The world’s leading accounting standards setters, the International Accounting Standards Board and the U.S. Financial Accounting Standards Board, published a discussion paper on financial statement presentation today.

The paper contains an analysis of the current issues in financial statement presentation and presents the boards’ initial thinking on how those issues could be addressed in a possible future format. They note that the existing standards provide only limited presentation guidance. In addition, presentation guidelines in U.S. GAAP are dispersed across standards. Moreover, users of financial statements have often expressed dissatisfaction that information is not linked across the different statements and that dissimilar items are in some cases aggregated in one number, they report.

To address these issues the IASB and the FASB propose to introduce “cohesiveness” and “disaggregation” as the two main objectives for financial statement presentation. Cohesiveness would ensure that a reader of financial statements can follow the flow of information through the different statements of an entity; disaggregation would ensure that items that respond differently to economic events are shown separately, they explain.

“The credit crisis has highlighted the need for clear presentation of financial information that is often complex,” said Sir David Tweedie, chairman of the IASB. “Early staff drafts of the paper that included an option to eliminate the ‘net income’ line were widely reported. However, the boards have chosen to proceed with proposals that build on established practice. If you have an interest in the future presentation of financial information, now is the time to get involved.”

The paper is open for comment until April 14, 2009.