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FASB Task Force Meeting to Vote on U.S. GAAP Amendments

When the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“the Task Force”; “EITF”) meets next week, the group plans to vote on two proposed amendments to U.S. GAAP. The amendments to be voted on are:

  • Proposed Accounting Standards Update (ASU) No. EITF-13G, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force); and
  • Proposed ASU No. EITF-12F, Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force).

Issued in October, Proposed ASU No. EITF-13G clarifies applying hedge accounting for stock and bond offerings that contain embedded features. Proposed ASU No. EITF-12F, which was issued in April, offers organizations a broader option to utilize pushdown accounting after being acquired. Before voting takes place, the Task Force intends to consider whether the comment letters for each proposal brought forth enough issues to permit publishing another proposal for public comment.

Also at the meeting, the Task Force will discuss two EITF Issues for the first time:

  • EITF Issue No. 14-A “Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions”; and
  • EITF Issue No. 14-B “Fair Value Hierarchy Levels for Certain Investments Measured at Net Asset Value.”

EITF Issue No. 14-A relates to the calculation of the earnings per unit of a master limited partnership after the partnership is formed. As for EITF Issue No. 14-B, the Task Force is looking to agree on a technique for calculating the fair values for certain investments measured with the net asset value method often used for mutual fund shares.

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