FASB decided Wednesday that it will not require qualitative disclosures about an entity’s ability to remain a going concern that would supplement the proposed quantitative disclosures about liquidity risks, according to a summary of board decisions posted on its website.
Earlier in the week, FASB also issued proposals on three EITF issues.
The basis for Wednesday’s decision was the belief that meeting users’ needs for additional information regarding an entity’s ability to remain a going concern would require a collaborative effort of FASB and other organizations that would be willing and able to provide the most effective solution.
FASB directed the staff to draft a Proposed Accounting Standards Update (ASU) on disclosures about liquidity risk and interest rate risk for vote by written ballot. The board decided that the exposure draft will have a 90-day comment period, will not propose an effective date, and will ask respondents to describe how much time they would need to implement the proposed amendments.
The board will propose that entities apply the new requirements prospectively with ongoing comparative disclosures after the period of initial adoption.
—Ken Tysiac (firstname.lastname@example.org) is a JofA senior editor.
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