The Securities and Exchange Commission launched a much-needed initiative last year in creating the Advisory Committee on Improvements to Financial Reporting. The SEC staff will now review the Committee’s draft decision memo (you can see coverage of the memo in the “Rules and Proposals” section of the magazine this month) and make recommendations to the SEC for implementation.

In introducing its draft report in January, the Committee stated its belief that financial reporting should provide information that helps users to make investment, credit, and similar resource allocation decisions. But the report also lamented, “Over time, financial reporting has become a burdensome ...