FASB continues to work on Topic 450, a short-hand term accounting and disclosure issues for contingent liabilities, such as risks from tort litigation. Click here to go to the detailed FASB website page on Topic 450.

Topic 450 is the successor to prior proposals in this area. The topics continue to produce disputes. Groups and newspapers opposed to the disclosure proposals characterize them  as providing breadcrumbs to plaintiff’s lawyers seeking grist for lawsuits, as illustrated by this Wall Street Journal editorial. On the other hand, as the WSJ acknowledged:

 "FASB says it is only undertaking this effort after receiving "strong and extensive input" from "investors who want greater transparency." But as the U.S. Chamber of Commerce has pointed out in a letter to FASB, the accounting board has declined to reveal "which investors—or even which categories of investors—were consulted." The likely sources are union pension funds that have since the derivative lawsuit reform of the 1990s become major abettors of lawsuits against business."  

The current staus of the process is summarized in this article from CFO.com.  Set out below are  two key paragraphs from the August 17  article by Marie Leone:

"Most of the controversy centers on the detailed table information that is required to explain any contingencies arising from potential and ongoing lawsuits. The thinking is that revealing this kind of information would make it difficult for companies to defend themselves, infringe on attorney-client privilege, and require companies to disclose nonpublic information that could be used by plaintiffs’ lawyers to file additional lawsuits.

For example, the draft rule requires that companies disclose details about insurance coverage bought to protect them against losing a lawsuit, as well as the ordinarily confidential estimates of "average settlement amounts" related to suits. The proposal also requires companies to disclose any reputable scientific studies that indicate a potential significant hazard related to a company’s product or operation. This disclosure, says the Chamber, essentially advertises a company’s "potential vulnerability to an entire category of lawsuits, none of which have yet been asserted.""