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FASB drops proposal to align consolidation policies with IAS 27

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12 Jan 2001

The Financial Accounting Standards Board has been working since 1982 to revise the US standard on consolidation, adopted in 1959. Both FASB's 1995 exposure draft and its 1999 revised exposure draft would have moved the US from "majority voting interest" to "control" as the basic principle for consolidation.

Control is the principle in IAS 27 and most national standards. FASB has also been developing an exposure draft on consolidation of special purpose entities, a matter addressed in SIC 12. However, FASB has just announced that "there is not sufficient Board member support to proceed with either a final statement on consolidation policy, or an exposure draft on entities with specific limits on their powers (SPEs)".

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