Financial Accounting Standards Board

The FASB recently issued an exposure draft on new accounting standards concerning litigation contingencies.

The gist of it is that companies who are the defendants in lawsuits will be required to disclose the contentions of the parties and tell the end-users of the financial statements how they can obtain further information on point.

The proposals would require disclosure of publicly available quantitative information, such as the claim amounts, other relevant non-privileged data, and in some cases filers would disclose how much they would be entitled to draw from insurance and other sources against a judgment.

This is hardly the board's first look at the issue. The FASB put out a draft in June 2008 (which only SEEMS like twenty years ago!). This draft attempts to address some of the criticisms that were levelled at that one.

Nonetheless, I'm sure this will be a bone of contention in the accounting/auditing world for a long time yet.