SUMMARY OF BOARD DECISIONS

Summary of Board decisions are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue an Accounting Standards Update.

October 13, 2010 FASB Board Meeting

Consolidation—investment companies. The Board discussed a number of issues raised by constituents related to the definition of an investment company and decided to change its previous tentative decision that a noninvestment company parent should not retain the specialized accounting treatment for an investment company that it consolidates. The Board will discuss its decision to retain the specialized accounting treatment with the IASB at a future meeting.

The Board also discussed the transition requirements for the proposed investment company guidance and decided the following:
  1. For entities that a reporting entity is required to consolidate because the reporting entity does not meet the revised definition of an investment company, the reporting entity should apply the revised investment company definition retrospectively, if practicable, for all periods presented. The reporting entity should determine the carrying values of the assets, liabilities, and noncontrolling interests of the subsidiary by applying the business combination guidance in FASB Accounting Standards CodificationTM Topic 805, Business Combinations.
     
  2. If full retrospective application is not practicable, a reporting entity should apply prospectively the revised investment company definition, using the business combination guidance in Topic 805, to measure the assets, liabilities, and noncontrolling interests of the subsidiary as of the date of adoption of the proposed guidance.
     
  3. Similarly, for entities that the reporting entity is required to account for under the equity method because the entities do not meet the revised definition, the reporting entity should apply the revised investment company definition retrospectively, if practicable, for all periods presented by applying the equity method guidance in Topic 323, Investments—Equity Method and Joint Ventures.
     
  4. If full retrospective application is not practicable, a reporting entity should apply prospectively the revised investment company definition, using the equity method guidance in Topic 323, as of the date of adoption of the proposed guidance.
     
  5. Early adoption would not be permitted.