FASB Proposes Changes in Presentation of Financial Statements

The Financial Accounting Standards Board has released an exposure draft proposing changes in its conceptual framework related to how items are presented in a financial statement.

The exposure draft, Conceptual Framework for Financial Reporting: Chapter 7: Presentation, explains the proposals and will become a basis for FASB when it describes presentation requirements in future accounting standards.

The proposed changes aim to improve the ability of users of financial statements to predict future cash flows. The proposals include how to group individual recognized items into line items and subtotals, and clarify the relationships among assets, liabilities, and equity, along with the effects of related changes on comprehensive income and cash flows.

“The Conceptual Framework is the foundation for resolving accounting and reporting questions,” said FASB Chair Russell G. Golden in a statement. “These proposals are intended to provide direction, structure and a basis for consistent Board conclusions when making standard setting decisions related to presentation.”

The proposal is part of FASB’s larger conceptual framework project for developing future accounting standards, which also encompasses measurement and disclosure concepts. More information about the proposal, including a FASB In Focus summary, is available on FASB’s website.

FASB is asking for comments on the exposure draft to be submitted by Nov. 9, 2016.