FASB Proposes Reorganizing Consolidation Guidance
To address concerns over the organization of the guidance under Topic 810, Consolidation, the Financial Accounting Standards Board (“FASB”) recently issued Proposed Accounting Standards Update, Consolidation (Topic 812): Reorganization. The proposal reorganizes certain components within the FASB’s consolidation guidance and includes for illustrative purposes the amendments under the Proposed Accounting Standards Update, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The FASB would reorganize the consolidation guidance under Topic 810 into a new Topic featuring the following two Subtopics for variable interest entities and voting interest entities: Subtopic 812-20, Consolidation—Variable Interest Entities Subtopic 812-30, Consolidation—Voting. Read More.
FASB Proposes Simplified Standard for Consolidated Reporting
A proposal to streamline guidance for voting interest entities and variable interest entities is coming this summer. At their June 21 meeting, Financial Accounting Standards Board (“FASB”) members unanimously approved the proposal that would put the aforementioned guidance in Topic 810, Consolidation, in a separate accounting standard. Designated as Topic 812, the new accounting standard would eliminate Topic 810 and organize voting interest entities and variable interest entities into subtopics. The reorganization assumes that once a company decides to follow the voting interest entities or variable interest entities accounting guidance, the company could go directly to the needed category. The. Read More.
Consolidation Amendments Proposed to Help Private Companies
Giving private companies an easier way to apply its guidance for consolidation reporting, the Financial Accounting Standards Board (“FASB”) has issued Proposed Accounting Standards Update No. 2017-240, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The proposed changes to Accounting Standards Codification 810, Consolidation, exempts private companies from using guidance on variable interest entities for certain common control lease arrangements and related legal structures. Instead, private companies must use an accounting policy alternative for other businesses under common control that follow the same criteria. Only some common control arrangements, however, would qualify for the alternative. The. Read More.
Private Companies Could Be Exempt From Guidance in Consolidation Standard
The Financial Accounting Standards Board (“FASB”) has agreed to issue a proposal exempting private companies under common control from the variable interest entity (“VIE”) guidance in Topic 810, Consolidation. Announced last week, the proposal is part of the board’s efforts to simplify the guidance under Topic 810, which helps companies decide when they must consolidate, or disclose on balance sheets, their holdings in other entities. Changes to be proposed include requiring private companies to provide thorough disclosures that explain their involvement with, and exposure to, the affiliate. Along with private companies’ exemption from the VIE model, the FASB is expected. Read More.
FASB Consolidation Guidance Could Be Split Up
In a unanimous decision last week, Financial Accounting Standards Board (“FASB”) members agreed to propose splitting its consolidation guidance in two. The FASB wants to remove the guidance regarding voting interest entities and variable interest entities under Topic 810, Consolidation, and add it to a new standard called Topic 812. FASB members noted that the separation would make consolidation guidance easier for companies to follow and would conform to how Big Four firms produce their own manuals for accountants to consult. The March 8 decision was part of the board’s work to simplify certain aspects of Topic 810, which defines. Read More.
Private Company Council, FASB Members Meet to Discuss Projects
Private Company Council (“PCC”) members gathered Tuesday to discuss the Financial Accounting Standards Board’s (“FASB”) ongoing projects. With FASB staff members also on hand to provide updates, the PCC provided feedback on the following matters: Financial instruments—hedge accounting. During talks on the FASB’s effort to simplify hedge accounting, the PCC asked the FASB to make a decision on whether to offer an exception for private companies when fulfilling their hedge documentation and effectiveness testing requirements. Consolidation reorganization and improvements. Several PCC members still want private companies under common control to be exempt from the variable interest entity guidance under Topic. Read More.
Topics: Consolidation (Topic 810), F, Financial Accounting Standards Board "FASB", Hedge Accounting, PCC Decision Making Framework Guide, Private companies, Private Company Council "PCC", Variable Interest Entity "VIE"