Project Update

Conceptual Framework—Presentation

Project Information Page

Last updated on June 6, 2016. 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. Please refer to the main Conceptual Framework project page for additional information related to the project.

*Decisions Reached at the Last Board Meeting
*Tentative Board Decisions Reached to Date
*Board/Other Public Meeting Dates
*Next Steps
Contact Information

*Decisions Reached at the Last Meeting (June 1, 2016)

The Board continued its deliberations on the proposed chapter on presentation. The Board decided:
  1. To focus on information about assets, liabilities, equity, revenues, expenses, gains, and losses rather than requiring specific financial statements.
  2. That in grouping recognized items into line items, to consider the form of settlement of a liability or realization of an asset.
  3. To incorporate some of the discussion of central, peripheral, operating, and nonoperating in FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements of Business Enterprises, into the proposed chapter.
  4. To emphasize that the Conceptual Framework is a nonauthoritative tool for the Board’s use in its standard-setting activities.
The Board directed the staff to draft a proposed Concepts Statement for vote by written ballot with a 90-day comment period. The Board also decided to issue the proposed chapter on presentation separate from the proposed chapter on measurement. The Board plans to include a question in the proposed Concepts Statement about whether particular aspects of the Board’s decisions could be used in determining whether specific characteristics of a single contract should be presented separately or whether specific characteristics of multiple recognized items should be grouped together for presentation purposes.

*Tentative Board Decisions Reached to Date

June 18, 2014

The Board decided that the following two presentation concepts should be further developed:
  1. Information should be grouped into reasonably homogeneous groups. Line items or subtotals that include items that have similar characteristics in more than one respect are likely to provide more information about prospects for future cash flows than if their characteristics were dissimilar.
  2. The association between changes in assets, liabilities, and equity instruments and the assets, liabilities, and equity instruments that changed should be made apparent in the financial statements (or in the financial statements and notes).
November 24, 2014

The Board discussed factors (for example, characteristics of an item and activity from which the recognized item results) to help it establish standards for aggregating individual assets, liabilities, equity, revenues, expenses, gains, and losses into line items in the financial statements. The Board decided that the factors recommended by the staff were appropriate but pointed out that not all of the factors can be applied in each set of financial statements because that would require more line items than can reasonably be presented. Consequently, the Board directed the staff to consider how to weigh the factors in various circumstances and how practical considerations (such as space limitation and cost) should affect the Board’s presentation decisions.

December 16, 2014

The Board decided that line items should be the primary focus in developing standards for presentation in financial statements. The Board also decided that the activity from which (or within which) the recognized item resulted is the primary factor for identifying useful subtotals in an income statement, and that the timing of realization or settlement is the primary factor in identifying useful subtotals on the balance sheet.

The Board decided to postpone discussions about other comprehensive income in the conceptual framework project until it has further discussions regarding its project on financial performance reporting.

July 29, 2015

The Board decided on the following:
  1. Not to amend the definitions of revenues, expenses, gains, and losses in this phase of the project
  2. To acknowledge in the proposed Chapter on presentation in FASB Concepts Statement No. 8,Conceptual Framework for Financial Reporting, that (a) existing standards require or permit classifying some items of comprehensive income in other comprehensive income and later reclassifying them into net income and (b) there is no conceptual basis for determining which items qualify for that treatment.
  3. To clarify that FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements of Business Enterprises, does not preclude allocating cash receipts between categories in the cash flow statement based on estimates.

*BOARD/OTHER PUBLIC MEETING Dates

The FASB meeting minutes are provided for the information and convenience of constituents who want to follow the Boards’ 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 Accounting Standards Update.

*June 1, 2016   Board Meeting—The Board discussed several issues including whether to require specific financial statements, whether to consider the form of settlement of a liability or an asset when grouping recognized items into line items, whether to incorporate discussion of central, peripheral, operating, and nonoperating in the proposed chapter, and whether to emphasize the Conceptual Framework as a nonauthoritative tool for the Board’s use in its standard-setting activities. The Board directed the staff to draft a proposed Concepts Statement for vote by written ballot with a 90-day comment period. The Board also decided to issue the proposed chapter on presentation separate from the proposed chapter on measurement, and discussed including a question in the proposed Concepts Statement about whether particular aspects of the Board’s decisions could be used in determining whether specific characteristics of multiple recognized items should be grouped together for presentation purposes.
July 29, 2015 Board Meeting—The Board discussed several issues including whether to present the effects of sales transactions on comprehensive income gross or net, which components of comprehensive income to recognize in other comprehensive income and when, if ever, to recycle them to net income, and whether Concepts Statement 5 precludes allocating cash receipts between categories in the cash flow statement based on estimates.
December 16, 2014 Board Meeting—The Board discussed the development of principles for subtotals. The Board also discussed the development of concepts for other comprehensive income.
November 24, 2014 Board Meeting—The Board discussed factors for aggregating individual assets, liabilities, equity, revenues, expenses, gains, and losses into line items in the financial statements.
June 18, 2014 Board Meeting—The Board discussed how to proceed with the conceptual framework project

Please refer to the measurement and disclosure project pages for current Board meeting minutes related to each of those topics within the broader Conceptual Framework project.

*Next Steps

The staff will draft a proposed Concepts Statement for vote by written ballot.

CONTACT INFORMATION

Jill Switter
Senior Project Manager
jmswitter@fasb.org

Jim Leisenring
Senior Advisor
jjleisenring@fasb.org

Ryan J. Carter
Assistant Project Manager
rjcarter@fasb.org

Melissa Rutzen
Postgraduate Technical Assistant
marutzen@fasb.org