This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

FASB issues proposals on consolidations and foreign currency matters

  • FASB (US Financial Accounting Standards Board) Image

Oct 11, 2012

The FASB has issued two proposed Accounting Standards Updates (ASUs): "Consolidation (Topic 810): Accounting for the Difference between the Fair Value of the Assets and the Fair Value of the Liabilities of a Consolidated Collateralized Financing Entity (a consensus of the FASB Emerging Issues Task Force)" and "Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)."

The objective of proposed ASU Consolidation (Topic 810) is “to resolve the diversity in practice in the accounting by a reporting entity for the difference between the fair value of the financial assets and the fair value of the financial liabilities of a consolidated collateralized financing entity and to arrive at the amount a reporting entity would ultimately expect to realize.” Currently, IFRSs do not have any specific guidance on collateralized financing entities.

The objective of proposed ASU Foreign Currency Matters (Topic 830) is “to resolve the diversity in practice about whether Subtopic 810-10, Consolidation — Overall, or Subtopic 830-30, Foreign Currency Matters — Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a consolidated foreign entity.” The amendments proposed in this exposure draft do not eliminate any of the existing differences between U.S. GAAP and IFRSs.

Comments were due by December 12, 2012.

Background information on the consensuses reached at FASB Emerging Issues Task Force meeting are available in Deloitte's EITF Snapshot newsletter.

Click for (links to the FASB's Web site):

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.