FASB BEGINS TO EXPLORE A NEW FINANCIAL REPORTING MODEL

The Financial Accounting Standards Board has issued an Invitation to Comment that addresses the current financial reporting model and asks whether that model should change to reflect more and different information about business than is currently available today. Comments on the Invitation to Comment are requested by July 31.

FASB Chairman Dennis R. Beresford noted that "some members of the financial reporting community have asserted recently that the current financial reporting model is obsolete; that it doesn't portray how business is run today. Critics say that vital information about a business never sees that light of day."

Late in 1994, after three years of research, a special committee of the AICPA issued a report that makes recommendations for significant changes to improve business reporting. An association of financial analysts, the Association for Investment Management and Research (AIMR), produced a study also recommending changes in financial reporting that would make it more relevant to users of financial reporting by businesses. "The purpose of the FASB's Invitation to Comment is to solicit information from the Board's constituents about their views on those two reports and to provide the Board with information that will help in deciding how best to address the recommendations they contain," said FASB Project Manager Raymond Simpson.

On April 25, the FASB plans to hold a roundtable meeting with a wide variety of its constituents on these issues.