The Financial Accounting Standards Board has issued a pair of proposed accounting standards updates on the classification of debt in a classified balance sheet (current versus noncurrent), and changes to the disclosure requirements for inventory under the Disclosure Framework.

The first proposed update aims to improve financial reporting by simplifying FASB’s existing guidance for deciding whether debt should be classified as current or noncurrent on a classified balance sheet. It would replace the current fact-specific guidance with an overall principle for debt classification tailored to a borrower’s contractual rights and obligations as of the reporting date.

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