Last updated on November 8, 2013. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
*Due Process Documents
*Decisions Reached at Last Meeting
Summary of Decisions Reached to Date
*Board/Other Public Meeting Dates
The Board received input indicating that the lack of guidance in U.S. GAAP and the varying interpretations of when and how going concern uncertainties should be disclosed under the auditing standards result in diversity in the timing, nature, and extent of existing footnote disclosures. The proposal is intended to provide preparers with guidance in U.S. GAAP on management’s responsibilities for evaluating and disclosing going concern uncertainties and, thereby, reduce existing diversity in footnote disclosures. In doing so, the Board believes that the proposal also would improve the timeliness and the quality of footnote disclosures about going concern uncertainties.
*Due Process Documents
On June 26, 2013, the FASB issued a proposed Accounting Standards Update, Presentation of Financial Statements (Topic 205): Disclosure of Uncertainties about an Entity’s Going Concern Presumption. The comment period ended on September 24, 2013.
- Download the revised Exposure Draft.
- Read the press release introducing the proposed Update.
- Read the FASB In Focus, which provide summaries of the proposals contained in the revised proposals.
- Read the comment letters on the proposed Accounting Standards Update.
- Read the comment letter summary on the proposed Accounting Standards Update
On October 9, 2008, the Board issued an Exposure Draft, Going Concern, for a 60-day comment period. The comment period ended on December 8, 2008.
*Decisions Reached at Last Meeting (November 6, 2013)The Board discussed a summary of the feedback received through comments letters on the Proposed Accounting Standards Update, Presentation of Financial Statements (Topic 205): Disclosure of Uncertainties about an Entity’s Going Concern Presumption. The summary is available on the Going Concern project page of the FASB website.
The Board decided to continue with the project and discussed a plan for redeliberation, which will include following issues for the Board to either redeliberate or reaffirm:
- Initial disclosure threshold including information to be assessed
- Consideration of management’s plans outside the ordinary course of business
- Disclosure content
- 24-month assessment period
- Substantial doubt threshold
- Applicability of substantial doubt to non-SEC filers.
The Board directed the staff to continue performing outreach with various stakeholders about the issues for redeliberations. The Board expects to begin redeliberations in January 2014.
Summary of Decisions Reached to Date (As of November 6, 2013)
See proposed Update.
The Board plans to consider all feedback and begin redeliberations of all significant issues in the first quarter 2014. In addition, during this time the Board will undertake various outreach to discuss the proposal with a wide range of interested parties. Please see the Current Technical Plan for more information about the projected timeline.
*Board/Other Public Meeting Dates
The Board meeting minutes 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 become final only after a formal written ballot to issue a final standard.
The following are links to the minutes for each meeting.
|*November 6, 2013||Board Meeting—Comment Letter Discussion|
|January 31, 2013||Board Meeting—Project Scope and Objective|
|November 7, 20121||Board Meeting—Project Scope and Objective|
|May 2, 2012||Board Meeting—Liquidation Basis of Accounting and Project Objective|
|February 15, 2012||Board Meeting—Liquidation Basis of Accounting|
|January 11, 2012||Board Meeting—Project Scope and Objective|
|October 26, 2011||Board Meeting—Project Scope and Objectives|
|December 1, 2010||Board Meeting—Subsequent Events and Limited Life Entities|
|November 10, 2010||Board Meeting—Issues Raised by External Reviewers|
|March 31, 2010||Board Meeting—Disclosure Threshold and Liquidation Basis|
|January 13, 2010||Board Meeting—Project Scope|
|June 3, 2009||Board Meeting—Analysis of Additional Constituent Outreach|
|February 18, 2009||Board Meeting—Comment Letter Discussion|
|August 27, 2008||Board Meeting—Codification Discussion|
|September 19, 2007||Board Meeting—Removal from Board agenda|
|May 30, 2007||Board Meeting—Add Project to Board agenda|
1Note: Starting with the November 7, 2012 Board Meeting, this table will only list public meetings related to Going Concern.
The Board originally undertook this project to incorporate in U.S. GAAP certain accounting and reporting guidance that originated as auditing standards. In October 2008, the Board issued an Exposure Draft, Going Concern, which would have provided entities with guidance on the preparation of financial statements as a going concern and on management’s responsibility to evaluate uncertainties about an entity’s ability to continue as a going concern. The 2008 Exposure Draft would have required disclosures either when financial statements were not prepared on a going concern basis or when there was substantial doubt about an entity’s ability to continue as a going concern. The 2008 Exposure Draft would have carried forward the going concern guidance from the auditing literature subject to several modifications to align the guidance with IFRS.
The respondents to the 2008 Exposure Draft indicated that certain terminology and thresholds utilized in the proposed guidance needed to be further clarified, such as going concern and substantial doubt. Respondents also expressed other concerns about the proposal, including potential complexities on the indefinite nature of the proposed time horizon and the proposed guidance on evaluating all available information about the future. Furthermore, respondents highlighted the apparent omission of the disclosures contained in the auditing literature when an auditor’s initial substantial doubt concern is alleviated because of management’s plans.
Several respondents indicated that there was a need for guidance about when and how to prepare financial statements using the liquidation basis of accounting. The Board decided to address the liquidation basis of accounting as part of a separate project. The Board issued Accounting Standards Update No. 2013-07, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting, in April 2013.
Since the issuance of the 2008 Exposure Draft, the Board has reassessed the objective of the going concern project at different times in response to feedback and developments in other projects, including the project on the liquidation basis of accounting and the project on liquidity and interest rate risk disclosures. In 2010, the Board modified the objective of the going concern project to propose earlier disclosures about going concern uncertainties. The resulting staff draft was not exposed to the public but was reviewed by a group of users, regulators, and auditors who indicated that the revised guidance may not be operable. In 2011, the Board considered but later rejected incorporating going concern uncertainty disclosures in the separate project about liquidity and interest rate risk disclosures. In May 2012, the Board decided to proceed with the project on going concern with the objective of providing an entity and its management with guidance on assessing uncertainties about an entity’s going concern presumption and related disclosures.
Contact InformationDaghan Or
Libby Van Wagenen
Postgraduate Technical Assistant