What types of events and trends need to be disclosed?
Natural disasters, rising energy prices, increasing interest rates and risks of inflation, pending pension legislation, changes in tax laws, labor unrest over benefit cutbacks, and product safety concerns are all examples of events and trends that can affect accounting estimates and result in risks and uncertainties that may need to be disclosed. The specific disclosure requirements reside in various places in the accounting and SEC literature. In addition, AICPA Statement of Position (SOP) No. 94-6, Disclosure of Certain Significant Risks and Uncertainties, provides a basic framework for footnote disclosures not specifically required in other parts of GAAP. Among other things, the SOP requires disclosures in the following areas: • Uncertainties about changes in estimates. Disclosures are required about an accounting estimate if it is at least reasonably possible that the estimate will change in the near term and the effect of the change will be material to the financial statements. •
