If you've ever found yourself grumbling over the volume or complexity of financial statement disclosures, now you have a chance to take action. The Financial Accounting Standards Board is formally opening a dialogue on what to do about the rising concerns about disclosure overload and is floating some possible solutions.

FASB published an “invitation to comment” as a first step to a broad exploration of how to make disclosures more effective for public, private, and not-for-profit organizations alike. The document addresses a decision process that the board could adopt to help the board make future determinations about disclosure requirements and a flexible approach to disclosure requirements that would enable an organization to focus on information specific to its own circumstances. The document also addresses a judgment framework that an organization might follow to determine which disclosures are relevant and appropriate to its circumstances and a possible approach to organizing and formatting disclosures to make information easier for users to navigate.

The board is not proposing a specific change to accounting standards, but looking to spark a dialogue to determine the best path forward. FASB Chairman Leslie Seidman said during Compliance Week's recent conference that disclosure overload is one of the biggest complaints she routinely hears from all corners of capital markets and beyond. "Many of those stakeholders tell me that financial reports are just too long—and, as a result, that they have become much less effective tools for communicating with investors," she said. "Yet investors continue to say they want more information, particularly when there is a business downturn or failure. Often the information that these investors want is available in the financial statements—but it is hidden in plain sight."

That prompted FASB to look for ways to enable entities to exercise some judgment about which disclosures are relevant to them while also improving the board's own procedures for establishing disclosure requirements. She emphasizes, however, that the focus of the project is to make disclosures more effective, not necessarily to reduce the volume, although that may happen ultimately.

In a summary explaining the invitation to comment, FASB says many disclosure requirements have been developed when investors call for new disclosures because of a business downturn or some increase in risk. The information they demand may be relevant to only a handful of organizations or those in a particular sector, but disclosure requirements usually apply to all companies. “In effect, preparing notes to financial statements can be an exercise in complying with requirements instead of communicating useful information or only useful information,” FASB notes. The board also acknowledges that it has piled on disclosure requirements over the years in an ad hoc fashion, following no consistent process for determining when disclosures are necessary.

FASB is accepting comments on the invitation through Nov. 6.