FASB Discusses Impairment Model Project
At its meeting two weeks ago, the Financial Accounting Standards Board (“FASB”) discussed one of unresolved issues from Proposed Accounting Standards Update No. 2013-220, Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. The issue in question was the requirement for recording equity method investments. Per the proposal, equity method investments would go through a one-step test before being marked down. However, the approach was questioned in comment letters, and FASB has contemplated whether to drop the provision or create an alternative approach.
Another issue covered in the meeting was the project to streamline income tax reporting. Part of FASB’s simplification efforts include eliminating the prohibition in Topic 740, Income Taxes, in contrast to identifying a deferred tax asset for the intracompany variance between the tax basis of the assets in a buyer’s tax jurisdiction and their cost as stated in the combined financial statements. FASB is also pondering removing the difference between tax credits for the present fiscal year and credits that carry over into future years.
We will provide further details on this meeting in a future blog post. In the meantime, visit Cherry Bekaert’s Financial Services industry page on how our team can guide your business forward.