4 August 2015
Financial Reporting Developments - Consolidated and other financial statements: Presentation and accounting for changes in ownership interests
We have updated our Financial reporting developments publication on consolidated and other financial statements to further clarify and enhance our interpretative guidance. Refer to Appendix A of the publication for a summary of the updates.
31 July 2015
Comment Letter - FASB proposal to simplify equity method accounting
In our comment letter, we supported the FASB’s objective in its simplification initiative. We agreed that the proposed amendments would simplify the initial recognition and measurement of equity method investments. However, we have concerns about the proposal to eliminate the identification of and accounting for basis differences and question whether it meets the FASB’s objective of simplifying US GAAP and, more broadly, whether the project would be better dealt with as part of a holistic review of the equity method. Consequently, we suggested, at a minimum, that the Board perform broader outreach prior to moving forward. However, we supported eliminating the requirement that an equity method investor account for an equity method investment retroactively when the investment initially qualifies for the equity method.
8 June 2015
To the Point - FASB proposes simplifying equity method accounting
The FASB proposed simplifying the equity method of accounting by eliminating the requirement that an investor identify, account for and make disclosures about the difference between its cost basis of an investment and its proportional interest in the equity of the investee (i.e., the basis difference). As a result, entities would no longer have to estimate the acquisition date fair value of an investee’s assets and liabilities to allocate basis differences. The FASB also proposed eliminating the requirement that an investor account for an equity method investment retrospectively when it increases its ownership to a level that initially qualifies for the equity method. Comments are due by 4 August 2015.
23 April 2015
Technical Line - Consolidation considerations for asset managers - FIN 46(R) to ASU 2015-02
Our Technical Line publication takes a closer look at how entities will be affected by Accounting Standards Update (ASU) 2015-02, Amendments to the Consolidation Analysis, which eliminates the deferral of FAS 167 and makes changes to both the variable interest model and the voting model. This publication highlights what will change for reporting entities that currently evaluate entities for consolidation under FIN 46 (R).
23 April 2015
Technical Line - New consolidation guidance will require many entities to re-evaluate their conclusions
Our Technical Line publication takes a closer look at how entities will be affected by Accounting Standards Update (ASU) 2015-02, Amendments to the Consolidation Analysis, which eliminates the deferral of FAS 167 and makes changes to both the variable interest model and the voting model. While the ASU is aimed at asset managers, it could affect all entities. This publication highlights what will change for reporting entities that currently evaluate entities for consolidation under FAS 167.
19 February 2015
To the Point - New consolidation guidance will affect entities in all industries
The FASB issued final guidance that eliminates the deferral of FAS 167, which has allowed reporting entities with interests in certain investment funds to follow the previous consolidation guidance in FIN 46(R), and makes changes to both the variable interest model and the voting model. While the guidance is aimed at asset managers, it will affect all reporting entities involved with limited partnerships or similar entities. In some cases, consolidation conclusions will change. In other cases, reporting entities will need to provide additional disclosures about entities that currently aren’t considered VIEs but will be considered VIEs under the new guidance. Regardless of whether conclusions change or additional disclosure requirements are triggered, reporting entities will need to re-evaluate limited partnerships and similar entities for consolidation and revise their documentation.
17 February 2015
Comment Letter - FASB proposal to increase transparency about an investment company’s investments in other investment companies
In our comment letter, we supported the Board’s efforts to increase transparency about an investment company’s investments in other investment companies by improving the existing disclosure requirements under Accounting Standards Codification 946, Financial Services - Investment Companies. However, we raised concerns about the operability and auditability of the proposed amendments.
18 September 2014
Financial Reporting Developments - Equity method investments
We have updated our Financial Reporting Developments publication on equity method investments to reflect the issuance of Accounting Standards Update (ASU) No. 2014-01, Accounting for Investments in Qualified Affordable Housing Projects, as well as ASU No. 2014-02, Accounting for Goodwill, a consensus of the Private Company Council. See Appendix F for more detail on other updates to this publication.
15 September 2014
Financial Reporting Developments - Consolidation and the Variable Interest Model: Determination of a controlling financial interest
We have updated our Financial reporting developments publication, Consolidation and the Variable Interest Model, for recent standard-setting activities and provided further clarifications and enhancements to our interpretative guidance. Refer to Appendix I of the publication for a list of these updates.
7 August 2014
To the Point - FASB provides a measurement alternative for consolidated CFEs
The FASB issued guidance today that allows a reporting entity to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity (CFE) using the fair value of either the CFE’s financial assets or financial liabilities, whichever is more observable. The guidance is aimed at eliminating the measurement difference that sometimes arises when a CFE’s financial assets and financial liabilities are independently measured at fair value. The guidance will likely change practice even for entities that don’t elect the alternative.
10 April 2014
Technical Line - Private companies in common control leasing arrangements may be eligible for relief from VIE model
Our Technical Line discusses new guidance from the FASB that provides an exemption for private companies from evaluating lessors in common control leasing arrangements for consolidation under the variable interest entities (VIE) guidance, if they meet certain criteria. Private companies that elect the alternative still need to apply other consolidation guidance and other US GAAP (e.g., lease accounting) to these arrangements and make certain disclosures.
10 June 2013
To the Point - Investment company guidance is final
The FASB issued final guidance requiring an entity to have certain fundamental characteristics and to consider other typical characteristics to qualify as an investment company. The new guidance does not address disclosures about an investment in another investment company or issues related to the applicability of investment company accounting for real estate entities and the measurement of real estate investments. Our To the Point publication tells you what you need to know about the guidance.
6 September 2012
To the Point - Redefining investment company accounting – again
The FASB has made significant changes to its investment company proposal in redeliberations. Our To the Point publication tells you what you need to know about how the proposal has changed.
10 May 2012
Practical matters for the c-suite - Would the redefinition of investment companies affect you?
Our new edition of Practical matters for the c-suite complements our Technical Line and To the Point publications on the FASB’s exposure draft on investment companies and explores in more detail how the proposal would affect an organization’s finance, tax and business processes. The Practical matters for the c-suite series is produced by our Financial Accounting Advisory Services (FAAS) group and is intended to help companies assess the potential effects of accounting proposals on their organizations.
28 February 2012
Practical matters for the c-suite - To consolidate or not to consolidate - that is the question
The latest edition of our FAAS thought leadership series, Practical matters for the c-suite, To consolidate or not to consolidate - that is the question, is aimed at c-suite and board-level contacts at both Channel 1 and Channel 2 clients to help them understand the FASB’s exposure draft on consolidation accounting.
3 November 2011
Master limited partnership accounting and reporting guide
Our Master limited partnership accounting and reporting guide covers a variety of common accounting and reporting considerations associated with the formation and ongoing operations of an MLP.
21 October 2011
To the Point - Redefining investment companies and how they account for investments
The FASB issued an exposure draft that redefines an investment company and how it accounts for investments. The proposed definition may appear similar to current US GAAP, but there are some important differences. Some of the proposed changes to the definition and accounting could result in significant changes in practice for certain entities. Our To the Point publication summarizes what you need to know about the proposal.
20 October 2011
Technical Line - A quick guide to understanding the Variable Interest Model and eight common misconceptions
Two years after the FASB revised its complex Variable Interest Model, we continue to see several common misconceptions. By describing the model and highlighting common misconceptions, we hope to help you navigate through the complexity. Our Technical Line is adapted from our Financial reporting developments publication, Consolidation of variable interest entities.
13 May 2011
To the Point - Key differences between IASB's new consolidation guidance and US GAAP
The IASB issued new consolidation accounting guidance establishing a single consolidation model for all entities. While consolidation accounting was once a joint project, the FASB will not issue consolidation guidance similar to the IASB’s guidance at this time. Our To the Point discusses key differences between the models.
26 February 2010
Hot Topic - FASB Issues ASU 2010-10 to defer Statement 167 for certain investment funds
The ASU addresses concerns with the application of Statement 167’s consolidation guidance by reporting enterprises in the asset management industry. ASU 2010-10 defers the effective date of the consolidation guidance of Statement 167 for certain investment funds. Our Hot Topic provides additional detail about the final ASU.
29 January 2010
Hot Topic - FASB approves deferral of Statement 167 for certain investment funds
Our Hot Topic provides a brief description of the more significant issues addressed at the 27 January 2010 meeting. At this meeting, FASB members discussed several constituent issues regarding the proposed ASU to amend the effective date of FASB Statement 167 for certain entities.
8 January 2010
Hot Topic - FASB issues ASU on accounting for decreases in ownership of a subsidiary
Our Hot Topic provides a summary of the FASB proposal that addresses implementation issues associated with the provisions of Statement 160 relating to the accounting for decreases in the ownership a subsidiary.
4 December 2009
Hot Topic - FASB issues proposed ASU to defer Statement 167 for certain investment funds and amend other provisions
Our Hot Topic summarizes the FASB's recently issued proposal that addresses concerns with the application of Statement 167 in the asset management industry by proposing to defer the effective date of Statement 167 for certain investment funds. As currently written, Statement 167 may result in asset managers consolidating many hedge funds, private equity funds and other investment funds that they manage.
1 December 2009
FASB Statement No. 167: Internal control considerations
Our publication provides internal control considerations as management considers the implications of the adoption of Statement 167 on its internal control over financial reporting.
11 November 2009
Hot Topic - FASB proposes to defer Statement 167 for asset management funds
The FASB voted to expose for comment an amendment that would defer the application of Statement 167 for a limited number of entities (principally mutual funds, private equity funds and hedge funds) until the completion of the joint FASB/IASB project on consolidation accounting. The FASB intends for the deferral to apply only in instances in which certain conditions are met, as discussed in more detail in our Hot Topic.
25 September 2009
Comment Letter - Proposed ASU, "Accounting and Reporting for Decreases in Ownership of a Subsidiary-a Scope Clarification"
This comment letter expresses our views on the FASB's proposal on consolidation scope.
2 September 2009
Hot Topic - FASB issues proposal on consolidation scope
Our Hot Topic summarizes the FASB's proposal on implementation issues associated with the provisions of Statement 160 related the accounting for decreases in the ownership of a subsidiary.
31 July 2009
Technical Line - Amendments to FIN 46(R)
Our Technical Line summarizes the amendments to FIN 46(R) related to the consolidation of variable interest entities (VIEs).
12 June 2009
Hot Topic - FASB issues Statement 167 amending FIN 46(R)
Our Hot Topic summarizes FASB Statement 167 to address the effects of eliminating the qualifying special-purpose entity (QSPE) concept from FASB Statement No. 140.
11 February 2009
Hot Topic - IASB issues exposure draft on consolidated financial statements
Our Hot Topic summarizes the IASB's proposal on consolidation. The main objectives of the proposal are to improve the definition of control and related application guidance so that a control-based model can be applied to all entities and to enhance the disclosure requirements for consolidated and unconsolidated entities.
6 January 2009
Comment Letter - Proposed Accounting Standards Update, "Amendments to Statement 167 for Certain Investment Funds"
This comment letter provides our views on the FASB's proposal to defer FAS 167 for certain entities.
12 December 2008
Hot Topic - EITF 08-6-Equity method investment accounting considerations
Our Hot Topic discusses the provisions of EITF 08-6. EITF 08-6 was issued to address questions regarding the application of the equity method subsequent to the issuance of FAS 141R and FAS 160.
30 October 2008
Comment Letter - Proposed Amendment to FIN 46(R) - Consolidation of variable interest entities
This comment letter provides our views on the FASB's proposed amendment to FIN 46(R) on consolidation of variable interest entities.
17 September 2008
Hot Topic - Summary of proposed amendment to FIN 46( R)
Our Hot Topic summarizes the FASB's proposal to amend Statement FIN 46(R). The proposal responds to concerns over the transparency of entities' involvement with variable interest entities and the overly complex nature of the VIE model.
15 May 2008
Hot Topic - Potential Amendment to FIN 46 ( R)
Our Hot Topic focuses on the FASB's discussions with regard to amending FIN 46(R) on variable interest entities.