NEW YORK - The Wall Street Journal recently released an article stating that there are big changes coming in the way that financial statements are going to be presented to investors, potential investors, customers and staff as well in order to make them more understandable.
"We have a major project with the Financial Accounting Standards Board in the United States (FASB). The idea, really, is that internationally we agree on what exactly should be contained in financial statements, in the cash flow statement, the income statement and the balance sheet,"Chairman of the International Accounting Standards Board (IASB) noted in an interview with MONEYWEB radio station on May 17, 2007.
During the interview, Tweedie discussed issues related to the new format of the financial statements.
Addressing the issue of the new format of the financial statement is vital now since the International Standards which IASB inherited are very vague as far as it comes to the contents of the financial statements.
"We are currently working on a discussion paper, which will have various options, but to look at how we can make it more clear to investors, how do we sort categories of various parts of income - for example, operating income," Tweedie added.
In regards to the new-look of the financial statements, he noted that it will take about two or three years to be concluded.
“The reason I said that is we always go through what we call a due process. The document we'll put out will have various arguments, with various ways of doing this,” he continued.
“And we will give the international communities four months or so to come back to us. Then we sort of pick up these comments and draft them into a draft rule. Well, that usually takes at least a year. By that time we've had more consultations, and then of course we have comments on the draft rule, and then the final rule. So that's why I think it will take two to three years from now,” Tweedie concluded.