Project Updates
Disclosure of Certain Loss Contingencies
Last Updated: May 28, 2009 (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
Due Process Documents
Decisions Reached at the Last Meeting
*Next Steps
*Board/Other Public Meeting Dates
Background Information
Contact Information
Project Objective
The objective of this project is to enhance the disclosure requirements for loss contingencies under FASB Statement No. 5, Accounting for Contingencies.
Due Process Documents
The Board issued an Exposure Draft, Disclosure of Certain Loss Contingencies, on June 5, 2008. The comment period ended on August 8, 2008.
Decisions Reached at the Last Meeting
On September 24, 2008, the Board decided on a plan for redeliberations of its Exposure Draft, Disclosure of Certain Loss Contingencies. The Board directed the staff to prepare an alternative model that will attempt to address the concerns that certain constituents raised about the Exposure Draft. This alternative model will be field tested along with the model in the Exposure Draft. The Board also decided that any final Statement on this topic will be effective no sooner than for fiscal years ending after December 15, 2009.
*Next Steps
The Board will begin redeliberation of disclosure of certain loss contingencies in the second quarter of 2009. The proposed Statement would be effective no sooner than for fiscal years ending after December 15, 2009.
*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 Statement, Interpretation, FSP, or Statement 133 Implementation Issue.
Below is a list of the FASB Board/Public meetings. Minutes for meetings generally are posted within two weeks following the meeting.
| *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 |
Background Information
In March 1975, the Board issued Statement 5 to address the accounting for contingencies. Since that time, Statement 5 has affected the accounting for many transactions that involve some component of uncertainty.
At the September 6, 2007 meeting, the Board added a project to its agenda on the accounting for certain nonfinancial liabilities and contingencies, including contingencies under Statement 5. Originally, the Board decided to conduct this project in two phases: a short-term phase to amend and enhance the disclosure requirements for Statement 5 loss contingencies 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. The proposed Statement would expand the disclosures about certain loss contingencies by replacing the disclosure requirements of Statement 5 for those loss contingencies with the new, enhanced disclosure requirements in the proposed Statement.
Contact Information
David Elsbree
Practice Fellow
dbelsbree@fasb.org