Nonfinancial Asset Derecognition Guidance Update Issued
Phase 2 of the Financial Accounting Standards Board’s (“FASB”) three-phase project to clarify the definition of a “business” is officially underway. Last week, the FASB issued Proposed Accounting Standards Update, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which aims to simplify the guidance for nonfinancial asset recognition. The proposed changes include clarifying the scope of Subtopic 610-210 and partial sales of nonfinancial assets, and improving consistency on what is considered an “in substance nonfinancial asset.” Comments on the. Read More.
Decisions Reached on Accounting for Partial Sales of Nonfinancial Assets
The Financial Accounting Standards Board (“FASB”) recently reviewed the project on clarifying the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, which is part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). During its February 17th meeting, the FASB decided not to offer explicit guidance regarding the sales of undivided interests in Subtopic 610-20. The FASB also decided to maintain consistency with Topic 606 and require the assessment of control to be reviewed from the counterparty’s perspective. For transition purposes, the FASB decided that Subtopic 610-20 will go into. Read More.