FASB Says Adios to Loss Contingencies Project
Posted by Edith Orenstein on
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At its board meeting yesterday, the Financial Accounting Standards Board board voted to drop its loss contingencies project.
In extensive coverage of the actual discussion at yesterday's board meeting, Bloomberg/BNA [1] reporter Denise Lugo wrote in her article, FASB Drops Loss Contingencies Project; Says Enforcement Actions Should Suffice [2] (sub req'd):
[FASB]...voted 5-2 on July 9 to remove from its agenda a project aimed at improving disclosures about loss contingencies, stating that further progress should be handled through enforcement actions as opposed to additional standard-setting efforts.
FASB members in general agreed with a staff member's summary “that it is not the board's duty to enforce the guidance that it provides.
As we have previously written in this blog, the legal community, including the American Bar Association and the Association of Corporate Counsel, opposed FASB's original proposal (Exposure Draft), as well as FASB's revised Exposure Draft.
Read more about FASB's decision to drop the loss contingencies project here [3].