FASB issued two changes to the conceptual framework of FASB and two Accounting Standards Updates that improve the effectiveness of disclosures in notes to financial statements.
The following are the details of the issued updates:
- Added a new chapter in the Conceptual Framework on disclosures. The chapter explains what information the Board should consider including in notes to financial statements by describing the purpose of notes, the nature of appropriate content, and general limitations. It also addresses the Board’s considerations specific to interim reporting disclosure requirements.
- An update to an existing chapter of the Conceptual Framework for its definition of materiality. The amendment aligns the FASB definition of materiality with other definitions in the financial reporting system. The materiality concepts will now be consistent with the definition of materiality used by the U.S. SEC, the auditing standards of the Public Company Accounting Oversight Board and the American Institute of Certified Public Accountants, and the United States judicial system.
- An Accounting Standards Update on Fair Value Measurement disclosure requirements. The standard improves the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The amendments are effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted.
- An Accounting Standards Update on Defined Benefit Plan disclosure requirements. The standard improves disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments are effective for fiscal years ending after December 15, 2020, for public companies, and for fiscal years ending after December 15, 2021, for all other organizations. Early adoption is permitted.
- News Release
- Chapter 8 of Conceptual Framework (PDF)
- Amendments to Chapter 3 of Framework (PDF)
- Update on Fair Value Measurement (PDF)
- Update on Defined Benefit Disclosures (PDF)
- Overview of Conceptual Framework
Keywords: Americas, US, Accounting, Banking, Insurance, Accounting Standards Update, Disclosures, Conceptual Framework, Fair Value Measurement, Defined Benefit, FASB
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