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FASB issues proposed ASU on interaction between standards on equity method and financial instruments

  • FASB document Image

Jul 30, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815.”

The pro­posed ASU, which is being released in response to an EITF consensus-for-exposure, clarifies that (1) when an entity applies the ASC 321 measurement alternative, it should consider observable transactions that require it to either apply or discontinue the equity method immediately before applying or after discontinuing ASC 323 and (2) an entity should apply ASC 321 rather than ASC 323 to account for forward contracts and purchased options to acquire an equity instrument that do not meet the definition of a derivative under ASC 815.

Com­ments on the pro­posed ASU are due by August 29, 2019. For more in­for­ma­tion, see Deloitte’s June 2019 EITF Snapshot as well as the press release and pro­posed ASU on the FASB’s Web site.

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