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FASB discusses principal versus agent analysis

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Jan 09, 2014

At its meeting yesterday, the FASB continued deliberating its principal-versus-agent guidance related to consolidating variable interest entities (VIEs) and non-VIEs.

Specifically, the FASB discussed how rights held by other parties should affect whether (1) an entity is a VIE and (2) a decision maker should consolidate the VIE. The FASB did not vote on either of these issues but directed the staff to perform further analysis. However, the FASB did tentatively decide that redemption rights should be viewed differently than liquidation rights, kickout rights, and substantive participating rights.

For more information, see Deloitte's Accounting Journal Entry and the meeting minutes on the FASB's Web site.

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