Disclosure of Certain Loss Contingencies
Last updated on July 12, 2012. 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 the Last Meeting
*Summary of Decisions Reached to Date
*Board/Other Public Meeting Dates
The objective of this project is to enhance the disclosure requirements for loss contingencies under FASB Accounting Standards Codification™ Topic 450.
Due Process Documents
The Board issued an Exposure Draft of a proposed Accounting Standards Update, Contingencies (Topic 450): Disclosure of Certain Loss Contingencies, on July 20, 2010. The comment period has been extended to September 20, 2010.
- Download the FASB Exposure Draft—July 2010
- Read the press release announcing the extension of the comment period to September 20, 2010.
- Listen to a brief podcast recording of FASB Board Member Tom Linsmeier and FASB Practice Fellow Bill Hildebrand discussing the proposals contained in the Exposure Draft.
- Read the FASB In Focus, which provides a summary of the proposals contained in the Exposure Draft.
- Comment Letters—on July 2010 Exposure Draft
- Comment Letter Summary—on July 2010 Exposure Draft
The Board issued an Exposure Draft, Disclosure of Certain Loss Contingencies, on June 5, 2008. The comment period ended on August 8, 2008.
Exposure Draft—June 2008
Comment Letters—on June 2008 Exposure DraftComment Letter Summary—on June 2008 Exposure Draft
*Decisions Reached at the Last Meeting (July 9, 2012)The staff summarized its outreach with regulators as well as provided a short review of the feedback received on the two previous Exposure Drafts. The staff proposed the question to the Board whether the project should remain on the agenda and if so what the next steps should be. The Board voted 5-2 to remove the project from the agenda.
*Summary of Decisions Reached to DateOn July 9, 2012 the Board decided to remove the project from the Board’s technical agenda.
*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.
Below is a list of the FASB Board/Public meetings. Minutes for meetings generally are posted within two weeks following the meeting.
|*July 9, 2012||Board Meeting—Project removed from FASB agenda|
|November 10, 2010||Board Meeting—Plan for redeliberations|
|October 27, 2010||Board Meeting—Extension of effective date|
|August 18, 2010||Board Meeting—Extension of comment period|
|April 14, 2010||Board Meeting—Redeliberations: disclosure principles, threshold for disclosure, quantitative disclosures, tabular reconciliation, prejudicial exemption, possible insurance recoveries, qualitative disclosures, scope, reexposure, effective date, and transition|
|August 19, 2009||Board Meeting—Plan for redeliberations, effective date, disclosure objective, broad principles of disclosure, threshold for disclosure, quantitative disclosures, settlement negotiations, and possible recoveries|
|March 6, 2009||Roundtable Meeting:—Disclosure of Certain Loss Contingencies
|September 24, 2008||Board Meeting—Plan for Redeliberations|
|March 11, 2008||Board Meeting—Amended Disclosure Requirements|
|September 6, 2007||Board Meeting—Agenda Decision|
In March 1975, the Board issued FASB Statement No. 5, Accounting for Contingencies (codified as Topic 450), to address the accounting for contingencies. Since that time, Topic 450 has affected the accounting for many transactions that involve some component of uncertainty.At the September 6, 2007 Board meeting, the Board added a project to its agenda on the accounting for certain nonfinancial liabilities and contingencies, including loss contingencies under Subtopic 450-20. Originally, the Board decided to conduct this project in two phases: a short-term phase to amend and enhance the disclosure requirements for loss contingencies under Section 450-20-50 and a long-term phase to comprehensively reconsider the recognition and measurement guidance for certain nonfinancial liabilities. However, on June 11, 2008, the long-term phase of this project was removed from the Board's agenda because the Board plans to consider at a future date whether to address that accounting in a joint project with the IASB.
The project now focuses exclusively on loss contingency disclosures. The project was undertaken to address constituents' concerns that the disclosures about certain loss contingencies under existing guidance do not provide sufficient information in a timely manner to assist users in assessing the likelihood, timing, and amounts of cash flows associated with loss contingencies. To address these concerns, the Board issued an Exposure Draft, Disclosure of Certain Loss Contingencies, on June 5, 2008, and an Exposure Draft of a proposed Accounting Standards Update, Contingencies (Topic 450): Disclosure of Certain Loss Contingencies, on July 20, 2010. The proposed Accounting Standards Update would expand the disclosures about certain loss contingencies by replacing the disclosure requirements of Section 450-20-50 for those loss contingencies with the new, enhanced disclosure requirements in the proposed Accounting Standards Update.
Contact InformationChristopher Roberge