Disclosure Framework—Board's Decision Process
Last updated on July 26, 2017. 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.
Project Objective and Overview
Due Process Documents
*Decisions Reached at Last Meeting
*Tentative Board Decisions Reached to Date
*Board/Other Public Meeting Dates
Resource Group and Other Outreach
Project Objective and OverviewThe objective and primary focus of the Disclosure Framework project is to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements. (Although reducing the volume of the notes to financial statements is not the primary focus, the Board hopes that a sharper focus on important information will result in reduced volume in most cases.)
The objective of improving effectiveness will require development of a framework that promotes consistent decisions about disclosure requirements by the Board and the appropriate exercise of discretion by reporting entities. To achieve this objective, the Disclosure Framework project comprises two components: the Board’s Decision Process and the Entity’s Decision Process.
The Board’s Decision Process is intended to aid the FASB in identifying disclosures to be considered when setting disclosure requirements for individual accounting standards and evaluating existing disclosures requirement. A disclosure that may be considered by the FASB will not automatically be required. This process involves the FASB and its staff continuing to evaluate the costs, negative consequences, and benefits associated with each potential disclosure at the standard level.
Currently, four disclosure areas are being evaluated as part of the Disclosure Framework project. Each review will include (1) evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s Decision Process and (2) promotion of the appropriate use of discretion by entities specifically within the Topic. The Board’s decision process and the entity’s decision process are being used in conjunction to modify the disclosure sections in the following Topics:
- Fair Value Measurement (Section 820-10-50)
- Defined Benefit Plans (Section 715-20-50)
- Income Taxes (Section 740-10-50)
- Inventory (Section 330-10-50)
The FASB staff has developed a “Q&A: FASB’s Disclosure Framework Project” fact sheet, which can be viewed here.
Due Process DocumentsOn March 4, 2014, the FASB issued the proposed Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8 Notes to Financial Statements. The due date for comment letters was July 14, 2014.
- Download the proposed Concepts Statement, Conceptual Framework for Financial Reporting: Chapter 8 Notes to Financial Statements
- Download the comment letters on the proposed Concepts Statement
- Download the comment letter summary on the proposed Concepts Statement
- Read the press release on the proposed Chapter of the Conceptual Framework
- Read the FASB In Focus which summarizes the proposed Chapter of the Conceptual Framework
On July 12, 2012, the Board issued an Invitation to Comment, Disclosure Framework. The original due date for comment letters was set for November 16, 2012 but due to Hurricane Sandy the comment period was extended two weeks to November 30, 2012.
- Download the Invitation to Comment, Disclosure Framework
- Read the comment letters on the Invitation to Comment
- Read the comment letter summary on the Invitation to Comment
- Read the news release introducing the Invitation to Comment
- Read the FASB In Focus, which summarizes the Invitation to Comment
- Listen now or Download In Focus: The FASB Disclosure Framework Project Webcast
*Decisions Reached at Last Meeting (July 19, 2017)The Board discussed issues related to the proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements.
The Board decided the following:
- To retain not-for-profit entities and private companies in the scope of the Concepts Statement on notes to financial statements.
- To include a discussion about the potential negative consequences of disclosures in the Concepts Statement.
- To reaffirm that the Concepts Statement would have the Board consider disclosure of changes in line items that are not easily understood because the causes of changes in those line items are numerous or because the line items are subject to nonroutine changes.
- To reaffirm that the Concepts Statement would have the Board consider disclosure of alternative measures that are clearly useful in assessing prospects for future cash flows.
*Tentative Board Decisions Reached to Date (as of July 19, 2017)Tentative Board Decisions to Date
*Next StepsThe Board directed the staff to perform research on:
- How the Concepts Statement would change if employee benefit plans were included within its scope
- Other examples of disclosures that provide information about how a line item is affected by general economic conditions, market factors, or entity-specific or sector-specific factors.
- The three types of future-oriented information that could be appropriate for the notes to financial statements
- The cost-constraint discussion in the proposed Concepts Statement
- Whether other concepts should be included in the Concepts Statement
- Information about past events and current conditions and circumstances that are not recognized
- Information about the reporting entity
- Interim reporting concepts.
*Board/Other Public Meeting DatesThe 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.
|*July 19, 2017||Board Meeting—Materiality|
|February 18, 2015||Board Meeting—Board’s Decision Process|
|November 19, 2014||Board Meeting—Materiality|
|September 10, 2014||Board Meeting—Comment Letter Summary and Possible Next Steps|
|November 6, 2013||Board Meeting—Interim Reporting, Scope of the Board’s Decision Process, and Permission to Ballot|
|October 9, 2013||Board Meeting—Additions and other Changes to the Board’s Decision Process and Interim Reporting|
|August 7, 2013||Board Meeting—The Needs of Providers of Resources to Not-for-Profit Entities and Line Items Decision Questions|
|July 25, 2013||Board Meeting—Role of the Notes, and SEC Disclosure Overlap within the Financial Report, and Other Regulatory Disclosure Overlap outside the Financial Report|
|June 19, 2013||Board Meeting—Forward-Looking Disclosure Information, Decision Questions, and Changes to the Technical Plan|
|February 13, 2013||Board Meeting—Comment Letter Summary and Analysis of Comments and Possible Next Steps|
|April 25, 2012||Board Meeting —Interim Disclosures and Cost Consequence|
|August 24, 2011||Board Meeting—Decision Process for Disclosures about Line Items|
|August 18, 2010||Board Meeting—Objectives, Principles, and Criteria for Use in Setting Standards for Required Disclosures of Financial Information|
July 8, 2009
Board Meeting—Agenda Announcement
Public OutreachOn December 1, 2014, the FASB held a forum to discuss financial disclosures at Pace University in New York City.
Read the media meeting recap from the forum discussion on financial disclosures
Download and listen to the audio replay of the forum
In 2012, the FASB, in conjunction with the Center for Audit Quality (CAQ), held two forums on disclosure effectiveness designed to encourage dialogue among a wide range of financial reporting stakeholders on improving the effectiveness of disclosures in notes to financial statements and other parts of the financial reporting package. The forums were held at Columbia University’s Center for Excellence in Accounting and Security Analysis in New York City on October 4, and at the Stanford University Graduate School of Business in Stanford, California, on October 8.
- Download the Summary of Observations from Two Forums on Disclosure Effectiveness
- Read the media advisory about the disclosure effectiveness forums
Resource GroupThe Board established a resource group to help identify key issues with existing disclosures and evaluate proposed solutions. The membership of that group includes academics, analysts, auditors, preparers, and regulators. The staff consults informally with members of the resource group as needed. The group met with Board members and staff on October 28, 2011. Future meetings will be scheduled if necessary.
Background InformationOn July 8, 2009, the FASB chairman announced (press release) the addition of a new agenda project aimed at establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant. The project was added in response to requests and recommendations received from several constituents, including the Investors Technical Advisory Committee (ITAC) and the U.S. Securities and Exchange Commission’s (SEC) Advisory Committee on Improvements to Financial Reporting (Recommendations 1.2 and 1.3).
The staffs of the Board and the European Financial Reporting Advisory Group (EFRAG) have cooperated in the development of the ideas discussed in the 2012 Invitation to Comment and a similar discussion paper issued by EFRAG.
*Contact InformationNick Cappiello
Assistant Project Manager
Postgraduate Technical Assistant
Postgraduate Technical Assistant