FAF, FASB React To SEC Statement On Global Accounting Stds.; FASB Releases ASU 2010-10, Defers FAS 167 For Certain Investment Funds

The Financial Accounting Foundation and the Financial Accounting Standards Board issued a statement today in reaction to the SEC's Commission Statement in Support of Convergence and Global Accounting Standards, issued on Wednesday.

The FAF and FASB state that they "support the SEC’s view that a single set of high-quality globally accepted accounting standards will benefit U.S. investors, "and "support the SEC’s further consideration of the issues identified in the [SEC's] 'Work Plan' in making its determination on whether and how to transition the current financial reporting system for U.S. issuers to a system incorporating International Financial Reporting Standards (IFRS)." Additionally, they state, "As the FASB aims to complete in 2011 the important projects identified in our MoU with the IASB, we expect 2010 to be a pivotal year of progress... The FASB will continue to address reporting issues of critical importance to U.S. investors and financial markets while pursuing the international standard setting agenda." For futher details, read the FAF-FASB statement.

See also our related posts: FEI Recommends Three-Year Implementation Period For Suite of New Standards Coming Under FASB-IASB MOU; SEC Reaffirms - Contingent on 'Work Plan' and Convergence - Will Decide On IFRS In 2011; FEI, Other Organizations React To SEC Statement On IFRS

FASB Releases ASU 2010-10, Defers FAS 167 For Certain Investment Funds
On Feb. 25, FASB issued Accounting Standards Update No. 2010-10, "Consolidation (Topic 810): Amendments for Certain Investment Funds." (ASU 2010-10).

As described in an Action Alert sent by FASB on February 26: "Accounting Standards Update No. 2010-10 defers the effective date of the amendments to the consolidation requirements made by FASB Statement 167 [Amendment to FIN 46R] to a reporting entity’s interest in certain types of entities. The Update also clarifies other aspects of the Statement 167 amendments..... For many reporting entities (in particular, calendar year companies) these amendments are effective immediately."

Here are some excerpts from the ASU:

Accounting Guidance: "The amendments to the consolidation requirements of Topic 810 resulting from the issuance of Statement 167 are deferred for a reporting entity’s interest in an entity (1) that has all the attributes of an investment company or (2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies. The deferral does not apply in situations in which a reporting entity has the explicit or implicit obligation to fund losses of an entity that could potentially be significant to the entity. The deferral also does not apply to interests in securitization entities, asset-backed financing entities, or entities formerly considered qualifying special purpose entities...."

Disclosures: "The amendments in this Update do not defer the disclosure requirements in the Statement 167 amendments to Topic 810..."

Refer to ASU 2010-10 for full details.

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In case you missed our earlier post on Friday: Blue Ribbon Panel Named - To Address Private Company Accounting

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