Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

1. Require that a joint venture formed after the effective date of the new guidance apply the measurement and recognition guidance upon formation prospectively. An existing joint venture entity would have an option to apply the new guidance retrospectively.
2. Require that a joint venture upon formation measure its net assets (including goodwill) using the fair value of the joint venture as a whole. Therefore, a joint venture would measure its total net assets upon formation as the fair value of 100 percent of the joint venture’s equity immediately after formation.

1. Areas in which equity method basis differences could result from a misalignment between (a) the initial accounting by the venturer for its equity method investment in a joint venture entity and (b) the joint venture entity’s accounting for its formation in applying the Board’s tentative decisions on this project.
2. Whether a joint venture should be able to apply the measurement period guidance in accordance with Subtopic 805-10, Business Combinations—Overall, which allows an entity to recognize and adjust provisional amounts for items for which the accounting is incomplete.
3. Disclosure requirements for a joint venture upon formation.