The Securities and Exchange Commission’s Advisory Committee on Improvements to Financial Reporting has released a draft of its final report.The draft report updates a progress report released in February. Among the committee’s proposals are putting executive summaries at the beginning of annual and quarterly financial reports. The committee also wants to increase investor representation on the Financial Accounting Standards Board and the Financial Accounting Foundation. The committee proposes creating a Financial Reporting Forum to coordinate the efforts of FASB with the SEC, the Public Company Accounting Oversight Board, investors, auditors and other parties.

It also proposes redesigning accounting standards to make them more understandable, and it backs FASB’s efforts to split the income statement into two or more sections.

The committee generally advocates a move away from industry-specific guidance in authoritative literature.

“A better approach would be to focus on the nature of the business activity itself, since the same activities, such as lending, may be carried out by companies from different industries,” the draft report said.

The committee also wants the SEC to codify its guidance on accounting matters in a format consistent with that used by FASB. If the convergence of U.S. generally accepted accounting principles and International Financial Reporting Standards does not occur within a few years, FASB and the SEC should consider a systematic rethinking of U.S. GAAP.

In terms of restatements, the committee proposed that the determination of whether an accounting error is material be separated from the decision on how to correct the error. Companies should promptly correct and prominently disclose any accounting error unless it is clearly insignificant.

The committee also said that the SEC should recommend that FASB be “judicious in issuing new standards and interpretations that expand the use of fair value in areas where it is not already required until FASB completes a measurement framework to systematically assign measurement attributes to different types of business activities, and the SEC, FASB, and other regulators and standards-setters develop and implement a plan to strengthen the infrastructure that supports fair value.”

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