Dataline: Disclosure of Certain Loss Contingencies -- A FASB Project Update (No. 2010-22)

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The FASB originally issued an exposure draft of its proposal to require new disclosures about certain loss contingencies in June 2008, and received a high volume of feedback from the marketplace. Based on this feedback, the FASB began redeliberations on the proposal in August 2009 and continued redeliberations at its April 14, 2010 meeting. The approach the FASB is now considering would result in a major shift from the original proposal, and may alleviate concerns of many constituents that certain proposed disclosures in the original proposal would impact their legal strategies and be prejudicial to their cause. The FASB believes a prejudicial exemption clause will not be necessary in the revised proposal because the disclosures would be based on publicly available, factual information and the standard would allow for aggregated disclosure of similar contingencies. The FASB plans to expose a draft of the standard in May 2010 for a 30-day public comment period, and appears committed to issuing a final standard during the third quarter of 2010, with an effective date of December 31, 2010, for calendar-year-end public companies. This Dataline discusses the status of the project based on the FASB's recent redeliberations and provides PwC's insights on selected matters.