FASB Delays Effective Date of Loss Contingencies Proposal
At its board meeting yesterday (Oct. 27), the Financial Accounting Standards Board agreed to clarify that its proposed amendments to disclosure of loss contingencies (including lawsuits) will not be effective this year-end.
Although the staff intends to bring issues for redeliberation to the board before the end of the year - with the goal of moving toward a final standard - staff recommended (and the board agreed) that based on constituent feedback received on the July 2010 Exposure Draft, Contingencies (Topic 450): Disclosure of Certain Loss Contingencies, and based on the current timing for redeliberation of the proposal, that it was important to state this clarification now, to remove any uncertainty as to whether the proposal could be effective this year. (The July 2010 proposal had stated an effective date of fiscal years ending after Dec. 15, 2010, which would have made it effective this year.)
The call for the vote today, as summed up by FASB Acting Chair Leslie Seidman, was to “clarify that under any circumstance, this proposed standard would not become effective this year-end.” The FASB board's vote in favor of that clarification was unanimous.
The offical results of the meeting (at which feedback on FASB's financial instruments proposal was also discussed, highlights of which are in a separate post in the FEI blog) can be found in FASB’s Summary of Board Decisions.