FASB makes decision on qualitative going-concern disclosures

BY KEN TYSIAC

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 ( ktysiac@aicpa.org ) is a JofA senior editor.

More from the JofA:

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

SPONSORED REPORT

Questions to ask before committing to the cloud

Cloud computing has its pros and cons. In this report, we answer common questions CPAs may have as they consider transitioning partially or fully to the cloud.

QUIZ

News quiz: IRS reopens an online service, but criticism endures

The IRS brings back the Get Transcript Online service, but the agency faces criticism for its handling of the aftermath of the event that led to the shutdown of the service. See how much you know about other recent news with this quiz.

CHECKLIST

Auditing risks in culture

Cultural flaws can seriously damage an organization. Here’s how internal auditors can reduce risks by embedding culture audits into existing audit programs.