Summary of Board Decisions

Summary of Board decisions 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 are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue an Accounting Standards Update.

July 25, 2013 FASB Board Meeting

Disclosure Framework: Board’s Decision Process. The Board discussed the role of notes in financial reporting, disclosure requirements that overlap with SEC (or other securities regulators) requirements, and disclosure requirements that overlap with requirements outside the financial report.

The Board made the following decisions:

  1. The Board’s decision process would include the following short, very high-level summary of the purpose of notes to financial statements, the types of information that should be included in notes, and the types of information reporting entities should not be required to include in notes:

    Consistent with the objective of financial reporting in general, the purpose of notes to financial statements is to supplement or further explain the information on the face of the financial statements by providing information relevant to existing and potential investors, lenders, and other creditors about the following matters:
    1. The reporting entity and its activities
    2. Financial statement line items
    3. Past events and existing conditions that have not met the criteria for recognition in the entity’s financial statements but that are capable of making a difference in decisions about providing resources.
    Reporting entities should not be required to include the following even if relevant to existing and potential investors, lenders, and other creditors:
    1. Assumptions and expectations about future events unless they are inputs to measurements made by management for purposes of presentation on the face of the financial statements or disclosure in notes
    2. Information about matters that are common knowledge or readily available from other sources on a timely basis and without significant cost or difficulty and not specific to the entity and its financial statements, for example, general economic conditions.
  2. The Board’s decision process would state that the Board could require disclosure in the notes, even if that information is required elsewhere in the report or outside of the report by a securities regulator or other regulator, if including the information in the notes:
    1. Represents an improvement in financial reporting, and
    2. The benefits of providing the information outweigh the costs.