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Journal entry — Development-stage entities — FASB decides to amend guidance

Published on: Sep 11, 2013

The FASB met today to discuss possible amendments to its guidance on development-stage entities (DSEs)1 in ASC 915.2 ASC 915 contains presentation and disclosure provisions specific to DSEs, including a requirement that they present inception-to-date information in their financial statements and disclose information about the nature of their activities.

At today’s meeting, the FASB tentatively decided to remove the DSE-specific guidance in ASC 915 from the FASB Accounting Standards Codification. The Board plans to issue a proposed Accounting Standards Update (ASU) in the coming months to solicit feedback from its constituents. The proposed ASU’s comment period will be at least 45 days.

For additional information about the Board’s tentative decisions and objectives related to the project, see the FASB’s project page.

[1]    The Codification Master Glossary defines a development-stage entity as “an entity devoting substantially all of its efforts to establishing a new business and for which either of the following conditions exists:

1. Planned principal operations have not commenced.
2. Planned principal operations have commenced, but there has been no significant revenue therefrom.”

[2]    FASB Accounting Standards Codification Topic 915, Development Stage Entities.

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