Running Head: FASB PROJECT: ACCT 310

FASB Project: ACCT 310

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Cherry Bekaert LLP. (2017, January 16). FASB Proposes Changes to Balance Sheet

Debt Classification and Inventory Disclosures. Cherry Bekaert.

https://www.cbh.com/guide/articles/fasb-proposes-changes-to-balance-sheet-

debt-classification-and-inventory-disclosures/

The FASB announced two proposed Accounting Standards Updates in a January 10

news release affecting debt balance sheet grading and inventory reporting requirement under

its Project for Disclosures in the context of the FASB. The FASB proposes streamlining the

existing guidelines for debt cataloguing with a coherent, all-inclusive principle that discusses

the borrower's pledged obligations and rights. The adjustments anticipated could change how

such debt structures are categorized between current liabilities and non-current liabilities.

Disclosure system — Inventory: The FASB requires businesses to report additional inventory

information, such as inventory adjustments unrelated to the usual phase of production,

purchase, or sale.

Cohn, M. (2017, January 11). FASB proposes changes on debt classification and

inventory disclosures. Accounting Today.

https://www.accountingtoday.com/news/fasb-proposes-changes-on-debt-

classification-and-inventory-disclosures

Michael Cohn elaborates on the proposed changes by FASB on inventory disclosures

and debt classification. The FASB has developed a couple of proposed debt classification

amendments (non-current versus current) and changes to the inventory disclosure criteria as

per the Disclosure System. The first proposed change focuses on improving financial

reporting by modifying the current FASB guidelines to decide whether debt must be

categorized on a labeled balance sheet as non-current and current. It will substitute a general
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debt classification concept adapted to a creditor's contractual rights and duties on the current

fact-specific guidelines' reporting date.

Miller GAAP Update Service; Riverwoods. (2017, September 15). Inventory (Topic 330):

Disclosure Framework-Changes to the Disclosure Requirements for Inventory

(Exposure Draft Issued January 2017). ProQuest.

https://search.proquest.com/docview/1857228065?accountid=201395

According to this trade journal, the FASB proposes to increase the usefulness of

details private and public reveal about inventory. Although several businesses would have to

include additional details in the proposal, The FASB's key proposed reform involves the

retail accounting process. Companies, not companies. It is possible that the proposed

incremental disclosures are not especially significant or expensive to apply the retail

accounting approach for inventories. Several of the GAAP requirement modifications are

proposed to constitute inventory details currently required by the SEC regulations. Therefore,

with one major exception, the plan must comply with private and public corporations'

inventory disclosures. Unless such information is given to the organization's head operating

decision-maker, public corporations are required, under the proposal, to disclose inventory

balance sheets for each reporting section.

Targeted News Service; Washington, D.C. (2017, January 10). FASB Issues Proposed

Changes on Balance Sheet Debt Classification, Disclosure Requirements for

Inventory. ProQuest.

https://search.proquest.com/docview/1857228065/171FB1D7A3CA444APQ/1

According to this newspaper by Targeted News Service FASB, two ASUs

(Accounting Standards Updates), the proposed ASU aims to enhance financial reporting by
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rationalizing whether debt should be listed in a classified balance sheet, non-current or

current. The present factual guidance will be replaced by a consistent overarching debt

classification concept, which focuses on a creditor's contract rights and responsibilities at the

reporting date. The proposed ASU forms part of FASB's wider system for the filing of

financial statements by explicitly supplying consumers of a reporting entity's financial

statements with the most relevant information.

Tysiac, B. K. (2017, January 10). FASB addresses debt classification, inventory

disclosures. Journal of Accountancy.

https://www.journalofaccountancy.com/news/2017/jan/fasb-debt-classification-

inventory-disclosures-201715819.html

FASB submitted segregated proposals covering the debt classification in balance

sheets and inventory disclosure criteria underneath the Board's System for Disclosure. The

anticipated Update of Debt Classification Accounting Principles aims at simplifying the

guidelines on whether a debt is to be listed on a classified balance sheet as non-current or

current. The anticipated guidelines would substitute the current fact-specific rules with a

coherent, overarching debt classification concept that focuses on the contract rights and

responsibilities of a creditor that exist at the time of reporting. According to the proposal,

whether the creditor obtains a waiver earlier than the financial statements are released or are

available, or whether the waiver satisfies certain requirements, the borrower will still

recognize the debt as not current when the debt agreement breach has been terminated.