FASB Holds June 12 Meeting

Topics addressed included (1) a specific policy election related to remeasurement of certain noncompliance environmental credits at fair value; (2) disclosure requirements, including those related to “certain qualitative and accounting policy information about an entity’s involvement in ECPs”; and (3) transition, including the Board’s tentative decision to require entities to use a modified retrospective approach to adopt the guidance. The Board has directed the staff to draft a proposed Accounting Standards Update (ASU) related to this project for a vote by written ballot.

The goal of this project is to clarify the guidance in ASC 606 (on revenue from contracts with customers) and ASC 718 (on share-based payment) with respect to “share-based payments that an entity grants as consideration payable to its customer.” In addition to adding the project to its agenda, the Board reached tentative decisions on several topics, including (1) conditions based on customer purchases, (2) conditions “based on purchases by parties that purchase the entity's goods or services from its customer,” (3) the variable consideration constraint, and (4) transition method and disclosures. Further, the Board asked the staff to draft a proposed ASU related to this project for a vote by written ballot.