FASB Holds May 13 Meeting

At its May 13, 2026, meeting, the FASB added the following two projects to its technical agenda, both of which will apply to investment companies within the scope of ASC 946:

• The fair value measurement of equity securities subject to contractual sale restrictions.
• Private credit disclosures.

In addition, the Board discussed feedback it has received on its (1) project on targeted improvements to the equity method of accounting and (2) 2025 invitation to comment (ITC), Agenda Consultation, with respect to (a) the accounting for and disclosure of intangibles and (b) the accounting for nonrefundable, transferable tax credits (TTCs).

The Board primarily addressed two issues: the scope of ASC 323 (Issue A) and complex allocation structures (Issue B). Regarding Issue A, the Board decided that “significant influence” would be the sole threshold for determining whether an entity would apply the equity method and, accordingly, that several enhancements will be made to the guidance on equity method investments in ASC 323-10. As for Issue B, the Board decided, among other things, to move certain paragraphs from ASC 970-323 (which specifically applies to real estate) to ASC 323 so that such guidance will no longer be transaction- or industry-specific (i.e., so that it will more broadly apply to equity method investments in all industries). Further, the Board decided to make several “consequential amendments” related to this project — for example, the consolidation guidance in ASC 810 on the allocation of income to noncontrolling interest holders will be amended to refer to the ASC 323 guidance on complex allocation structures.

The Board also made a number of tentative decisions regarding the transition and early adoption for the amendments related to both of the above issues. The staff has been directed to draft a proposed Accounting Standards Update related to these amendments for a vote by written ballot.

For more information, see the meeting handout and tentative Board decisions on the FASB’s Web site.

Matters addressed during this portion of the meeting included the following:

• Accounting for and disclosure of intangibles — The Board discussed the staff’s research on four issues: (1) the definition of the term “research and development” (R&D) and related implementation guidance, (2) the scope of ASC 730-10, (3) R&D disclosure requirements, and (4) advertising costs. While the Board offered the staff suggestions for how to focus its ongoing research in these areas, no decisions were made at this meeting.
• Accounting for nonrefundable TTCs — The Board decided to add a project on nonrefundable TTCs to its technical agenda and, after considering several alternatives, determined that such credits would be accounted for under ASC 740. However, the Board decided that no additional derecognition guidance would be provided for nonrefundable TTCs.

For more information, see the meeting handout and tentative Board decisions on the FASB’s Web site.