FASB added a disclosure framework project to its agenda in 2009 with the goal of establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant. EFRAG is undertaking a 'pro-active' project on disclosures with the objective of making disclosures more relevant for users but at the same time ensure that only useful information is prepared and disclosed. In May 2010, EFRAG appointed an Advisory Panel chaired by former EFRAG chairman Stig Enevoldsen to provide advice and input to the project.
A possible co-operation between FASB and EFRAG was first indicated in the agenda papers for the June meeting of EFRAG's Technical Experts Group (TEG).
At an education session held on the FASB project on 3 August 2011, the FASB agreed to allowing the FASB staff to co-operate with EFRAG staff by leveraging resources and sharing information towards the development of a Discussion Paper on the topic. Discussion in the education session considered the level of involvement of FASB itself (i.e. should it be more than just staff interaction) and what the possible outputs might be (e.g. a joint document, a converged 'core', or some other approach). The education session also covered issues such as the boundaries of financial reporting, the usefulness of disclosures to users and the concept of 'materiality' in the context of disclosures.
At its meeting held on 24 August 2011, the FASB approved a proposed decision process as a starting point for developing its overall disclosure framework. The process consists of a list of questions designed to formalise the FASB's method for identifying (1) needed disclosures and (2) useful disclosure information for consideration in future standard setting. The FASB also indicated that the framework, once finalised, may be used to evaluate (and potentially change) existing disclosure requirements. The FASB expects to issue a discussion paper on the project early next year.
In addition to working with EFRAG, FASB staff also plan to work with the U.S. Securities Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) to explore whether the application of materiality to disclosures of financial information can be clarified.
Improving the framework for disclosures has been a consistent theme in recent times. The IASB is also considering a project on disclosures, and in July received a report from the New Zealand and Scottish standard setters on possible disclosure improvements to IFRSs. In April 2011, the Accounting Standards Board (ASB) of the United Kingdom Financial Reporting Council (FRC) published a report Cutting Clutter: Combating clutter in annual reports. The International Integrated Reporting Committee (IIRC) is also seeking to simplify and streamline various aspects of reporting through its integrated reporting initiative, for which a Discussion Paper is expected in the coming months.