Project Update

Disclosure Framework—Disclosure Review: Inventory

Last updated on May 25, 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
*Next Steps
Board/Other Public Meeting Dates
Contact Information

Project Objective and Overview

The 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. Achieving 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 that objective, the Disclosure Framework project comprises two components: the Board’s Decision Process and the Entity’s Decision Process.

The Board has decided to perform reviews of four areas that will incorporate both components of the Disclosure Framework project. Therefore, each review will include (1) an evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s decision process and (2) consideration of ways to promote the appropriate use of discretion specifically within the Topic.

This page provides updates on the disclosure review of inventory (Section 330-10-50). For information on the other three disclosure reviews, see the following:
  1. Defined benefit plans (Section 715-20-50)
  2. Fair value measurement (Section 820-10-50)
  3. Income taxes (Section 740-10-50)
Additionally, disclosure requirements for interim reporting are being evaluated for modifications.

The FASB staff has developed a “Q&A: FASB’s Disclosure Framework Project” fact sheet, which can be viewed here.

Due Process Documents

On January 10, 2017, the Board issued a proposed Accounting Standards Update, Inventory (Topic 330): Disclosure Framework—Changes to the Disclosure Requirements for Inventory. The due date for comment letters was March 13, 2017.

Decisions Reached at Last Meeting (November 16, 2016)

The Board decided to require an entity that applies the retail inventory method to qualitatively and quantitatively disclose the critical assumptions used in their calculation of the cost of inventory under the retail inventory method. The Board also concluded that the expected benefits of all the forthcoming proposed amendments to Topic 330, Inventory, justify the perceived costs.

Tentative Board Decisions Reached to Date (As of November 16, 2016)

Tentative Board Decisions to Date

*Next Steps

The Board will consider feedback received on the proposed Accounting Standards Update at a future meeting.

Additionally, on June 6, 2017, the Board will meet with its Investor Advisory Committee to discuss the disclosure framework project. After that meeting, the staff will develop and present a plan for redeliberations.

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.

November 16, 2016 Board Meeting—Inventory Disclosures
September 19, 2016 Board Meeting—Inventory Disclosures
August 24, 2016 Board Meeting—Inventory Disclosures
July 27, 2016 Board Meeting—Inventory Disclosures
January 7, 2015 Board Meeting—Scope of Disclosure Review
April 4, 2014 Board Meeting—Field Study Results and Next Steps

Contact Information

Nick Cappiello
Project Manager

Halie Creps
Practice Fellow

Haoran Jiang
Postgraduate Technical Assistant

Mallory Bennett
Postgraduate Technical Assistant