Defining Issues | January 2017
 

FASB proposes additional inventory disclosures

Also read

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

Proposed ASU on ASC Topic 330

  • 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

Podcast

  • Listen to KPMG’s podcast here

Report contents

  • Applying the proposed inventory disclosures
  • Looking ahead to the public roundtable

 

 

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