board seeks to address significant financial reporting concerns raised by constituents, including the proliferation of pro forma earnings measures, the lack of a common definition of financial performance, and the need for a better understanding of the use of key financial measures and ratios derived from financial statements.

The second proposal seeks to establish standards for improving disclosure of information about intangible assets that are not presently recognized as assets in financial statements. Intangible assets include brand names, customer lists and patent rights. Today, intangible assets that are generated internally, and some acquired assets that are written off immediately after acquisition, are not reflected in financial statements. Generally, there is very little information—quantitative or qualitative—about intangibles in financial reports. The proposed project would expand the scope of that information.

In determining new agenda items, the Board takes into consideration requests from constituents to add projects as well as to augment or narrow their scopes. As part of its overall agenda-setting process, the Board considers various factors, including pervasiveness of the issue, alternative solutions, technical feasibility, practical consequences and the opportunity for convergence of international standards.

About the Financial Accounting Standards Board


Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely heavily on credible, transparent, and comparable financial information. Additional information about the FASB is available at this website.

The Financial Accounting Standards Board . . .

Serving the investing public through transparent information resulting from high-quality financial reporting standards, developed in an independent, private sector, open due process.