The Financial Accounting Standards Board has completed its annual update to the GAAP Financial Reporting Taxonomy and has added a new taxonomy for companies to consider that addresses international standards.
FASB is looking for public comment on its proposed 2018 GAAP taxonomy and its new “2018 Shared Reporting Taxonomy,” which contains elements needed by companies reporting under International Financial Reporting Standards to comply with disclosure requirements of the Securities and Exchange Commission. The GAAP taxonomy is updated every year to reflect changes in accounting standards and other improvements recommended by users.
Companies use the taxonomies to file their financial statements with the SEC in XBRL, which is the digital reporting language that makes financial statement data more widely accessible and searchable. While the GAAP taxonomy has been available for several years, the SEC searched long and hard for an IFRS taxonomy that would enable IFRS filers to also file their financial statements in XBRL before finally approving one in early 2017. FASB developed the new shared taxonomy to enable those IFRS filers to also comply with SEC-specific disclosure requirements.
In a release accompanying the proposed 2018 GAAP taxonomy, FASB says it updated the 2017 taxonomy to reflect changes in accounting standards related to financial instruments, revenue recognition, goodwill impairment, non-financial assets, business combinations, receivables, compensation, service concession arrangements, earnings per share, and technical corrections and improvements.
The 2018 taxonomy also reflects the work of a taxonomy topical project related to retirement benefits, which helped reduce inconsistencies and redundancies and developed an improved structure to support improved data quality, FASB says. As a result of the second phase of the project, the proposed taxonomy contains 41 new elements and 10 eliminated elements, 32 documentation label changes, and 86 reference changes, among others.
Another topical project on fair value focused on disclosures related to measurement inputs and valuation techniques to attempt to accommodate variability in reporting. The work so far has led to the elimination of 52 elements and the addition of 144 in the 2018 proposed taxonomy.
FASB is accepting comments on both the GAAP taxonomy update and the shared reporting taxonomy through Oct. 31. After any revisions by FASB, the SEC must approve the taxonomies before companies will be able to begin using them in 2019.