Simplifying Financial Statements

Based on a Journal of Accountancy article today:

A recent survey of 105 respondents by the Financial Accounting Standards Board (“FASB”) found that stakeholders wanted simplification and better information from their financial statements.  The top three reasons improvements are needed, according to the respondents, were:

  • Simplification is needed
  • Better information is needed
  • Current information does not provide decision-useful information to investors and other users of financial reports

 The respondents also ranked the disclosure framework project the most important project on the FASB’s agenda for the next three to five years.  This project is aimed at streamlining disclosures in the footnotes to the financial statements and making them more effective.

As an advocate for small businesses and not-for-profit organizations, RCHA is adding our voice to the debate.  We have commented on exposure drafts that add reporting requirements that are not useful to the users of most small entity financial statements.  RCHA is a provider of Financial Reporting Framework for Small and Medium Entities (“FRF for SME”), a non-GAAP reporting alternative for certain small businesses.  We work with you and the users of your statements to find the most appropriate reporting for your situation, that meets the reporting requirements of your entity with the least disruption of your staff.      

Michael P. Lauer, CPA, CFE
Audit Manger

 

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