FASB Moves to Improve Financial Instruments Disclosure

In November 1987, the Financial Accounting Standards Board (FASB) proposed a draft that would require corporations to disclose their latest financing techniques as part of their financial statements. Financial reports generally have not kept pace with rapidly changing financial instruments and techn...

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Bibliographic Details
Published in:Financial executive (1987) 1988-03, Vol.4 (2), p.18
Main Authors: Hynes, Lynn C, Bullen, Halsey G
Format: Magazinearticle
Language:English
Subjects:
Changes
Corporate finance
Disclosure
Financial accounting standards
Financial executives
Financial instruments
Financial management
Financial reporting
Instruments
Management information systems
Market orientation
Market strategy
Off balance sheet items
Proposed
Quantitative
Requirements
Roles
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Summary:In November 1987, the Financial Accounting Standards Board (FASB) proposed a draft that would require corporations to disclose their latest financing techniques as part of their financial statements. Financial reports generally have not kept pace with rapidly changing financial instruments and techniques. Moreover, new insights provided by the innovative instruments and techniques indicate a need for better disclosure about traditional financial instruments. The FASB has proposed disclosure in 4 areas: 1. credit risk, 2. future cash receipts and payments, 3. interest rates, and 4. market values. The purpose of the disclosure is to: 1. describe both recognized and unrecognized items, 2. provide a useful measure of unrecognized items and other relevant measures of recognized items, and 3. provide information to help investors and creditors assess risks and potentials of both recognized and unrecognized items. Unrecognized instruments include options and other commitments for which some companies provide little or no information.
ISSN:0895-4186