IMA Financial Reporting Committee and Small Business Committee comment letter on Proposed Accounting Standards Update (ASU) No. 2019-600, Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative
The IMA Financial Reporting Committee (FRC) and Small Business Committee (SBC) issued a joint comment letter in response to the FASB’s Proposed ASU No. 2019-600, Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. In this release, the FASB seeks input on incorporating disclosure requirements that are currently required under SEC rules to the FASB Accounting Standards Codification with the ultimate goal of eliminating duplicative disclosures.
In its response, the FRC and SBC generally oppose the proposed amendments. They explain that the FASB’s exposure draft fails to assess how each of these disclosure requirements is consistent with the FASB’s disclosure framework. In the Committee’s view, the proposed amendments may impose significant costs, particularly on smaller reporting companies (SRCs) and private companies for which these disclosures are not currently mandated. In addition, the comment letter addresses specific considerations in the proposal regarding mandatory quarterly disclosures, pre-acquisition financial statements by entities under common control, and convenience translations of financial statements in foreign currencies.