FASB seeks feedback on disclosures project

The US standard-setter is soliciting comment on its plan to reduce disclosure notes. 

The Financial Accounting Standards Board (FASB) released for comment a framework that the board could use to improve the effectiveness of disclosure notes contained in financial statements.

Many private equity chief financial officers have questioned the relevance and sheer volume of information that must be contained in note disclosures. For instance, some say having to disclose specific inputs used in the fair value estimates of portfolio companies is an information overload for limited partners reading a fund’s financial statement.

The board first began soliciting feedback on disclosure notes in July 2012, when it issued a 75-page consultation paper asking stakeholders how to make disclosures more useful and less redundant. The exposure draft released on Tuesday is the board’s response to that consultation.

Once the framework is in place, the FASB will consider the costs of providing certain note disclosures while setting accounting standards.

“We encourage our stakeholders to review and provide comment on the proposal, and let us know if they think it would help the board achieve our objective of improving the relevance of the information in those notes to investors and other financial statement users,” FASB chairman Russell Golden said in a statement.

Comments to the proposal are due by July 14, 2014.