FASB proposal would modify provisional disclosure requirements

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The rules relating to interim information in financial statements would be amended and clarified as part of a proposal published Monday by the FASB.

As part of the FASB’s draft disclosure framework to improve the effectiveness of disclosures in financial statements, the proposal released on Monday:

  • Add a requirement that the SEC removed in 2018 from SX regulations that requires disclosure at interim periods when a material event or transaction has occurred since the end of the previous fiscal year and has a material effect on an entity . The proposed changes would add a new principle, based on the deleted part of the SX Regulation, which would apply to all entities that provide interim financial statements and notes in accordance with GAAP. The proposal also specifies that the resulting information may be specific to a transaction or to an event.
  • Clarify that the following three forms of financial statements and notes comply with GAAP:
    • Financial statements prepared with the same level of detail as previous annual statements, subject to all presentation and disclosure requirements of GAAP.
    • Financial statements prepared with the same level of detail as previous annual statements, subject to all presentation requirements of GAAP and limited notes subject to the disclosure requirements of FASB Accounting Standards Codification Topic 270, Interim Report.
    • Condensed financial statements and limited notes subject to subject disclosure requirements 270.
  • Respond to comments from stakeholders who requested that interim reporting requirements be clarified and consolidated into a single topic in the codification.
  • Include modifications to clarify when comparative information is required.

The proposal would update topic 270 and would apply to all entities that provide financial statements and notes in accordance with GAAP. Comments can be submitted until January 31, 2022, on the FASB website.

Ken tysiac ([email protected]) is the JofAeditorial director of.


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