FASB lays foundation for standards on future cash flow

A proposal would guide the board's decisions.

A new FASB proposal would establish a set of concepts for how recognized items should be presented in a financial statement.

The exposure draft issued by FASB is meant to provide a foundation for the board as it creates future accounting standards, with a goal of enhancing financial statement users' ability to assess prospects for future cash flows by addressing how to:

  • Group individual recognized items into line items and subtotals.
  • Clarify the relationships among assets, liabilities, and equity, and the effects of related changes of those assets and liabilities on comprehensive income and cash flows.

The proposal, Concepts Statement 8, Conceptual Framework for Financial Reporting: Chapter 7: Presentation, is part of FASB's larger project to create a new conceptual framework, which also would address concepts related to measurement and disclosure.

"The conceptual framework is the foundation for resolving accounting and reporting questions," FASB Chairman Russell Golden said in a news release. "These proposals are intended to provide direction, structure, and a basis for consistent board conclusions when making standard-setting decisions related to presentation."

Comments will be accepted through Nov. 9 at FASB's website.

SPONSORED REPORT

2019 State of Financial Reporting Survey

We surveyed nearly 600 finance and accounting professionals on their month-end close and reporting processes. See the results.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.