Rule Maker Progresses on Financial Statement Presentation

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By Steve Burkholder

June 1 — The Financial Accounting Standards Board approved plans to move to final drafting of its proposal on financial statement presentation.

The proposal has conceptual guideposts for how items should be displayed in financial statements.

The board at its June 1 meeting clarified that the planned framework wouldn't be authoritative guidance on a par with generally accepted accounting principles.

FASB is set for a summer or early fall exposure draft on the proposal. The proposal will form part of the board's long-running, multi-faceted project to chisel out a new conceptual framework.

FASB set a 90-day window for fielding comments from the public on the proposed concepts statement on presentation. One board member suggested that a comment period of that length would allow interested parties to study potential changes to measurement concepts that the panel also is weighing.

In action last July, FASB voted to not change the definitions of revenues, expenses, gains and losses in the current phase of the framework effort.

No Basis for `Other Comprehensive Income.'

FASB also acknowledged in mid-2016 that current rules require or allow the use of the accounting designation of “other comprehensive income”—in which changes in assets' values aren't figured into net income—and that a conceptual basis for deciding which items go into “OCI” doesn't exist.

Banks and financial companies frequently use the designation for certain investments in debt and equity securities.

Important Effort

Six years ago, James Leisenring, at the time a member of the International Accounting Standards Board, made a case for the importance of the conceptual framework (06 APPR 314, 5/14/10).

Without such underpinnings, accounting rulemakers can't create principles-based standards and can't maintain continuity of the standards “because the inclination to tinker and change between boards as they turn over is very acute,” said Leisenring, a former FASB vice chairman.

“Everybody's got their pet thing they'd like to fix, and if they don't have a framework, it's not going to be fixed in any consistent manner,” Leisenring, today a FASB senior advise on the framework, said in a speech as he was preparing to leave IASB.

To contact the reporter on this story: Steve Burkholder in Norwalk, Conn., at

To contact the editor responsible for this story: Ali Sartipzadeh at

For More Information

A FASB meeting handout on the conceptual framework issues aired June 1 is available at

FASB plans to post a summary of board decisions soon at

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