FASB delays proposed new Statement No. 5

By Cydney Posner

As you may recall, in June, the FASB had issued a new exposure draft proposing significant amendments to Statement No. 5, Disclosure of Certain Loss Contingencies, that would have expanded both the number and type of loss contingencies required to be disclosed in financial statements and the extent of disclosure of specific quantitative and qualitative information about those loss contingencies. The proposal, which would have been effective for annual financial statements ending after December 15, 2008, created enough of a stir that, as described in an article from Accounting Research Manager, FASB decided to delay issuance of a final standard. To address serious concerns raised in the comment process regarding potential disclosure of prejudicial information and waiver of attorney-client privilege, the FASB will now work to develop and field test an alternate model. As a result, it is expected that any final standard would be delayed for at least one year, to apply to fiscal years ending after December 15, 2009.

This content is provided for general informational purposes only, and your access or use of the content does not create an attorney-client relationship between you or your organization and Cooley LLP, Cooley (UK) LLP, or any other affiliated practice or entity (collectively referred to as “Cooley”). By accessing this content, you agree that the information provided does not constitute legal or other professional advice. This content is not a substitute for obtaining legal advice from a qualified attorney licensed in your jurisdiction, and you should not act or refrain from acting based on this content. This content may be changed without notice. It is not guaranteed to be complete, correct or up to date, and it may not reflect the most current legal developments. Prior results do not guarantee a similar outcome. Do not send any confidential information to Cooley, as we do not have any duty to keep any information you provide to us confidential. This content may have been generated with the assistance of artificial intelligence (AI) in accordance with our AI Principles, may be considered Attorney Advertising and is subject to our legal notices.