Fasb Changes
To: FASB / IASB
From: Billy Leigh
Re: Proposed Changes to Financial Statement Presentation Dear Members of IASB / FASB,
As I understand it, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) are proposing a joint venture to change the presentation of financial statements. I appreciate the opportunity to comment on the proposed changes.
It is in my humble opinion that the current requirements for financial statement presentation allow for too many alternative ways to present the same events or activities. In addition, the information presented is often too aggregated for financial statement users to gain any real insight into a company’s financial position. Because users …show more content…
IAS 1 (IFRS) and Regulation S-X (US GAAP) both give guidance as to the presentation of financial statements, but there is little guidance as to the presentation of specific line items within financial statements. (1) The level of specific detail and the number of line items presented varies from company to company. For instance, the presentation of items such as electricity and renter’s insurance may be presented separately, or they may be combined into general or administrative costs. Also, some entities may combine direct product costs, such as parts and labor, or chose to report them separately. Companies can also combine cash, non-cash, and various miscellaneous aspects of costs of goods sold (COGS) into a single line item, which makes it difficult for users of financial statements to compare a line item in one statement with information presented in other financial statements. (1) (2) This varying level of detail makes it difficult for financial statement users to compare revenue and costs, as well as perform necessary benchmark analysis of those activities across an industry. …show more content…
The boards have asked preparers and users of financial statements to weigh in on the specific costs and benefits of changing the financial statement presentation. This project is currently considered “ongoing,” and an exposure draft will be written once the boards have received more input. (1) I am glad that the boards have decided to allow those most affected by these proposed changes to weigh in on this situation. This will surely lead to the best possible outcome for all parties
From: Billy Leigh
Re: Proposed Changes to Financial Statement Presentation Dear Members of IASB / FASB,
As I understand it, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) are proposing a joint venture to change the presentation of financial statements. I appreciate the opportunity to comment on the proposed changes.
It is in my humble opinion that the current requirements for financial statement presentation allow for too many alternative ways to present the same events or activities. In addition, the information presented is often too aggregated for financial statement users to gain any real insight into a company’s financial position. Because users …show more content…
IAS 1 (IFRS) and Regulation S-X (US GAAP) both give guidance as to the presentation of financial statements, but there is little guidance as to the presentation of specific line items within financial statements. (1) The level of specific detail and the number of line items presented varies from company to company. For instance, the presentation of items such as electricity and renter’s insurance may be presented separately, or they may be combined into general or administrative costs. Also, some entities may combine direct product costs, such as parts and labor, or chose to report them separately. Companies can also combine cash, non-cash, and various miscellaneous aspects of costs of goods sold (COGS) into a single line item, which makes it difficult for users of financial statements to compare a line item in one statement with information presented in other financial statements. (1) (2) This varying level of detail makes it difficult for financial statement users to compare revenue and costs, as well as perform necessary benchmark analysis of those activities across an industry. …show more content…
The boards have asked preparers and users of financial statements to weigh in on the specific costs and benefits of changing the financial statement presentation. This project is currently considered “ongoing,” and an exposure draft will be written once the boards have received more input. (1) I am glad that the boards have decided to allow those most affected by these proposed changes to weigh in on this situation. This will surely lead to the best possible outcome for all parties