FASB Minutes Give Insight into Controversial Decision
Last week, the Financial Accounting Standards Board (FASB) rejected recommendations by the Emerging Issues Task Force (EITF) that costs and expenses relating to the September 11 terrorist attacks on the United States should be considered extraordinary items for financial statement reporting.
Following a backlash of objections that occurred when the FASB announced that such expenses would not be considered extraordinary, the FASB has produced the minutes from the EITF meetings on this matter.
Discussion centered around the requirements of Opinion 30 and its applicability in this situation. Opinion 30 provides for "separate classification of the impact of certain events as extraordinary because the events are so unusual and infrequent that the statement of operations is more meaningful when the complete impact of those events is distinguished from the rest of the activity reflected in the statement of operations."
The task force concluded that investors would be better served by not separating the events of September 11 from the income from continuing operations.
You can read the complete text of the minutes from the two EITF meetings.