ASC 255
Active
Changing Prices
Addresses supplementary information showing the effects of changing prices on financial statements; largely dormant with voluntary requirements since SFAS 89 (1986).
1
What ASC 255 Originally Addressed
The changing-prices disclosure requirement
ASC 255 traces back to SFAS 33 (1979), issued during a period of high US inflation, which REQUIRED large public companies to disclose SUPPLEMENTARY information showing the effects of CHANGING PRICES on their financial statements – specifically, CONSTANT PURCHASING POWER (general price-level) restatements and CURRENT COST (specific price-level) restatements of items such as inventory, PP&E, and cost of sales, alongside conventional historical-cost figures.
2
Why It Faded – And Why It's Not Formally Withdrawn
The voluntary transition and its aftermath
As US inflation subsided through the mid-1980s and the significant cost of preparing these supplementary disclosures became hard to justify against their diminishing usefulness, the FASB issued SFAS 89 (1986), which made the specific numerical disclosures VOLUNTARY rather than mandatory. In practice, essentially NO preparers continued voluntarily providing this information once it was no longer required, and the disclosures fell out of use entirely. Unlike a withdrawn SIC or IFRIC, ASC 255 was never formally rescinded – it remains a placeholder Topic in the Codification, but with essentially no live, actively-applied content today.
3
Where This Stands Today and the IFRS Comparison
A dormant Topic with no active IFRS equivalent
DimensionDetail
Current statusTechnically still part of the Codification (Topic 255), but its substantive disclosures are voluntary and virtually never provided in practice
Why it hasn't been fully removedThe Codification generally retains topics unless a specific ASU formally supersedes them; changing-price disclosure was never technically prohibited, only made optional, so the Topic persists as an inactive shell
IFRS comparisonIAS 29 (Financial Reporting in Hyperinflationary Economies) remains an ACTIVE, mandatory IFRS standard – but it applies only to entities whose FUNCTIONAL currency is hyperinflationary, a narrow and specific trigger, unlike ASC 255's broader (and now dormant) general price-change disclosure concept. There is no current, general-purpose IFRS equivalent to ASC 255's original supplementary constant-purchasing-power/current-cost disclosure concept for NON-hyperinflationary economies either – both frameworks have effectively moved away from general inflation-adjusted supplementary reporting for ordinary (non-hyperinflationary) economies.
Constant purchasing power
A general price-level restatement approach adjusting financial statement amounts for changes in a broad price index (e.g. CPI), reflecting the erosion of purchasing power due to inflation.
Current cost
A specific price-level restatement approach adjusting assets and expenses to their current replacement cost at the balance sheet date, reflecting the effect of individual price changes rather than a general price index.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows