FASB votes to expose alternative consolidation requirements for private companies
08 Aug 2013
Yesterday, the FASB voted to expose for public comment a Private Company Council (PCC) proposal that would give private companies the option not to apply the variable interest entity (VIE) guidance in ASC 810 to certain interests in entities under common control.
Specifically, a private company would not be required to apply the variable interest guidance if the arrangement meets all of the following conditions:
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However, the proposal would require private companies that elect this option to disclose the following additional information:
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A private company that elects this option would be required to apply the proposed alternative to all of its leasing arrangements that meet the above requirements. The proposal would also remove the example codified in ASC 810-10-55-87 through 55-89. Such removal could affect both public and private companies.
The proposal is scheduled to be exposed for public comment by August 23, 2013, and the comment period is expected to end on October 14, 2013. The proposed alternative would be applied retrospectively, with an adjustment to the opening balances of the earliest period presented.
For more information about the PCC, see the FASB’s website.