FASB Holds June 15 Meeting
June 17, 2022
At its June 15, 2022, meeting, the FASB discussed its projects on the following topics:
- Identifiable intangible assets and subsequent accounting for goodwill and improving the accounting for asset acquisitions and business combinations (Phase 3 of the Board’s project on the definition of a business) — On the basis of its research and the feedback it has received, the Board has decided to deprioritize these projects and remove them from its technical agenda.
Insurance: transition for Accounting Standards Update (ASU) No. 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI) — The Board tentatively decided to:
In addition, the Board made tentative decisions related to transition and cost-benefit analysis and directed its staff to begin drafting a proposed ASU for a vote by written ballot.
- Add “a project to its technical agenda to address the application of the amendments in Update 2018-12 to contracts and legal entities sold before the effective date.”
- Amend “the transition guidance for Update 2018-12 to include an accounting policy election for insurance entities to not apply that guidance to contracts or legal entities sold before the effective date.”
- Limit “the accounting policy election to contracts or legal entities that are derecognized before the effective date and in which the insurance entity does not have certain forms of continuing involvement.”
- Require “an entity to disclose if the accounting policy election was made.”
- Conceptual framework: the reporting entity — The Board deliberated the reporting-entity phase of its conceptual framework project and made tentative decisions regarding parent-only financial statements, the circumstances in which a “portion of an entity can represent a reporting entity,” and combined financial statements. The Board directed its staff to begin drafting a proposed chapter (Chapter 2, “The Reporting Entity”) of Concepts Statement 8 for a vote by written ballot.