AccountingLink

    Consolidation

    26 October 2017

    Financial Reporting Developments - Equity method investments and joint ventures
    Our FRD publication on equity method investments and joint ventures has been updated to reflect the issuance of ASU 2017-05 on accounting for the derecognition of nonfinancial assets and in substance nonfinancial assets and ASU 2016-01 on recognizing and measuring financial instruments. The updated FRD also clarifies and enhances our interpretive guidance. Refer to Appendix C of the publication for a summary of the changes.

    28 September 2017

    Financial Reporting Developments - Consolidation: Determination of a controlling financial interest and accounting for changes in ownership interests
    We have updated our Financial reporting developments (FRD) publication on consolidation to include recent standard-setting activity related to the evaluation of indirect interests as part of the primary beneficiary analysis, the application of the voting model for not-for-profit entities and gains and losses from the derecogintion of nonfinancial assets, and to clarify and enhance our interpretive guidance.

    31 August 2017

    Comment Letter - FASB proposal for targeted improvements to related party guidance for Variable Interest Entities (VIE)
    In our comment letter, we support the FASB’s objective of reducing complexity when applying the variable interest entity (VIE) guidance, but recommend they pursue development of a single comprehensive consolidation model. To the extent they move forward with the targeted improvements, we believe the FASB should provide additional guidance to clarify the current model, which would reduce the cost and complexity for all companies. Further, we support the proposed changes in the determination of whether fees paid to decision makers or service providers are a variable interest.

    29 June 2017

    To the Point - The FASB proposes more changes to the consolidation guidance
    The FASB proposed more changes to the consolidation guidance, including allowing private companies to make an accounting policy election to not apply the variable interest entity (VIE) guidance for certain common control arrangements. It also proposed changing two aspects of the VIE model for related party groups. Comments are due by 5 September 2017.

    7 February 2017

    Master limited partnership accounting and reporting guide – February 2017
    Our Master limited partnership accounting and reporting guide, which is designed to help readers understand common accounting and reporting issues associated with the formation and operation of a master limited partnership, has been updated.

    19 January 2017

    To the Point - FASB retains consolidation guidance for NFP general partners of for-profit limited partnerships
    The FASB issued new guidance that retains the presumption that a not-for-profit (NFP) entity that is a general partner of a for-profit limited partnership or similar entity controls the entity, unless that presumption can be overcome. The FASB also clarified that NFP entities (other than business-oriented health care entities) with investments in certain for-profit entities may continue to elect to measure those investments at fair value.

    27 October 2016

    To the Point - New VIE guidance on evaluating indirect interests held by related parties under common control
    The FASB changed how a single decision maker or service provider considers indirect interests held by related parties under common control when applying the consolidation guidance on determining whether it is the primary beneficiary of a variable interest entity (VIE) under the VIE Model. The new guidance is effective for public entities for annual periods beginning after 15 December 2016.

    3 October 2016

    Comment Letter - FASB’s proposal to retain the consolidation guidance for NFP general partners in for-profit limited partnerships
    In our comment letter, we supported the FASB’s proposal to retain the consolidation guidance in ASC 810-20 requiring a not-for-profit entity that is a general partner in a for-profit limited partnership or similar entity to presume that it controls the entity, unless that presumption can be overcome. We also supported the FASB’s proposed clarification that not-for-profit entities (other than business-oriented health care entities) with investments in certain for-profit entities may continue to elect to measure those investments at fair value, and we offered suggestions on how the FASB could further clarify its intent.

    25 July 2016

    Comment Letter - FASB proposal on evaluating interests held under common control in the Variable Interest Entity (VIE) Model
    In our comment letter, we supported the FASB’s objective of changing how a single decision maker or service provider considers indirect interests when applying the consolidation guidance on determining whether it is the primary beneficiary of a VIE under the VIE model. However, we raised concerns about the clarity of the VIE model, particularly the primary beneficiary guidance, when the evaluation includes entities under common control.

    29 June 2016

    To the Point - VIE guidance on evaluating indirect interests held by related parties under common control may change
    The FASB proposed changing how a single decision maker or service provider considers indirect interests held by related parties under common control when applying the consolidation guidance on determining whether it is the primary beneficiary of a variable interest entity (VIE) under the VIE Model. Comments are due by 25 July 2016.

    12 April 2016

    Technical Line - The effects of the new consolidation guidance on real estate entities
    Our publication takes a closer look at how real estate entities are affected by ASU 2015-02, Amendments to the Consolidation Analysis, which changed both the variable interest model and the voting model. These changes mean that all real estate entities have to re-evaluate entities for consolidation and revise their documentation. Consolidation conclusions may change in some cases, while in other instances, additional disclosures must be provided about entities that are considered variable interest entities under the new guidance.

    15 September 2014

    Financial Reporting Developments - Consolidation and the Variable Interest Model: Determination of a controlling financial interest (prior to the adoption of ASU 2015-02, Amendments to the Consolidation Analysis)
    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.