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Journal entry — Investment companies — FASB continues to discuss scope

Published on: Aug 08, 2012

At its meeting today, the FASB reaffirmed its decision that entities regulated under the Investment Company Act of 1940 should qualify as investment companies under U.S. GAAP regardless of whether they meet the Board’s proposed definition of an investment company. The FASB also decided that equity real estate investment trusts (REITs) should be excluded from the scope of the proposed investment company guidance. At a future meeting, the Board will decide whether to include mortgage REITs in this scope exception.

In addition, the Board decided that it would not continue to develop the investment property entity concept. Rather, once it completes certain other related projects, the Board will decide whether to pursue an asset-based approach for measuring investment properties that is similar to the approach in IAS 40, Investment Property. If the Board decides to pursue such an approach, it would then decide whether fair value measurement should be an option or a requirement.

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