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.
Wednesday, March 30, 2016 FASB Board Meeting
Financial statements of not-for-profit entities (phase 1). The Board continued its redeliberations on the proposed Accounting Standards Update, Not-for-Profit
Entities (Topic 958) and Health Care Entities (Topic 954): Presentation
of Financial Statements of Not-for-Profit Entities, focusing on the transition method and effective date for applying the amendments in the forthcoming final Update.
Transition Method
The Board decided that not-for-profit entities (NFPs) should apply the
amendments on a retrospective basis for all years presented. However, if
presenting comparative financial statements, NFPs would have the option
to omit the following information for any years presented before the
year of adoption:
- Analysis of expenses by both functional and natural classification
- Disclosures around liquidity and availability of resources.
The Board decided that NFPs would not be required to apply the
amendments to interim financial statements in the year of adoption, but
information for those interim periods would be required to be restated
if reported with financial statements for that fiscal year.
Effective Date
The Board decided that the amendments would be effective for financial
statements for fiscal years beginning after December 15, 2017, and for
interim financial statements for periods after that date. The Board also
decided to permit early adoption subject to the transition method
above.
Clarifying
when a not-for-profit entity that is a general partner should
consolidate a for-profit limited partnership (or similar entity).
The Board discussed outreach performed on alternatives that would
address when a not-for-profit general partner should consolidate a
for-profit limited partnership (or similar entity). The Board also
discussed transition method and whether to proceed with drafting a
proposed Accounting Standards Update. The Board made the following
decisions.
The Board decided to maintain current practice for not-for-profit
general partners by reinstating the consolidation guidance that
previously existed in Subtopic 810-20, Consolidation—Control of
Partnerships and Similar Entities, and including it in Subtopic 958-810,
Not-for-Profit Entities—Consolidation. The guidance in Subtopic 810-20
was removed as a result of amendments in Accounting Standards Update No.
2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis.
Because the Board decided to reinstate the consolidation guidance that
previously existed in Subtopic 810-20, the Board decided not to
supersede the guidance related to special-purpose-entity (SPE) lessors
from Subtopic 958-810 and agreed not to perform further outreach on the
SPE guidance.
The Board decided to provide transition guidance because some entities
may have early adopted the amendments in Update 2015-02. Those
not-for-profit entities that have adopted the amendments in Update
2015-02 would apply the proposed amendments using a modified
retrospective approach by recording a cumulative-effect adjustment to
equity as of the beginning of the fiscal year of adoption, or they would
apply the amendments retrospectively.
Not-for-profit entities that have not yet adopted the amendments in
Update 2015-02 would apply the proposed amendments using the same
effective date and transition provisions in Update 2015-02.
The Board directed the staff to draft a proposed Accounting Standards
Update for vote by written ballot, with a comment period of 60 days.