Proposed Changes to Accounting and Disclosures of Pending Litigation Are Dropped
In July 2012, the Financial Accounting Standards Board (FASB) voted to drop a controversial project that would have required companies to disclose more about contingent losses, including most notably those arising from litigation.
The now-withdrawn proposal would have required significant additional disclosure of litigation. The vast majority of those commenting on the proposal opposed it, many with strenuous objection.
This article summarizes the reasons why the proposal was dropped, and provides additional perspective.
I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.
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