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FASB eliminates DSE concept and amends consolidation guidance on DSE assessment

  • FASB (US Financial Accounting Standards Board) Image

Jun 10, 2014

The FASB has issued ASU 2014-10,* which removes the concept of a development stage entity (DSE) from U.S. GAAP, eliminating all incremental reporting requirements (such as providing inception-to-date information) for such entities.

Specifically, ASU 2014-10:

  • Removes ASC 915 in its entirety from the FASB Accounting Standards Codification.
  • Deletes the guidance in ASC 810 on how to assess whether a DSE has sufficient equity at risk in the evaluation of whether the DSE is a variable interest entity.
  • Clarifies that all entities, including entities that have not begun operations, should provide the risk and uncertainty disclosures required in ASC 275.

The ASU will be applied retrospectively and will be effective for public business entities in interim and annual periods beginning after December 15, 2014. The requirements will be effective for nonpublic business entities for annual periods beginning after December 15, 2014, and interim and annual periods thereafter. However, both public and nonpublic entities will have additional time to adopt the amendments to ASC 810. Early adoption is permitted in all cases.

For more information, see the related Deloitte Accounting Journal entry and the press release, ASU, and FASB in Focus on the FASB’s Web site.


* FASB Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915) — Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.

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