FASB Seeks to Align Accounting Guidance Between Asset Acquisition and Business Combinations
There’s an effort underway by the Financial Accounting Standards Board (“FASB”) to look at closing the gap between the accounting standards for business combinations and the accounting standards for acquisition accounting. Because these two sets of accounting guidance are different, businesses are sometimes motivated to structure merger and acquisition (“M&A”) deals in ways that avoid complex accounting. Decreasing the differences between these standards could help make M&A activity more straightforward in the future. This effort is also a continuation of the FASB’s work to more clearly define what a business is for U.S. generally accepted accounting principles (“GAAP”). Some critics. Read More.
New GASB Statement on Leases Issued
The Governmental Accounting Standards Board (“GASB”) has issued a new single model to help state and local governments report leasing agreements. GASB Statement (“GASBS”) No. 87, Leases, categorizes leases as financing arrangements that allow customers to use the leased asset. Per the standard, governments that act as lessees must report a liability for the contract, as well as report an intangible asset indicating their ability to use the leased item. For government entities that are lessors, they must disclose a receivable for the lease and a deferred inflow of resources. Nonfinancial assets such as vehicles, heavy equipment, and property are. Read More.
Nonfinancial Assets Guidance to Coincide with FASB Revenue Standard
The Financial Accounting Standards Board’s (“FASB”) latest Accounting Standards Update (“ASU”) clarifies guidance to help determine when gains and losses on nonfinancial assets should be recognized. Issued as ASU No. 2017-05, 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, the amendments clarify the term “in substance nonfinancial asset” to inform financial reporting professionals which transactions are part of the nonfinancial asset derecognition guidance. The FASB had failed to define the term in ASU No. 2014-09, Revenue From Contracts With Customers (Topic. Read More.
Topics: Accounting Standards Update "ASU", Derecognition of Nonfinancial Assets (Subtopic 610-20), FASB, Financial Accounting Standards Board "FASB", Nonfinancial Assets, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, Transfers & Servicing
FASB Approves Nonfinancial Assets Guidance Proposal
The Financial Accounting Standards Board (“FASB”) recently approved most of the planned changes to its accounting guidance for sales and disposals of nonfinancial assets. Outlined in Proposed Accounting Standards Update No. 2016-250, 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, the proposed amendments are part of the FASB’s wider efforts to help companies differentiate between a business acquisition or sale and the acquisition or sale of a group of assets. The FASB confirmed the proposal’s main principle, which requires. Read More.