NEWS RELEASE 05/15/13
FASB SEEKS INPUT ON REVISING U.S. GAAP FINANCIAL REPORTING TAXONOMY CALCULATION HIERARCHY
Norwalk, CT, May 15, 2013—The Financial Accounting Standards Board (FASB) today issued an Invitation to Comment on proposed structural changes to the U.S. GAAP Taxonomy. FASB U.S. GAAP Financial Reporting Taxonomy (UGT): A Proposal to Revise the UGT Calculation Hierarchy sets forth a new calculation hierarchy intended to improve the Taxonomy’s usefulness to preparers and users of financial statements issued by U.S. publicly traded companies.
The Taxonomy contains calculation hierarchies that demonstrate the mathematical relationship between various elements of the Taxonomy. It indicates which elements are totals and which elements are added together to compose a total. Currently, the Taxonomy provides a calculation hierarchy―or summation―for every statement or disclosure presentation with summation relationships, regardless of any overlap.
As proposed, the revised hierarchy would eliminate inconsistencies created by these multiple calculation hierarchies, making it more functional for users and easier to navigate for preparers. For example, the 2013 Taxonomy release includes 19 summations for revenues, several of which are inconsistent. The revised hierarchy would reduce the number of summations to three.
The Taxonomy is a list of computer-readable financial reporting labels coded in a special computer language―eXtensible Business Reporting Language, or XBRL―that enables companies to tag thousands of pieces of financial data (elements) that are included in typical long-form financial statements and related footnote disclosures. The tags allow computers to automatically search for, assemble, and process data so it can be readily accessed and analyzed by investors, analysts, journalists, and regulators.
Stakeholders are encouraged to review and provide input on the Invitation to Comment by July 14, 2013. The Invitation to Comment is available at www.fasb.org. Depending on the feedback received, the FASB anticipates a final revised version to be released as early as the 2014 U.S. GAAP Taxonomy Release.
About the Financial Accounting Foundation
The FAF is responsible for the oversight, administration, and finances of both the Financial Accounting Standards Board and its counterpart for state and local government, the Governmental Accounting Standards Board. The FAF also is responsible for selecting the members of both Boards and their respective Advisory Councils.
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 on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.