The Financial Accounting Standards Board and the International Accounting Standards Board are revealing further details about their long-stalled plans for creating a Disclosure Framework to help accountants decide on which notes to include with financial statements.
In response to questions from various stakeholders, FASB said Thursday that its staff has created a Q&A fact sheet consisting of questions and answers that should help clarify the facts about FASB’s Disclosure Framework project (see Accounting Boards Work to Cut Disclosure Overload). The project is designed to lead to disclosures that clearly communicate the information that is the most important to users of financial statements for public and private companies, and not-for-profit organizations.
The fact sheet also provides more information on how the project comprises two components: FASB’s decision-making process and the entity’s decision-making process.
The fact sheet answers a number of questions, including:
• Is the primary goal of the disclosure framework project to reduce the volume of the notes to financial statements?
• Don’t existing disclosure requirements lead to unnecessary volume?
• Will the board’s decision process require preparers to disclose predictions and forecasts of future cash flows?
• Will disclosure overlap between U.S. GAAP, SEC rules, and other regulatory requirements be eliminated?
• Will the board’s decision process address interim reporting?
• How are investor concerns being taking into account in the project?
• How does the disclosure framework project relate to private companies?
IASB Disclosure Initiative
The International Accounting Standards also said Thursday that it has formed a new staff group to work on its own Disclosure Initiative. The IASB noted that it has been developing both short- and medium-term strategies to address concerns about how financial information is disclosed. The work gained momentum after the IASB’s public Discussion Forum on Disclosure, which was held in London in January of this year. In June, IASB chairman Hans Hoogervorst announced a 10-point plan as the first step in the initiative.
The IASB’s Disclosure Initiative brings together members of the IASB’s standard setting team with the eXtensible Business Reporting Language, or XBRL, team, and will be led by Kristy Robinson, an IASB technical principal.
The IASB noted that the creation of a combined team of standard setting and electronic reporting experts reflects the increasing importance of electronic filing of financial information. The integration of the XBRL team into the IASB’s work program will also complete a major aspect of the recent strategic review of XBRL by the International Financial Reporting Standards Foundation Trustees, who oversee the work of the IASB.
XBRL and IFRS Taxonomy development have been led for the last six and a half years by IASB director of XBRL activities Olivier Servais. He noted that this new chapter for XBRL development at the IASB will give him the opportunity to return to his native Belgium. “Integrating XBRL and our taxonomy development with the mainstream standard setting processes is a significant and positive milestone,” Servais said in a statement. “Now that the IFRS taxonomy is becoming widely adopted and implemented, it makes a perfect time for me to move on.”
Hoogervorst noted that the Disclosure Initiative is an important development for the IASB. “We are determined to improve how financial information is communicated, including working with regulators on electronic filing requirements,” he said in a statement. “Olivier can be very proud of his team’s achievements over the last six years, and I would like to thank him for his contribution to the organization.”
The new team also includes staff members from the German national accounting standard-setter, the DRSG. More information is available on the project pages of the IASB’s Web site, www.ifrs.org.