Enhancing the effectiveness of financial reporting for the twenty‐first century

Abstract

There are grave concerns about the growing complexity of notes accompanying financial statements. This article reviews the initiatives taken by the FASB, the SEC, and others to simplify things. Those responsible for preparing financial statements need to pay close attention to these trends.

FASB ASC § 740 simplification of income taxes: An evaluation of the effects on U.S. corporate financial statements from 2015‐present

“…Simplification of FASB guidance has been a topic of discussion for a long time, before the Codification even existed. According to an article by Urbancic and Sylvestre (1997), we see how even back before the year 2000, the concern about simplifying financial reporting for the upcoming century was on the forefront of conversation. Over a decade before the Codification even took effect, this topic was already being thoroughly discussed, and is continuing well over two decades after the fact.…”

“…One of the foremost items to look at in relation to 1997, was what authoritative guidance was used prior to the Codification. Before FASB condensed all authoritative guidance under the Codification, the SEC worked with FASB and AICPA to release guidance, in the form of proposed rules and other releases, that was intended to inform accounting practitioners without causing an information overload (Urbancic & Sylvestre, 1997). Items such as this can be seen as the foundation for the modern Codification, a single source of authoritative guidance that any practitioner can call upon without fail.…”