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Highlights from the FASB’s October 8 meeting

  • FASB meeting Image

Oct 10, 2014

At its October 8, 2014, meeting, the FASB discussed its projects related to (1) the definition of a business, (2) various EITF Issues, (3) share-based payment, (4) government assistance disclosures, and (5) not-for-profit financial statements.


Definition of a business

The FASB staff held an educational session to provide the Board with an update on its research related to the definition of a business, in-substance nonfinancial assets, partial sales and retained interests, and other asset-versus-entity differences.

For more information, see the meeting minutes on the FASB’s Web site.


Ratification of EITF consensuses and tentative conclusions

The FASB indicated that it has ratified the EITF’s:

  • Consensuses on Issue Nos. 12-F, “Pushdown Accounting,” and 13-G, “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity.”
  • Consensuses-for-exposure on Issue Nos. 14-A, “Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions,” and 14-B, “Fair Value Hierarchy Levels for Certain Investments Measured at Net Asset Value.”

The FASB has directed its staff to draft, for a vote by written ballot, (1) Accounting Standards Updates based on each of the two consensuses and (2) proposed Accounting Standards Updates based on each of the two consensuses-for-exposure.

For more information, see Deloitte’s September EITF Snapshot and the meeting minutes on the FASB’s Web site.


Share-based payment

The FASB added a project to its technical agenda on improvements to share-based payment accounting and tentatively decided that the project’s scope will include:

  • “Minimum statutory withholding requirements.”
  • “Presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet minimum statutory withholding requirements.”
  • “Accounting for forfeitures.”
  • “Accounting for income taxes upon vesting or settlement of awards.”
  • “Presentation of excess tax benefits on the statement of cash flows.”

For details, see the meeting minutes on the FASB’s Web site.


Government assistance disclosures

The FASB tentatively decided that a “principle should be used to describe the scope of the disclosures that would focus on arrangements that (1) are the result of an agreement and (2) the entity does not provide equal value in return for the assistance received.” In addition, the Board decided that only business entities would be required to provide disclosures about domestic and foreign government assistance.

For more information, see the meeting minutes on the FASB’s Web site.


Financial statements of not-for-profit entities

The FASB tentatively decided to revise its previous decisions on (1) capital-like transactions and (2) board designations, appropriations, and similar transfers.

The revisions to capital-like transactions include a requirement for a not-for-profit (NFP) entity to “report gifts of long-lived assets without donor restrictions as operating revenue”; if the asset is placed in service, “the entire amount of the gifted long-lived asset” would be reported as a transfer out of operations.

The revisions to board designations, appropriations, and similar transfers include requirements for NFPs to “present (1) all transfers in a separate, discrete section and (2) a subtotal of operating revenues and expenses before such transfers, which is in addition to the previous decision to require a subtotal after such transfers.”

The FASB has directed the staff to draft a proposed Accounting Standard Update for external review.

For more information, see the meeting minutes on the FASB’s Web site.

Correction list for hyphenation

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