Defining Issues | January 2017
FASB proposes additional inventory disclosures
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KPMG reports on the FASB’s proposals for additional inventory disclosures. As part of the FASB’s Disclosure Framework project, incremental disclosures under ASC 330 would be required.
Applicability
- All companies with inventory
Relevant dates
- January 10, 2017 – FASB issued proposed ASU
- March 13, 2017 – Comments due on proposed ASU
- March 17, 2017 – FASB will hold public roundtable to solicit feedback on its Disclosure Framework project
Key impacts
- A company that applies the retail inventory method (RIM) would qualitatively and quantitatively disclose the critical assumptions used to measure inventory at the end of each annual period presented
- Companies would disclose how different types of inventory might affect future cash flows
- Companies would disclose inventory balances by segment if the information is provided to the chief operating decision maker (CODM)
- In order to comply with these proposals, companies would need to evaluate their existing processes and controls over accumulating and aggregating data
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Report contents
- Applying the proposed inventory disclosures
- Looking ahead to the public roundtable