Simplifying
the balance sheet classification of debt. The Board continued
redeliberations of proposed Accounting Standards Update,
Debt (Topic 470):
Simplifying the Classification of Debt in a Classified Balance Sheet (Current
versus Noncurrent).
Classification Principle—Unused Long-Term
Financing ArrangementsThe Board directed the staff to conduct
additional research, focusing on a potential alternative that considers the
contractual linkage between certain debt arrangements and unused long-term
financing arrangements in place at the balance sheet date. That research also
would consider the need to include other conditions within or surrounding that
financing arrangement, such as the financial capability of the lender, the
existence of a subjective acceleration clause, the required use of the proceeds,
and the timing and terms of the arrangements.
Accounting
for certain identifiable assets in a business combination and subsequent
accounting for goodwill for public business entities and not-for-profits.
The Board discussed the research project on the subsequent accounting for
goodwill and the accounting for certain identifiable intangible assets in a
business combination.
The Board decided to add a project to
the technical agenda for not-for-profit entities and directed the staff to draft
a proposed Accounting Standards Update for vote by written ballot to extend the
amendments in Accounting Standards Update No. 2014-02,
Intangibles—Goodwill
and Other (Topic 350): Accounting for Goodwill (a consensus of the Private
Company Council), and Accounting Standards Update No. 2014-18,
Business
Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a
Business Combination (a consensus of the Private Company Council), to
not-for-profit entities.
The Board decided that the comment period
for the proposed Update would be 60 days.
The Board decided to add
another project to the technical agenda and directed the staff to draft an
Invitation to Comment to obtain formal input from stakeholders on the subsequent
accounting for goodwill, the accounting for certain identifiable intangible
assets, and the scope of the project on those topics.
Codification
improvements—financial instruments—credit losses. The Board discussed
comment letter feedback on the proposed Accounting Standards Update,
Codification Improvements to Topic 326, Financial Instruments—Credit Losses:
Measurement of Credit Losses on Financial Instruments (Update 2016-13). The
Board reaffirmed its decisions in the proposed Update to amend the guidance in
Topic 326 as follows:
- Mitigate transition complexity by providing separate and staggered
effective date requirements for public business entities (PBEs) that meet the
definition of a Securities and Exchange Commission (SEC) filer, PBEs that do
not meet the definition of an SEC filer, and all other entities, including
not-for-profit entities and employee benefit plans within the scope of Topics
960 through 965 on plan accounting. Transition complexity would be reduced by
amending paragraph 326-10-65-1 to require that nonpublic business entities,
including not-for-profit entities and employee benefit plans within the scope
of Topics 960 through 965, adopt the amendments in Update 2016-13 for fiscal
years beginning after December 15, 2021, and interim periods within those
fiscal years.
- Clarify that operating lease receivables accounted for under Topic 842,
Leases, are excluded from the scope of Subtopic
326-20.
Analysis of Costs and Benefits
The Board concluded that it has received sufficient information and
analysis to make an informed decision on the issues presented and that the
expected benefits of the amendments justify the expected costs.
Next Steps
The Board directed the staff to draft a final Accounting Standards Update
for vote by written ballot.