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FASB proposes ASU on pushdown accounting

  • FASB (US Financial Accounting Standards Board) Image

Apr 29, 2014

Yesterday, the FASB issued proposed Accounting Standards Update (ASU) “Pushdown Accounting — a consensus of the FASB Emerging Issues Task Force.” Under the proposed ASU, acquired entities would have the option of applying pushdown accounting (i.e., establishing a new accounting and reporting basis in their stand-alone financial statements) in their separate financial statements upon occurrence of a change-in-control event.

Acquired entities would evaluate and choose to elect the option to apply pushdown accounting “for each individual change-in-control event in which an acquirer obtains control of the acquired entity.” The proposed ASU would also require acquired entities that have elected to apply pushdown accounting to provide disclosures that let financial statement users evaluate the effect of pushdown accounting on the entities’ financial statements.

The proposal was issued in response to consensuses-for-exposure reached at the EITF’s March 13, 2014, meeting and was ratified at the FASB’s March 26, 2014, meeting. Comments are due by July 31, 2014.

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

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