Dive Brief:

• The Financial Accounting Standards Board published a new standard that aims to clarify, but not change or reduce, existing reporting rules for interim reporting periods under Topic 270 of the guidance that underpins generally accepted accounting principles, according to a Monday press release.
• Among the new provisions, the amendment will require entities to disclose any events that have occurred since the company’s last annual reporting period that “have a material impact on the entity,” according to the newly published standard. 
• The rule, which covers reports for quarterly periods and any other interval that is less than a “full operating cycle or full year,” is effective for public companies beginning after Dec. 15, 2027 and for private and all other businesses after Dec. 15, 2028.

Dive Insight:

The issuance marks the 11th accounting standards update issued by the FASB this year, matching the high last seen in 2020 and already more than doubling the four issued for the full 2024 calendar year, according to data on the FASB’s website. One more may be published by year-end, a FASB spokesperson said last week in an email. 

A passage in the new rule’s description of the minimum disclosure requirements underscores the push by the accounting standard setter to ensure that interim reports are robust. 

“Many publicly traded companies report summarized financial information at periodic interim dates in considerably less detail than that provided in annual financial statements,” the new standard states. “While this information provides more timely information that would result if complete financial statements were issued at the end of each interim period, the timeliness of presentation may be partially offset by a reduction in detail in the information provided.” 

Some of the additional information required to be disclosed under the new guidance varies depending on the type of company. For example, public companies that report summarized financial information between annual reports must at a minimum include such information as sales or gross revenues, provision for income taxes, net income and comprehensive income as well as changes in accounting principles, accounting estimates or in the reporting entity. There is other guidance specific for private companies and not-for-profit entities as well.