The Financial Accounting Standards Board (FASB) on Nov. 13 released a proposed Accounting Standards Update (ASU) that would make it easier to navigate the disclosures that are required in interim reporting periods, clarify when that guidance is applicable and what disclosures are required during these reporting periods. Responses to the proposed ASU are due Mar. 31, 2025.

The proposed ASU does not change the essence of interim reporting or expand or reduce current interim disclosure requirements. Instead, it offers clarity regarding the current interim reporting requirements.

The ASU stated that the Board is issuing the amendments in this proposed update to improve the guidance in Topic 270, Interim Reporting, by making the required interim disclosures more navigable and clarifying when that guidance is applicable. The proposed amendments also offer added guidance on what disclosures should be provided during interim reporting periods. The proposed amendments include adding to Topic 270. This is a principle that will require entities to disclose events and amendments since the last annual reporting period ended that have a material effect on the entity. 

FASB intends to keep the essence of interim reporting and expand or reduce current interim disclosure requirements, which were determined by previous Boards when the disclosure requirements were first issued. The proposed amendments' aim is to offer clarity on the current interim reporting requirements.

FASB has gotten feedback that Topic 270 is challenging and complicated to understand. The Topic's complexity is primarily due to the source literature's development, the historical content's initial codification and subsequent amendments to the Topic as new accounting guidance was issued. FASB looked to clarify the kinds of interim reporting that are subject to Topic 270 requirements.

According to the FASB, the proposed ASU amendments would:

• Clarify that the guidance in Topic 270 applies to all entities that offer interim financial statements and notes by generally accepted accounting principles (GAAP);

• Create a comprehensive list in Topic 270 of interim disclosures that are required in interim financial statements and notes under GAAP;

• Incorporate a disclosure principle, which is modeled after a previous Securities and Exchange Commission principle that would require entities to disclose events and changes that happen after the end of the most recent fiscal year that have a material effect on the entity;

• Improve guidance regarding the information and the format of interim financial statements.