Wednesday, January 27, 2010

Final FASB Standard Coming On Deferral Of FAS 167 For Certain Entities

At its Jan. 27, 2010 board meeting, the Financial Accounting Standards Board directed its staff to draft a final standard (Accounting Standards Update or ASU) on the deferral of FAS 167 for certain entities. Additionally, FASB discussed two projects on which it is proceeding toward issuing an Exposure Draft of a proposed standard (Proposed ASU): Financial Statement Presentation, and Insurance Contracts.

Final ASU On Deferral of FAS 167 For Certain Entities Is Coming
FASB discussed comment letters received on its proposed Accounting Standards Update (ASU), Consolidation (Topic 810): Amendments to FAS 167 For Certain Investment Funds. The objective of this project is to determine whether entities with attributes similar to those of an investment company should be evaluated for consolidation in accordance with FASB Statement No. 167, Amendments to FASB Interpretation No. 46(R) (FAS 167).

The board's redeliberation focused on four areas:
  1. Requirements for an entity to qualify for the deferral of FASB Statement No. 167, Amendments to FASB Interpretation No. 46(R)
  2. Accounting issues relating to those entities that qualify for the deferral in the proposed Update
  3. Clarification of the related-party guidance in paragraph B22 of Statement 167
  4. Clarification on whether a quantitative test should be the sole basis of the analysis in paragraph B22 for determining whether variability associated with a fee arrangement is more than insignificant.
Details of the board's decisions on the matters listed above can be found in FASB’s Summary of Board Decisions, which notes that the board authorized the staff to proceed in drafting a final ASU for vote by written ballot by the board.

Exposure Draft On Financial Statement Presentation
FASB discussed its Financial Statement Presentation project, as it proceeds toward issuing an Exposure Draft (proposed ASU), following the consideration of comments received its Discussion Paper, Preliminary Views on Financial Statement Presentation.

According to FASB's project summary (updated as of Jan. 5, 2010), FASB currently plans to release the Exposure Draft (proposed ASU) on Financial Statement Presentation in April, 2010. As this is a joint project with the IASB, the IASB also plans to issue an Exposure Draft for public comment. Details of matters discussed on Financial Statement Presentation at the January 27 board meeting can be found in FASB’s Summary of Board Decisions.

FASB Proceeding On Exposure Draft On Insurance Contracts
As detailed in FASB’s Summary of Board Decisions, FASB also discussed certain matters in its Insurance Contracts project, as it works toward developing an Exposure Draft of a proposed standard (proposed ASU) in this area.

(NOTE: FASB's project summary, updated as of Dec. 30, 2009 shows an April, 2009 expected date for the Exposure Draft to be released, although FASB's Technical Plan appears to list the Exposure Draft in the 3Q 2010 column; we will update this post when we clarify).

We will post additional observations from today's FASB board meeting in our next post.

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