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FASB discusses consolidation, investment companies, and NFP financial statements

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Oct 25, 2013

At its meetings on October 23–24, 2013, the FASB continued its discussion of three projects: consolidation (principal vs. agent analysis), investment companies (disclosures about investments in another investment company), and not-for-profit financial reporting (financial statements).

In its discussion of the consolidation project, the Board decided to exclude from the scope of ASC 810, Consolidation, an entity’s interest in a fund that is required to operate and does operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

The Board voted to proceed to an exposure draft on its project on disclosures about investments in another investment company. Under the proposal, an investment company would disclose its share of the dollar amounts of management fees and incentive fees paid by the investee fund and its share of income or loss from its investment in the investee fund.

The FASB also made tentative decisions on how to improve the statement of cash flows for not-for-profit entities.

For more information on the decisions reached during this meeting, click on the links below:

  • Deloitte's October 24, 2013, Accounting Journal Entry: Consolidation — FASB discusses scope exception for money market funds.
  • Deloitte's October 24, 2013, Accounting Journal Entry: Investment companies — FASB votes to issue exposure draft on expanding investment company disclosures.
  • FASB minutes on principal versus angent analysis.
  • FASB minutes on disclosures about investments in another investment company.
  • FASB minutes on the not-for-profit financial reporting discussion.

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