I agree with this project because many of the disclosures that are required only benefit the users of public company financial statements. As long as the FASB is on the same page as the users of private and not-for-profit financial statements, this project could increase the relevance of information presented, decrease the cost of preparing necessary disclosures, and greatly benefit the financial information users. Many of the required fair value disclosures are in place for the benefit of public company information users. Some of these disclosures are completely irrelevant for private and not-for-profit company information users and cause the companies to incur unnecessary costs to prepare them. By decreasing the amount of disclosures, companies can now focus on making sure the required disclosures are adequate and fully disclose all information. This is especially important since level 3 fair value measurements are the values which use the greatest amount of management’s judgement. Users of financial information need to know what judgements management is making.
Since financial statements are mainly for the external users, I agree with this project because it will ultimately provide greater benefits to the users of financial information. The key for me in agreeing with this project is that the FASB surveyed users of financial statements, not the companies, and asked them what disclosures are relevant and irrelevant. This will ensure that the users will still be provided with all the information they need to make decisions.
What do you think about decreasing the disclosure requirements? Here’s the article http://www.accountingtoday.com/news/FASB-Tackle-Fair-Value-Disclosures-Private-Companies-Nonprofits-60914-1.html