IASB AND FASB LAUNCH CONSULTATION ON PROPOSEDENHANCEMENTS TO THE PRESENTATION OF FINANCIAL STATEMENTS

The International Accounting Standards Board (IASB) and the US Financial Accounting Standards
Board (FASB) has published for public comment a Discussion Paper on financial statement presentation. The Discussion Paper contains an analysis of the current issues in financial statement presentation and presents the Boards’ initial thinking on how those issues could be addressed in a possible future format. International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP) provide only limited presentation guidance. In addition,
presentation guidelines in US GAAP are dispersed across standards. Moreover, users of financial
statements have often expressed dissatisfaction that information is not linked across the different statements and that dissimilar items are in some cases aggregated in one number. To address these issues, the IASB and the FASB propose to introduce cohesiveness and dis aggregation as the two main objectives for financial statement presentation. Cohesiveness would ensure that a reader of financial statements can follow the flow of information through the different statements of an entity;
dis aggregation would ensure that items that respond differently to economic events are shown separately. To achieve these main objectives, the Boards have developed a principle-based format
that is presented in the Discussion Paper. The Boards seek views from interested parties on both the
objectives for the presentation of financial statements and the proposed format.