Canadian companies with operations in the U.S. are bracing for a new accounting rule put forward by the Financial Accountings Standards Board (FASB). Scheduled to go into effect before year’s end, the new rule requires companies with U.S. operations to disclose all pending lawsuits. Regardless of the suit’s merits, companies must estimate both the amount and timing of potential settlements.

 

According to this article in the Globe and Mail, public issuers have criticized the change over concerns that the additional disclosure could potentially provide plaintiffs with unfair insights into their expectations around any pending litigation.