The Financial Accounting Standards Board (FASB) recently issued a proposed Accounting Standards Update (ASU), Interim Reporting (Topic 270): Narrow-Scope Improvements, which is intended to improve the navigability of interim disclosures and clarify when that guidance is applicable, including what disclosures are required to be provided in interim reporting periods. The amendments in the proposed ASU would apply to all entities that provide interim financial statements and notes prepared in accordance with generally accepted accounting principles (GAAP).
The amendments in the proposed ASU would result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list, the FASB focused on identifying and clarifying the interim disclosures currently required under GAAP, rather than evaluating whether to expand or reduce the existing disclosure requirements.
The proposed ASU also incorporates a disclosure principle that was modeled after a superseded Securities and Exchange Commission (SEC) disclosure requiring entities to disclose events and changes since the end of the last annual reporting period that would be expected to have a material impact on the entity. The amendments in the proposed ASU also would clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements prepared in accordance with GAAP.
The proposed ASU would require an entity to apply the amended guidance on a prospective basis to interim financial statements and notes prepared in accordance with GAAP issued for interim reporting periods after the effective date. The FASB will determine the effective date for the proposed ASU, including whether early adoption will be permitted, after considering feedback from stakeholders.
Stakeholders are encouraged to review and provide input on the proposed ASU by March 31, 2025.
