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.

December 16, 2015 FASB Board Meeting

Agenda prioritization. The Board discussed the results of staff research on the following five potential projects:
  1. Post-implementation review research on Statement 160
  2. Notional pooling
  3. Consolidation guidance for not-for-profit entities
  4. Financial guarantees insurance
  5. Nonemployee share-based payments.
The Board considered a staff analysis of issues related to post-implementation review research on Statement 160, notional pooling, and financial guarantees insurance and decided that they did not meet the Board’s agenda criteria.

Consolidation Guidance for Not-for-Profit Entities

The Board decided to add a project to its agenda to clarify when a not-for-profit entity that is a general partner should consolidate a for-profit limited partnership. The Board directed the staff to perform additional research on the identified alternatives to best address stakeholder concerns.

Nonemployee Share-Based Payments

The Board decided to add a project to its agenda to improve the accounting model for nonemployee share-based payments. The Board directed the staff to perform additional research to determine the implications of including share-based payment issued for goods in the scope of the project.

Conceptual framework—measurement. The Board discussed two alternatives for determining what should be included in initial carrying amounts of assets, liabilities, and equity:

Alternative A—Include direct and unavoidable incremental costs like taxes, fees, delivery, commissions, and issuance costs

Alternative B—Include the same types of amounts that a third party would have included for all of the acquisition, issuance, and installation services but use the actual amounts instead of estimates of what a third party would have included in an all-in price.

The Board discussed a way to combine the best aspects of the two alternatives and directed the staff to develop that alternative for discussion at a future meeting.

The Board discussed potential wording for a possible Exposure Draft that would address how the qualitative characteristics of useful financial information apply to determining changes in carrying amounts and which changes in carrying amounts might be appropriate in which circumstances. The Board made some suggestions on how to revise the draft for further discussion at a future meeting.

FASB endorsement of Private Company Council (PCC) consensus. The Board endorsed the consensus reached by the PCC on Issue No. 15-01, “Effective Date and Transition Guidance.”

The Board endorsed the PCC’s consensus to make the guidance in the following Accounting Standards Updates effective immediately by removing their effective dates:
  1. Update No. 2014-02, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill
  2. Update No. 2014-03, Derivatives and Hedging (Topic 815): Accounting for Certain Receive-Variable, Pay-Fixed Interest Rate Swaps—Simplified Hedge Accounting Approach
  3. Update No. 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements
  4. Update No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination.
These changes allow private companies to forgo an initial preferability assessment that otherwise would have been required under Topic 250, Accounting Changes and Error Corrections, upon first election of the accounting alternatives in those Updates. Any subsequent election of those accounting alternatives will require a preferability assessment.

The Board also endorsed two other PCC consensuses relating to those four Updates:
  1. To indefinitely extend their transition guidance
  2. To require private companies electing one or more of those accounting alternatives to make the change using the original transition provisions included in those Updates for the first year applied. That is:
    1. The accounting alternatives within Updates 2014-02, 2014-03, and 2014-07 must be applied as of the beginning of the first annual reporting period in which each alternative is elected.
    2. The accounting alternative within Update 2014-18 must be applied as of the first in-scope transaction in the annual reporting period in which the alternative is elected.
Next Steps

The Board directed the staff to draft an Accounting Standards Update for vote by written ballot.