NAREIT Alert (August 29, 2016)

Aug. 29, 2016

On Aug. 11, the Financial Accounting Standards Board (FASB or Board) issued an Exposure Draft (ED or Proposal) that proposes a framework for the Board to consider when it develops future financial standards. The ED consists of a proposed chapter for the conceptual framework on financial reporting that would cover the display of line items, totals, and subtotals on the financial statements. The ED may be of particular interest to NAREIT member companies, as it provides an opportunity to give the Board input on how to develop a conceptual framework for financial statement presentation requirements that could better communicate the performance of REITs.

If you are interested in participating on a task force that will evaluate the Proposal and assess whether NAREIT should develop a response, please respond to Christopher Drula at cdrula@nareit.com by Sept. 15. The comment letter deadline is Nov. 9, 2016.

The ED discusses information that should be evaluated when determining how transactions should be reflected in the financial statements. The Proposal also discusses the type of information provided by the financial statements. The Proposal then describes how the presentation of information in the financial statements meets the objective of financial reporting, which is defined as follows:

The objective of general purpose financial reporting for business entities…is to communicate financial information to existing and potential investors, lenders, and other creditors (resource providers) in making decisions about providing resources to an entity.

Contact: George Yungmann at gyungmann@nareit.com or Christopher Drula at cdrula@nareit.com.