News Column

FASB Issues Standard to Improve Financial Reporting for Development Stage Entities

June 28, 2014

By a News Reporter-Staff News Editor at Investment Weekly News -- The Financial Accounting Standards Board (FASB) issued guidance intended to reduce the overall cost and complexity associated with financial reporting for development stage entities, without reducing the availability of relevant information.

A development stage entity is one that devotes substantially all of its efforts to establishing a new business and for which (a) planned principal operations have not commenced or (b) planned principal operations have commenced, but have produced no significant revenue. For example, many start-ups or even long-lived organizations that have not yet begun their principal operations or do not have significant revenue would be identified as development stage entities.

Current Generally Accepted Accounting Principles (GAAP) require a development stage entity to present the same basic financial statements and apply the same recognition and measurement rules as established companies. In addition, GAAP requires a development stage entity to present inception-to-date information about income statement line items, cash flows, and equity transactions.

Keywords for this news article include: Banking and Finance, Finance and Investment, Financial Service Companies, Financial Accounting Standards Board.

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Source: Investment Weekly News

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