The VSCPA’s Accounting & Auditing Advisory Committee (A&A) has commented on two proposals from the Financial Accounting Standards Board (FASB) aimed at simplifying income statements.
One letter deals with FASB’s proposal to simplify inventory measurement. The committee was largely supportive of the proposal, writing, “We support the Board’s proposed guidance to measure inventory at lower of cost and net realizable value. We believe that the proposed guidance will help to reduce the cost and complexity measurement of inventory that is included in current guidance while still maintaining or improving the usefulness of the information provided to users of financial statements.”
The second letter deals with FASB’s proposal to eliminate the concept of extraordinary items from the income statement. The committee also supports this proposal, agreeing that it would “save time and reduce costs in the financial reporting process.”