Four years ago, I wrote in this space about FASB’s then-new Disclosure Framework project. The stated goal of the project is “… to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements.” Achieving that goal requires both ensuring that important information is there and avoiding unimportant information as much as possible, in order to reduce the possibility that the important stuff is too difficult for readers to find.
FASB noted when it started the project that “Although reducing the volume of the notes to financial statements is not the primary focus, the board hopes that a sharper focus on important information will result in reduced volume in most cases.” So, while reducing disclosures wasn’t the goal, FASB at least believed a reduction was a likely outcome. This gave financial statement preparers, who generally believe that current GAAP requires too many disclosures, some optimism about the project.
