Financial Performance Reporting
Last updated on February 1, 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 *)
This project update summarizes the project activities and decisions of the FASB (the Board). It was prepared by the staff and is for the information and convenience of the Board’s constituents. All decisions of the Board are tentative, may change at future Board meetings, and do not change current accounting and reporting requirements. Decisions of the Board become final only after extensive due process.
PROJECT OBJECTIVEThe primary objective of this research project is to evaluate ways to improve the relevance of information presented in the performance statement. The project will explore and evaluate improvements to the performance statement that would increase its understandability by presenting certain items that may affect the amount, timing, and uncertainty of an entity’s cash flows.
*DECISIONS REACHED AT LAST MEETING (January 20, 2016)
January 20, 2016, Board Meeting
The staff presented its research into the current practice of reporting functional and natural lines, or both, in the performance statement. The staff also presented its proposal for how the Board could consider disaggregating functional lines into certain natural components. No decisions were made. The Board directed the staff to evaluate and clarify the objective of the project in light of all of the staff’s research in the project for assessment at a future meeting.
*TENTATIVE BOARD DECISIONS REACHED TO DATE (AS OF February 1, 2016)July 24, 2015
The staff presented its research into different ways the Board could use the concept of a remeasurement as a way to distinguish between earnings components to provide additional disaggregation of the performance statement. No decisions were made. The Board directed the staff to research other methods for distinguishing between different earnings components for discussion at future meetings, including (1) displaying natural and/or functional lines and (2) better describing what can be grouped within a line item.
May 6, 2015
The staff updated the Board on its research into different ways the Board could potentially improve the transparency of infrequent transactions or events that have been recognized in the performance statement. The Board discussed whether frequency of occurrence was the best method for distinguishing certain items. The Board directed the staff to research other methods for discussion at future meetings, including (1) using the predictive value of earnings components, such as remeasurements, as a distinguishing characteristic, (2) improving the display of natural and functional classifications, and (3) improving presentation by better describing what can be grouped within a line item.
February 25, 2015
The staff provided an update on its research into different alternatives for describing and defining operating activities. The Board discussed whether defining operating activities and displaying a subtotal of the results from operating earnings would improve the relevance of information presented in the performance statement. The Board directed the staff to focus its research efforts on distinguishing between recurring and nonrecurring or infrequently occurring items for the next meeting, after which the Board will consider whether and how it would like to proceed with defining operating activities.
June 25, 2014
The primary objective of the research project is to evaluate ways the Board might improve the relevance of information presented in the performance statement and related changes resulting from this objective.
The project will focus on two areas: (1) determining an operating performance metric and (2) distinguishing between recurring and nonrecurring or infrequently occurring items within the performance statement.
In addition to these two areas, the project will consider potential related changes that may arise from (1) and (2) in the following respects:
- Additional disaggregation in the performance statement
- Transparency of remeasurements
- Related changes to segment reporting
- Linkages across the primary statements.
The staff will evaluate and clarify the objective of the project in light of all of the staff’s research in the project for assessment at a future meeting.
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.
|*January 20,2016||Board Meeting—Discussed research relating to the presentation and disaggregation of functional and natural information in the performance statement.|
|July 24, 2015||Board Meeting—Discussed research relating to different alternatives for identifying and defining a remeasurement.|
|May 6, 2015||Board Meeting—Discussed research relating to different alternatives for distinguishing between recurring and nonrecurring or infrequently occurring items.|
|February 25, 2015||Board Meeting—Discussed research relating to different alternatives for describing and defining operating activities.|
|June 25, 2014||Board Meeting—Discussed potential issues to be studied in the research project and whether to change the project name to better reflect its nature and scope.|
|January 29, 2014||Board Meeting—Added project to the research agenda.|
BACKGROUND INFORMATIONIn 2001, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) added to their respective agendas a project on performance reporting and conducted those projects independently of one another. In 2004, the Boards agreed that they should conduct the projects jointly. In July 2010, each of the Boards issued a Staff Draft of an Exposure Draft on Financial Statement Presentation. After conducting outreach on the Staff Draft, the Boards acknowledged that significant staff resources would be needed to continue with the project. In 2011, the Boards decided to focus on certain higher priority convergence projects and to return to the project when resources were available. A summary of the activities and decisions of the Financial Statement Presentation project can be found on the previous project page.
During the intervening period, U.S. stakeholders continued to express support for a project on financial statement presentation. At the January 29, 2014, agenda prioritization meeting, the FASB decided to add the project to its research agenda. At its first meeting on this research project in June 2014, the Board decided that it would carry forward certain aspects of the previous Financial Statement Presentation project within the research project. However, to clearly communicate the current areas of focus within the research efforts and to limit incorrect references to the previous Financial Statement Presentation project, the research project was renamed the Financial Performance Reporting project.
*CONTACT INFORMATIONLauren Mottley
Postgraduate Technical Assistant