Proposed Changes to Inventory Disclosure Requirements

Thoughtware Article Published: Feb 01, 2017
Money, Calculator and magnifying glass

On January 10, 2017, the Financial Accounting Standards Board (FASB) issued a proposal to change the disclosure requirements under Topic 330, Inventory, for all entities. The proposal’s objective is to provide information useful in assessing cash flow prospects and changes in inventory balances. The amendments would require entities to disclose inventory disaggregated by component and measurement basis and describe the types of costs capitalized into inventory. Requirements also include quantitative disclosure of inventory balance changes caused by circumstances, events or transactions outside the normal inventory cycle and a qualitative description of losses.

Additional disclosure requirements would apply to entities reporting some or all of their inventory using the retail inventory method (RIM) and last-in, first-out (LIFO) method. The proposal would amend segment disclosure requirements related to inventory and add an inventory disclosure requirement to the interim guidance. Disclosures related to standard costs would be removed.

FASB requests feedback on whether the proposed disclosure requirements would impose significant incremental costs for company management and auditors, among other topics. Comments are due by March 13, 2017.


Related Thoughtware

Kate & Ben — How can we help you? Contact Us!

How can we help you?