Market Overview

FASB Improves the Effectiveness of Disclosures in Notes to Financial Statements


The Financial Accounting Standards Board (FASB)
today issued two changes to the FASB's
conceptual framework
and two Accounting Standards Updates (ASUs)
that improve the effectiveness of disclosures in notes to financial

"The two changes to our Conceptual Framework will help the Board
identify and evaluate disclosure requirements in accounting standards
and clarify the concept of materiality," said FASB Chairman Russell
G. Golden
. "Meanwhile, the new standards improve fair value and
defined benefit disclosure requirements by removing disclosures that are
not cost beneficial, clarifying disclosures' specific requirements, and
adding relevant disclosure requirements."

A new chapter in the Conceptual Framework on disclosures.
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

An update to an existing chapter of the Conceptual Framework for its
definition of materiality
The amendment
aligns the FASB's 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.
Securities and Exchange Commission, 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 ASU on Fair Value Measurement disclosure requirements.
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 ASU on Defined Benefit Plan disclosure requirements.
The standard
improves disclosure requirements for employers that sponsor defined
benefit pension or other postretirement 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.

More information about the Conceptual Framework changes and the ASUs can
be found at

About the Financial Accounting Standards Board
in 1973, the FASB is the independent, private-sector organization, based
in Norwalk, Connecticut, that establishes financial accounting and
reporting standards for public and private companies and not-for-profit
organizations that follow Generally Accepted Accounting Principles
(GAAP). The FASB is recognized by the Securities and Exchange Commission
as the designated accounting standard setter for public companies. FASB
standards are recognized as authoritative by many other organizations,
including state Boards of Accountancy and the American Institute of CPAs
(AICPA). The FASB develops and issues financial accounting standards
through a transparent and inclusive process intended to promote
financial reporting that provides useful information to investors and
others who use financial reports. The Financial Accounting Foundation
(FAF) supports and oversees the FASB. For more information, visit

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