FASB Reviews Impact of Attacks on Businesses' Financial Reporting
(FASB) In a regularly scheduled meeting last week the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) discussed the financial reporting implications of the September 11 terrorist acts. In addition to the tragic loss of thousands of lives, businesses are now faced with the challenge of providing meaningful financial information to the public reflecting changes precipitated by recent events.
With the incidents occurring so near to the close of the third quarter -- and affecting a broad spectrum of companies -- the accounting profession and the FASB are challenged with responding to financial reporting questions that have arisen from these events, the organization stated. Absent EITF guidance, many companies and their auditors would be faced with individually answering those questions in early October.
The EITF discussions focused on three issues, including how losses or other costs caused by the incident should be reported in financial statements, when those losses or costs should be recognized (on September 11 or some later date), and whether other information about the economic effects of the incident should be provided in financial statements.
The Task Force is scheduled to review the draft conclusions with the objective of finalizing that guidance in a meeting to be held on Friday that will begin at 1:00 p.m. EST.