Over the last several years the SEC’s focus on disclosure effectiveness and capital formation have driven significant change in public company reporting. From the 2015 and 2016 requests for comment on a variety of S-K and S-X requirements to the latest proposal to amend the definition of accelerated filer this process has generated much to watch and implement.
In addition,the FASB has also reviewed disclosures and made improvements to many areas in the Codification.
One area where there has been overlap between the SEC’s and the FASB’s activities is the SEC’s August 2018 Disclosure Update and Simplification final rule. This rule included a number of changes to Regulation S-K and S-X and also identified places where the SEC required information that in part overlapped and also sometimes went beyond current GAAP requirements. The SEC referred these areas to the FASB for consideration in the standard-setting process.
On May 6, 2019, the FASB issued an exposure draft related to this “referral” from the SEC. The proposed amendments in the exposure draft would modify disclosure or presentation requirements in a variety of topics in the Codification, ranging from removing the impracticability exception, to the requirement to disclose revenues for each product and service or each group of similar products and services, to adding disclosure of where derivative instruments and their related gains and losses are reported in the statement of cash flows. The exposure draft has a very helpful table of all the proposed changes.
As always. your comments and questions are welcome!