The FASB has issued an Exposure Draft which proposes changing the effective date and transition guidance related to ASU 2014-02, Intangibles-Goodwill and Other (Topic 350)
; ASU 2014-03, Derivatives and Hedging (Topic 815)
; ASU 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements
; or ASU 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Assets in a Business Combination.
The main provisions of the Exposure Draft are:
- The effective dates included in the Accounting Standards Updates listed above would be removed, making them effective immediately. For ASU 2014-02, this would allow companies to avoid retrospective application of the accounting alternative, as required by ASC 250-10-45-5. For ASU 2014-03, this would permit transition provisions that extend the transition guidance indefinitely.
- A first time preferability assessment of why electing any of the Accounting Standards Updates listed above would no longer be required. Any subsequent change to the election would require justification and documentation of that assessment. This would allow private companies that fall within the scope of the Accounting Standards Updates listed above to elect the alternatives as facts and circumstances change, or as the companies become aware of the alternatives.
Comments on the Exposure Draft are due by November 16, 2015. The full text of the Exposure Draft is available by clicking here.
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