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FASB issues proposals on development-stage entities

  • FASB (US Financial Accounting Standards Board) Image

Nov 07, 2013

The FASB has released a proposed Accounting Standards Update (ASU) for public comment that is intended to improve financial reporting for public and private development-stage entities (DSEs) by reducing the cost and complexity created by incremental reporting requirements. The proposed ASU will affect DSEs and may affect a reporting entity’s consolidation decisions if it has an interest in a DSE.

The most significant amendments stated in the proposed ASU include:

  • Removal of the distinction between DSEs and other reporting entities.
  • Removal of a DSE's requirements to (1) present inception-to-date information on the statements of income, cash flows, and shareholder’s equity; (2) label the financial statements as those of a DSE; (3) disclose a description of the development-stage activities in which the entity is engaged; and (4) disclose in the first year in which the entity is no longer a DSE that in prior years it had been in the development stage.
  • Removal of the guidance in ASC 810-10-15-16, which would result in all entities being evaluated for consolidation using the same criteria.

Comments are requested by December 23, 2013.

For more information, see Deloitte's Accounting Journal Entry and the FASB's Web site for its:

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