FASB News
Disclosure Framework Nears Completion
FASB is close to finalizing a guide to help it write consistent, effective footnote disclosure requirements in new accounting standards. At its May 2 meeting, the board discussed late-stage issues for the plan. FASB wants to use the framework to outline procedures it should follow and questions it should ask when assessing the value of writing a new disclosure requirement. Such questions include whether more detail is needed to explain the nature of a financial statement line item or whether changes in a line item from a prior period need some clarification. In March, the board agreed to let its research staff draft a final update to be published soon.
IASB News
Proposed Guidance for Management Performance Measure Moves Forward
The IASB wants businesses to identify an earnings measurement that presents management’s view of the company’s financial performance for analysts and investors. The board’s decision was part of its effort to develop proposed disclosure guidance for a management-defined measurement of operating performance. If a company were to provide a management-defined measurement, such as recurring profit, it would have to reconcile it in the financial statement footnotes to the most appropriate measurement from IFRS. “We’re saying, ‘Tell us what it is you consider to be the key metric that you use when you explain performance,’” IASB Vice Chair Sue Lloyd said. “We hope plenty of people say that’s an IFRS number … but if it’s not, there’s additional requirements to help explain it.” Board members agreed to proceed with the plan as long as the wording in an upcoming proposal properly communicated that companies would not be required to report the management-defined measurement, and that the proposal communicated that companies should strive to produce financial statements with standardized measurements from IFRS.
Vice Chair Sue Lloyd Reappointed to Second Term
On April 26, the IFRS Foundation, the IASB’s parent organization, reappointed IASB Vice Chair Sue Lloyd to a new five-year term. Before joining the IASB in 2014, Lloyd was the technical director for the board’s research staff. She was named vice chair in 2016 and has chaired the IFRS Interpretations Committee since 2017. During her time on the IASB, Lloyd has also chaired the board’s Impairment Transition Resource Group to help businesses and other organizations deal with the guidance for writing down bad loans and securities according to IFRS 9, Financial Instruments.
