At its December 15, 2010, board meeting, the IASB discussed feedback received from the FASB roundtable meetings on the IASB staff draft Consolidated Financial Statements. The IASB agreed to retain its existing proposals in the staff draft but to incorporate clarifying language in the final standard to address some of the concerns roundtable participants expressed regarding the treatment of potential voting rights, the concept of the “ability” to control (i.e., control of a voting interest entity with less than 50 percent of the vote), and principal/agent guidance.

The FASB staff confirmed that it plans to discuss the consolidation project at a January board meeting and intends to issue an exposure draft early in 2011. This is consistent with statements made by Leslie Seidman, acting chairman of the FASB, at the 2010 AICPA National Conference on Current SEC and PCAOB Developments. The FASB staff aims to:

• Recommend a single consolidation model that is based on control, although the staff has concerns regarding the Board’s timing and priorities.
• Retain the existing guidance on voting interest entities (i.e., current control through 50 percent plus one vote or other contractual arrangements that give the entity control).
• Proceed with changes to try to align the principal/agent guidance with the IASB’s final standard.

The IASB tentatively agreed to an effective date of no earlier than January 1, 2013, for IFRS 10, Consolidated Financial Statements; IFRS 11, Joint Arrangements; IFRS 12, Disclosure of Involvement With Other Entities; and IAS 28, Investments in Associates. However, this decision is subject to reconsideration on the basis of feedback from the IASB’s request for views on the effective date. The IASB also plans to permit early application for first-time adopters of IFRSs but would reconsider the early application and transition provisions at a future meeting.