Special Report From FASB: Business and Financial Reporting, Challenges from the New Economy
April 12, 2001
In recent years, many commentators have remarked on what they consider to be a disconnect between information provided in financial statements and the information needs of investors and creditors. Most recently, some have characterized this as a disconnect between "new economy" companies and "old economy" financial reporting. In particular, many have contended that financial statement users need:
- More disclosure of nonfinancial information
- More forward-looking information
- More information about intangible assets.
Members of the FASB and its staff have been active participants in several efforts to improve the quality of business reporting, which encompasses the broad spectrum of information that a company provides to investors and creditors. Our most recent effort was the FASB Business Reporting Research Project. The Steering Committee directing that project published three reports during 2000 and 2001, including Improving Business Reporting: Insights into Enhancing Voluntary Disclosures. This Special Report is another step in that process.
This Special Report examines each of the three areas described above, with special attention to research and recommendations developed by other organizations in the United States and Europe. One of our objectives in publishing this Special Report is to provide a background for discussion of potential projects to be added to the Board?s agenda. With that in mind, the Special Report includes a brief description of four potential projects that the Board might consider. There are probably more possibilities, and there may be some areas covered in the Special Report that appear to have a higher priority than others. We hope that constituents will see this as an opportunity to offer their insights as the Board begins to consider whether it should add new projects to its agenda.
Source: Federal Standards Accounting Board