Summary of Board Decisions
Summary of Board decisions are provided for the information and
convenience of constituents who want to follow the Board´s deliberations. All of
the conclusions reported are tentative and may be changed at future Board
meetings. Decisions are included in an Exposure Draft for formal comment only
after a formal written ballot. Decisions in an Exposure Draft may be (and often
are) changed in redeliberations based on information provided to the Board in
comment letters, at public roundtable discussions, and through other
communication channels. Decisions become final only after a formal written
ballot to issue an Accounting Standards Update.
December
11, 2013 FASB Board Meeting
Consolidation—Principal
versus Agent Analysis. The Board decided that the factors included in the
proposed Accounting Standards Update, Consolidation (Topic 810): Principal
versus Agent Analysis, for determining whether a decision maker is a
principal or an agent should be integrated into the existing guidance in Topic
810 for variable interest entities and voting interest entities.
FASB
Ratification of EITF Consensuses and Tentative Conclusions. The Board
ratified the consensuses reached at the November 14, 2013 EITF meeting on the
following Issues and approved issuance of resultant Accounting Standards
Updates.
Issue 12-G, "Measuring the Financial Assets and the
Financial Liabilities of a Consolidated Collateralized Financing
Entity"
A collateralized financing entity is defined as a
variable interest entity that holds financial assets, issues beneficial
interests in those financial assets, and has no more than nominal equity. The
beneficial interests have recourse to the related financial assets of the
collateralized financing entity and are classified as financial
liabilities.
A reporting entity electing to apply the amendments in the
Update resulting from this Issue should measure both the financial assets and
the financial liabilities of the collateralized financing entity using the more
observable of the fair value of the financial assets and the fair value of the
financial liabilities. A reporting entity´s consolidated statement of income
(loss) should reflect the reporting entity´s own economic interests. Changes in
the fair value of the beneficial interests retained by the reporting entity
should be recognized in the consolidated statement of income of the reporting
entity. Other beneficial interests retained by the reporting entity that
represent compensation for services (for example, management fees) and
nonfinancial assets that are held temporarily by a collateralized financing
entity should be accounted for in accordance with other applicable U.S.
GAAP.
A reporting entity that consolidates a collateralized financing
entity and measures the financial assets or the financial liabilities of the
collateralized financing entity using this guidance should disclose all of the
information required by Topic 820 on fair value measurement, Topic 825 on
financial instruments, and other relevant Topics, as applicable, for the fair
value of the financial assets or the financial liabilities, whichever is more
observable, and for any beneficial interests retained by the reporting entity
(other than those that represent compensation for services).
Reporting
entities may apply the amendments using a modified retrospective approach. In
addition, reporting entities may apply the amendments retrospectively to all
relevant prior periods beginning with the fiscal year in which the amendments in
Accounting Standards Update 2009-17 on consolidation were initially
adopted.
The amendments are effective for public business entities for
annual periods, and interim periods within those annual periods, beginning after
December 15, 2014. For entities other than public business entities, the
amendments are effective for the annual period beginning after December 15,
2015, and interim and annual periods thereafter. Early adoption is
permitted.
Issue 12-H, "Accounting for Service Concession
Arrangements"
The amendments in the Update resulting from this
Issue apply to an operating entity of a service concession arrangement entered
into with a public-sector entity grantor when the arrangement contains both of
the following conditions:
- The grantor controls or has the ability to modify or approve the services
that the operating entity must provide with the infrastructure, to whom it
must provide them, and at what price.
- The grantor controls, through ownership, beneficial entitlement, or
otherwise, any residual interest in the infrastructure at the end of the term
of the arrangement.
Service concession arrangements within the scope of
this Issue should not be accounted for as leases under Topic 840, and the
infrastructure that is the subject of a service concession arrangement within
the scope of this Issue should not be recognized as property, plant, and
equipment of the operating entity.
The amendments should be applied on a
modified retrospective basis to service concession arrangements that exist at
the beginning of an entity´s fiscal year of adoption.
The amendments are
effective for public business entities for annual periods (and interim reporting
periods within those annual periods) beginning after December 15, 2014. For all
entities other than public business entities, the amendments are effective for
the annual reporting period beginning after December 15, 2014, and interim and
annual reporting periods thereafter. Early adoption is
permitted.
Issue 13-B, "Accounting for Investments in Qualified
Affordable Housing Projects"
A reporting entity can elect to
account for an investment in a qualified affordable housing project using the
proportional amortization method if certain conditions are met. Under the
proportional amortization method, the entity amortizes the initial cost of the
investment in proportion to the tax credits and other tax benefits received and
recognizes the net investment performance amortization in the income statement
as a component of income taxes.
A reporting entity should disclose
information that enables users of its financial statements to understand the
nature of its investments in qualified affordable housing projects, and the
effect of the measurement of its investments in qualified affordable housing
projects and the related tax credits on its financial position and results of
operations.
An entity should apply the amendments in the Update resulting
from this Issue on a retrospective basis. However, a reporting entity that uses
the effective yield method to account for its investments in qualified
affordable housing projects before the date of adoption would be permitted to
continue to apply the effective yield method for those preexisting
investments.
The amendments are effective for public business entities
for annual periods and interim reporting periods within those annual periods,
beginning after December 15, 2014. For all entities other than public business
entities, the amendments are effective for the annual period beginning after
December 15, 2014, and interim and annual reporting periods thereafter. Early
adoption is permitted.
Issue 13-E, "Reclassification of
Residential Real Estate Collateralized Consumer Mortgage Loans upon
Foreclosure"
An in substance repossession or foreclosure occurs,
that is, a creditor is considered to have received physical possession of
residential real estate property collateralizing a consumer mortgage loan, upon
(1) the creditor obtaining legal title to the residential real estate property
upon completion of a foreclosure sale or (2) the borrower conveying all interest
in the residential real estate property to the creditor to satisfy that loan
through completion of a deed in lieu of foreclosure or through a similar legal
agreement.
The amendments in the Update resulting from this Issue require
disclosure of (1) the amount of foreclosed residential real estate property held
by the creditor and (2) the recorded investment in consumer mortgage loans
collateralized by residential real estate property that are in the process of
foreclosure according to local requirements of the applicable
jurisdiction.
Entities can elect to apply the amendments on either a
modified retrospective basis or a prospective basis.
The amendments are
effective for public business entities for annual periods, and interim periods
within those annual periods, beginning after December 15, 2014. For entities
other than public business entities, the amendments are effective for the annual
period beginning after December 15, 2014, and interim and annual periods
thereafter. Early adoption is permitted.
FASB Ratification of EITF
Consensus-for-Exposure
The Board also ratified the
consensus-for-exposure reached at the November 14, 2013 EITF meeting on the
following Issue and decided that the comment deadline for the resultant proposed
Update will be April 30, 2014.
Issue 13-F, "Classification of
Certain Government Insured Residential Mortgage Loans upon
Foreclosure"
The amendments in the proposed Update resulting
from this Issue would apply to residential mortgage loans for which (1) there is
a government guarantee that is not separable from the loan entitling the
creditor to recover the full unpaid principal balance of the loan and (2) at the
time of foreclosure the creditor has the intent and ability to recover under the
guarantee.
A creditor would reclassify a government guaranteed
residential mortgage loan for which the creditor has the intent and ability to
recover the full unpaid principal balance of the loan to a separate receivable
at the time of foreclosure.
No incremental disclosure requirements would
be required.
The proposed amendments would be applied using the same
transition method elected by a reporting entity for application of the
amendments in the Update resulting from EITF Issue No. 13-E, "Reclassification
of Residential Real Estate Collateralized Consumer Mortgage Loans upon
Foreclosure." Early adoption would be permitted.
Potential
New Agenda Item: Application of EITF Issue 13-B to Other Types of Tax Credit
Investments
The Board directed the staff to perform
pre-agenda decision research on the applicability of EITF Issue No. 13-B,
"Accounting for Investments in Qualified Affordable Housing Projects," to other
types of tax credit investments, not just investments in qualified affordable
housing projects. The results of that research will be presented to the Board at
a later date. On the basis of those results, the Board will decide whether to
address this Issue and, if so, whether to add it to the FASB´s or the EITF´s
agenda.