AccountingLink

    Consolidation

    6 December 2018

    Financial Reporting Developments - Consolidation: Determination of a controlling financial interest and accounting for changes in ownership interests
    Our FRD publication on consolidation has been updated to clarify certain guidance on how to apply the consolidation models in ASC 810. Refer to Appendix C of the publication for a summary of the updates.

    5 November 2018

    To the Point - FASB makes targeted changes to related party consolidation guidance
    The FASB issued final guidance to allow private companies to make an accounting policy election to not apply the variable interest entity guidance to certain arrangements between entities under common control in which the reporting entity, the legal entity being evaluated for consolidation and the common control parent are not public business entities. In addition, the FASB amended the variable interest entity guidance to require an entity to consider a decision maker's indirect interests held through related parties under common control on a proportionate basis when determining whether decision-making fees are variable interests. For entities other than private companies, the guidance is effective for fiscal years beginning after 15 December 2019, and interim periods within those years. For private companies, it is effective for fiscal years beginning after 15 December 2020, and interim periods within fiscal years beginning after 15 December 2021. Early adoption is permitted.

    14 June 2018

    Financial Reporting Developments - Equity method investments and joint ventures
    Our FRD publication on equity method investments and joint ventures has been updated. See Appendix C for a summary of important changes.

    30 November 2017

    Comment Letter - FASB’s proposed consolidation reorganization
    In our comment letter, we support the FASB’s objective of making the consolidation guidance easier to navigate and apply but continue to recommend that the Board pursue the development of a single comprehensive consolidation model. If the FASB moves forward with the proposed ASU, it should provide a concordance, mapping the changes from ASC 810 to ASC 812 and any changes to the original wording. This would make it less costly for companies to implement the proposed changes. Further, we recommend that the Board allow for prospective adoption and that the guidance be effective after all companies adopt ASU 2015-02, ASU 2016-17 and ASU 2017-02.

    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.

    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.