Running head: PROPOSED ACCOUNTING STANDARD UPDATE 1
Proposed Accounting Standard Update
Simplifying the Classification of Debt in a Classified Balance Sheet
Ashley Allmon
Keiser University
PROPOSED ACCOUNTING STANDARD UPDATE 2
Summary
In 2014 the Financial Accounting Standards Board launched the Simplification Initiative
to simplify and improve accounting standards through several short-term projects. The objective
of this initiative was to improve areas of GAAP by reducing the cost and complexity of financial
reporting while improving the quality of information that was being reported. In 2017 one of the
short term projects included standard update proposal 2017-200. The purpose of this proposed
update was to simply how debt is classified as either current or noncurrent. The FASB received
twenty nine comment letters on this proposed update arguing that the update would make more
debts look like they were due immediately and create issues with the change to debt-to-equity
ratios. After reviewing the feedback the FASB put the proposed update on hold to conduct more
