Disclosure of Loss Contingencies – FASB Moving Forward, But More CautiouslyDecember 2009 – Articles American Bar Association, SEER Disclosure Committee Newsletter
On June 5, 2008, the Financial Accounting Standards Board (FASB Board) issued a proposal designed to require substantially more robust disclosures about contingent losses, including pending and threatened claims and environmental liabilities. Two hundred and forty-two comment letters were submitted on the proposal; 201 opposed it, including each of the twenty law firms that made submissions. On Aug. 6, 2009, FASB staff issued a Final Comment Letter Summary along with the proposal (Exposure Draft), the individual comment letters, and a summary of recent related decisions of the Board.
More than a year has passed since the public comment period closed, and FASB is again taking up the issue. On March 6, 2009, FASB held Roundtables with interested parties, and staff had been working on recommendations to make to the Board in the interim period. Then, at FASB’s Aug. 19, 2009, meeting the Board began re-deliberations on the contingent loss disclosure requirements. FASB is proceeding much more cautiously, with a scaled-back approach. It remains possible, though unlikely, that new guidance will be effective in December 2009.
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