FASB proposed new accounting standards designed to improve the effectiveness of disclosure requirements on fair value measurements by enabling preparers to omit immaterial information.
The board is seeking comments by Feb. 29 on Proposed Accounting Standards Update, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.
The proposed amendments are part of FASB's disclosure framework project, which seeks to improve the effectiveness of disclosures in the notes to financial statements by requiring clear communication of information that is most important to financial statement users.
Under the proposal:
- An entity would provide required disclosures if they are material.
- Phrases such as "an entity shall disclose at a minimum," which make it difficult to justify omitting immaterial disclosures, would be eliminated.
- Readers would be referred to Topic 235, Notes to Financial Statements, for discussion of the appropriate exercise of discretion. Topic 235 also is being amended under a proposal that would promote discretion by entities by providing an option to exclude immaterial information.
Comments can be made at fasb.org.