The Financial Accounting Standards Board has postponed the loss contingency standard indefinitely after receiving a barrage of critical comment letters.
FASB originally proposed new standards for companies to disclose the contingencies they had made for losses such as from litigation back in 2008. More recently, the board proposed new rules that would finally go into effect for fiscal years ending after Dec. 15, 2010, but over the summer it extended the comment period for a month until Sept. 20. FASB received 347 comment letters, including protests from a variety of sources, such as the American Bar Association and the U.S. Chamber of Commerce, according to the National Law Journal.
The board decided last week that a final standard will not be effective for the 2010 calendar year-end reporting period. FASB said it will decide on an effective date at a future meeting, after it has substantially concluded its redeliberations.
When in doubt, just delay.