The VSCPA’s Accounting and Auditing Advisory Committee (A&A) has submitted a comment letter to the Financial Accounting Standards Board (FASB) regarding the board’s Conceptual Framework for Financial Reporting: Chapter 8 — Notes to Financial Statements (PDF).
The committee noted its support for FASB’s goal of making financial statement disclosures more effective and efficient and less redundant, as well as the approach the board used in limiting disclosures based on the criteria of relevance, cost constraints and limitations on future-oriented information. But the committee questioned several aspects of the framework that “appear inconsistent with these limitations or are not sufficiently clear on how they will achieve the stated objectives.”
The committee wrote: “It is difficult to see how the ED will ultimately result in disclosures that are not overly excessive or complex in order to provide better decision making tools to the users of financial statements. The criteria for limitations within the context of materiality are not new concepts and generally have been applied to the existing accounting standards.”