FASB proposed a new Accounting Standards Update (ASU) on Dec. 20 intended to help investors and other financial statement users better consider the effects of supplier finance programs on a buyer’s working capital, liquidity and cash flows.
The proposed ASU would affect buyers who use supplier finance programs in connection with the purchase of goods and services. According to FASB, the proposed amendments would improve financial reporting by requiring new disclosures about the programs.
The comment deadline for the proposed ASU is March 21.