Ratification
of EITF consensuses-for-exposure. The Board ratified the
consensuses-for-exposure reached at the September 27, 2018 EITF meeting on the
following EITF Issues. The Board directed the staff to draft proposed Accounting
Standards Updates reflecting each consensus-for-exposure for vote by written
ballot.
Issue No. 18-A, “Recognition under Topic 805 for an
Assumed Liability in a Revenue Contract” The EITF
reaffirmed the consensus-for-exposure (which was reached at its June 7, 2018
meeting) that the performance obligation definition in Topic 606, Revenue from
Contracts with Customers, would be used to determine whether a liability assumed
for a contract liability from a revenue contract with a customer is recognized
by the acquirer in a business combination. The Task Force also reaffirmed the
consensus-for-exposure that it reached at a prior meeting that would require an
entity to apply the proposed amendments prospectively to all business
combinations that occur after the proposed amendments are effective and not to
require any disclosures in the period of adoption. The Task Force decided not to
address the measurement of the contract liability and the effect of payment
terms on subsequent revenue recognition.
In addition to the
consensus-for-exposure being ratified by the Board, the FASB chairman authorized
the staff to prepare a Discussion Paper in the form of an Invitation to Comment
(separate from the proposed Update) to solicit input about measurement and other
topics related to the Task Force’s consensus-for-exposure.
The
Board decided to expose the proposed Update and the Invitation to Comment (the
Discussion Paper) for public comment concurrently for a period ending on April
30, 2019.
Issue No. 18-B, “Improvements to Accounting for
Episodic Television Series” The EITF reached a
consensus-for-exposure to converge the capitalization guidance for films and
episodic content. The Task Force also reached a consensus-for-exposure to allow
an entity to assess a film group for impairment and amend the presentation and
disclosure requirements for films and episodic content. In addition, the Task
Force agreed to make conforming amendments to Subtopic 920-350,
Entertainment—Broadcasters—Intangibles—Goodwill and Other, to align its
impairment and presentation and disclosure guidance with the Task Force’s
decisions. The Task Force also decided to require that an entity reassess
estimates of the use of a film and account for any changes prospectively.
In addition, the Task Force reached a consensus-for-exposure that
would require that an entity apply the amendments resulting from this Issue on a
prospective basis and disclose the nature of and reasons for the change in
accounting principle, the transition method, and a qualitative description of
the financial statement line items affected by the change.
The
Board decided to expose the proposed Update for public comment for a period of
30 days.