Journal entry — FASB hosts webcast on developments related to nonpublic-entity accounting
The FASB recently held a webcast to discuss standard-setting developments applicable to nonpublic entities. The discussion focused on Private Company Council (PCC) initiatives as well as the FASB’s projects to improve not-for-profit financial reporting. Speakers also provided a broad update on FASB-IASB projects, FASB projects, and recently issued FASB Accounting Standards Updates (ASUs).
Presenters clarified the status and expected timing of several PCC-related projects. A speaker affirmed that the FASB expects to issue the private-company decision-making framework and a standard that defines a public business entity by the end of this year. Final ASUs on accounting alternatives for goodwill and interest-rate swaps are now expected to be issued in early January 2014.1 It was also clarified that an entity could early adopt these alternatives, when issued, in any interim and annual period for which financial statements are not yet issued.
Editor’s Note: Many entities have considered early adopting one or more of the PCC alternatives in their current reporting cycle (e.g., calendar 2013). The goodwill alternative has received significant attention and, because its transition requirement is prospective, entities have sought to understand what the date of transition would be if they early adopt it. The FASB is expected to clarify in the final ASU that application of the goodwill alternative generally begins on the first day of the annual period (e.g., January 1, 2013). However, it is also expected that if an entity has already issued full interim financial statements (including footnotes), the date of transition under the final ASU will be the first day of the interim period for which full interim financial statements are not yet issued.
Webcast presenters also noted that the PCC is conducting further research on the accounting alternative related to the consolidation of variable interest entities. During redeliberations, the PCC added an additional scope criterion2 to this alternative and has since received comments from constituents expressing concern about applying this criterion. Accordingly, before requesting FASB endorsement, the PCC plans to redeliberate the scope of this proposal at its January 27–28 meeting.