Proposal on Inventory Disclosures

The FASB proposed requiring all entities to make additional disclosures regarding changes in inventory that are outside the normal purchase, manufacture or sale of inventory and the composition of inventory. All entities also would have to make certain inventory disclosures currently required by the SEC. Entities that make segment disclosures would have to make disclosures about inventory by reportable segment if they provide that information to the chief operating decision maker. Entities that apply the retail inventory method would have to make additional qualitative and quantitative disclosures about the critical assumptions they use in their inventory calculations. The proposal is part of the FASB’s disclosure framework project, under which the Board also proposed changes to the disclosure requirements for income taxes, fair value measurements and defined benefit plans. The Board also plans to review disclosure requirements for interim reporting.

(Source: EY AccountingLink - Financial Reporting Briefs - March 2017)