Appendix D — Roadmap Updates for 2023

Difference Between Noncontrolling Interests’ Fair Value and Their Claims on Net Assets on the Acquisition Date

New section that discusses how a reporting entity should initially measure noncontrolling interests when there is a difference between the noncontrolling interest holders’ claims on net assets based on the terms and conditions of contractual arrangements and the amounts initially recognized for the equity interests on the acquisition date at either their fair value or their proportionate share of relative fair value.

Acquisition Accounting Matters

New section that clarifies that if there is a difference on the initial acquisition date between noncontrolling interests’ claims on net assets based on terms and conditions from contractual arrangements and the amounts initially recognized for the equity interests on the acquisition date at either their fair value or their proportionate share of relative fair value, it would be (1) inappropriate for the reporting entity to recognize a gain or loss resulting from this difference when attributing income and OCI to the parent and noncontrolling interests but (2) generally acceptable to use the noncontrolling interests’ contractual claims on net assets for the reporting entity’s attribution of income and comprehensive income.

Establishment of Noncontrolling Interests in Conjunction With an Asset Acquisition or Business Combination

New section that discusses the timing of gain or loss resulting from the difference between noncontrolling interests’ claims on net assets based on terms and conditions from contractual arrangements and either their fair value or their proportionate share of relative fair value.

Noncontrolling Interest in a Subsidiary Owned by the Parent or Affiliate of a Reporting Entity

Renumbered Example 3-3A to Example 3-4.

Only Equity Interests Can Be Noncontrolling Interests

Renumbered Example 3-4 to Example 3-5.

Noncontrolling Interests Recognized Concurrently With an Asset Acquisition

Added a discussion of how the accounting for noncontrolling interests recognized in an asset acquisition varies depending on whether the subsidiary is a VIE.

Separating the Benefits of Tax Credits From the Substantive Noncontrolling Interest

Broadened the discussion to include non-LIHTC tax equity investment structures.

7.1.1.1

Noncontrolling Interests Arising From Transfers of Real Estate Accounted for as a Profit-Sharing Arrangement

Deleted to reflect the FASB’s removal from the Codification of legacy guidance superseded by ASU 2016-02. The next section has been renumbered accordingly.

Parent’s Accounting for Subsidiary’s Issuance of Share-Based Payment Awards

Added new Example 7-6 to illustrate an entity’s accounting for the issuance of share-based payment awards in the form of stock options that, once fully vested, are either exercised or forfeited. Renumbered subsequent examples accordingly.

Classification of Redeemable Noncontrolling Interests

Expanded the discussion to include considerations related to share-settled features (e.g., a conversion feature).