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Highlights from the FASB’s February 26 meeting

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Feb 27, 2014

At its February 26, 2014, meeting, the FASB made decisions related to the following three topics: classification and measurement, development-stage entities, and not-for-profit financial reporting.

Financial instruments — Classification and measurement

The FASB redeliberated its proposed Accounting Standards Update, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, and discussed the potential need for a new contractual cash flow characteristics assessment and fair value option for hybrid financial assets.

The Board tentatively decided (1) not to include an assessment test for cash flow characteristics of financial assets, (2) to “require equity investments to be measured at fair value with changes in the fair value recognized in net income (FV-NI), except for certain investments that are accounted for under the equity method of accounting and those that qualify for the practicability exception to fair value measurement,” and (3) to permit the use of a fair value option for hybrid financial instruments if the hybrid instrument contains an embedded derivative that requires bifurcation and separate accounting.

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


Development-stage entities 

The FASB redeliberated and affirmed its proposed Accounting Standards Update, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, which would remove the concept of a development-stage entity from U.S. GAAP. The Board directed the staff to draft final standard for vote by written ballot.

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


Not-for-profit financial reporting

The FASB tentatively decided that when presenting revenue, expenses, and other changes in net assets, not-for-profit (NFP) entities are (1) allowed to use a one- or two-statement approach, (2) required to present the intermediate measure of operations except when a statement also contains a change in unrestricted net assets during a period, and (3) not required to report a subtotal before the intermediate measure of current operations.

In addition, the Board tentatively decided to require NFP entities to “include a net presentation of investment expenses against investment return on the face of the statement of activities, with the types and amounts of investment expenses disclosed in the notes to the financial statements.”

For more information, see the meeting minutes on 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.