The Financial Accounting Standards Board has added a new project to its agenda aimed at making financial disclosures more organized and less redundant.

FASB took on the project in response to requests from the SEC Advisory Committee on Improvements to Financial Reporting, the Investors Technical Advisory Committee, and other quarters.

“Many constituents have expressed concerns about so-called ‘disclosure overload,’” said FASB Chairman Robert Herz in a statement. “While clear and robust disclosures are essential to informative and transparent financial reporting — a critical component in maintaining investor confidence in the markets — improving the way such disclosures are integrated can help decrease complexity.”

Indeed, FASB has been pushing in some cases in the opposite direction, to provide more disclosure in areas such as off-balance-sheet entities and fair value measurements. The move toward principles-based International Financial Reporting Standards may also require accountants to provide more disclosures of how they used their professional judgment to arrive at the accounting methods they used.

Herz said that FASB would embark on the new project to create a principles-based disclosure framework that would enable companies to communicate more effectively with investors and help eliminate redundancy or otherwise outdated GAAP disclosure requirements.

The objective is not to be “additive,” according to Herz. Instead, the project will focus on developing a framework for improved GAAP disclosures. This framework would then presumably enable organizations to focus on making more coherent disclosures in their annual reports, and move away from what some assert has become a compliance exercise. The framework perhaps may also facilitate electronic tagging of information in Extensible Business Reporting Language, or XBRL, format, which the SEC has recently begun requiring the largest public companies to use for their financial filings.

The project will address several questions, including whether the disclosure framework should apply to all entities or perhaps exclude private or nonprofit entities; apply to interim as well as annual reporting; focus only on high-level principles; and focus only on notes to financial statements or extend to ways to better integrate information provided in financial statements, management discussion and analysis, and other parts of a company’s public reporting package.   

FASB expects to begin deliberations this quarter and issue a preliminary views document in the first half of next year.

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