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By Denise Lugo
U.S. accounting rulemakers won’t attempt changes to income tax disclosures until Congress indicates its direction with tax reform, focusing instead on making financial statement footnote disclosures more useful, FASB member Marc Siegel said.
“We’re trying to be cognizant and aware of the D.C. aspects of any tax reform and so it wouldn’t make sense for us to finalize anything around tax disclosures until we see if or what might be coming out of the new regulations in Washington,” Siegel told Bloomberg BNA in a video interview July 17.
See Siegel interview here: https://www.bna.com/financial-accounting-standards-m73014463972/
The Financial Accounting Standards Board proposed in July 2016 to revise the disclosures for Income Taxes, 740, as part of its effort to test a broad framework that it and companies would use to determine decisions on what disclosures are relevant to a particular accounting topic.
FASB’s efforts to improve the effectiveness of disclosures is one of its most important standard-setting initiatives, addressing decades of concerns by regulators, investors and other financial statement users.
Investors, creditors and others have said that current disclosure provisions are too boilerplate, repetitive, and obscure important information.
Two years ago, FASB proposed, “the board’s decision process,"an internal framework to help it decide which disclosures to require under an accounting standard, and the “entity’s decision process,” the framework companies would use to help them make judgments about whether a disclosure is immaterial.
The board will begin redeliberations on those proposals first, Siegel said, followed by proposed revisions to the five standards it road tested against them.
In addition to income tax rules, FASB also proposed disclosure changes for rules on fair value, defined benefit plans, inventory, and government assistance, to determine the effectiveness of the proposed framework and company guidelines.
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