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 a final standard.
June 24, 2009 Board Meeting
Reconsideration of the scope of Statement 160. The Board discussed input it had received from investors on its previous decisions on how to clarify the scope of the partial sale and deconsolidation provisions of FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements.
After considering that input, the Board affirmed the following decisions reached at the April 29 Board meeting:
The Board decided to modify the scope of Statement 160 such that the partial sale and deconsolidation provisions would apply only to subsidiaries that are businesses or nonprofit activities. The Board also decided to address the matters raised in EITF Issue No. 08-10, “Selected Statement 160 Implementation Questions,” for which the EITF had not yet reached a final consensus. The Board decided:
- To modify EITF Issue No. 01-2, “Interpretations of APB Opinion No. 29,” to clarify that the exchange of a group of assets that constitutes a business in return for an equity interest should be accounted for in accordance with the deconsolidation provisions of Statement 160.
- That the partial sale and deconsolidation provisions of Statement 160 would not apply to in-substance real estate transactions.
- That Statement 160 would apply when a subsidiary is transferred to an equity method investee or joint venture.
The Board also decided to propose the following additional disclosure requirements:
- When an entity deconsolidates a subsidiary but retains a direct or indirect retained investment in that former subsidiary, the entity would measure that retained interest at fair value at the deconsolidation date. It would disclose the valuation technique(s) used to measure the fair value of that retained investment and any other information that enables users of its financial statements to assess the inputs used to develop the measurement.
- When an entity achieves a business combination in stages, it would remeasure to fair value the equity interest in the acquiree that it owned before the business combination. In those cases, the acquirer would disclose the valuation technique(s) used to measure the fair value of that retained investment and any other information that enables users of its financial statements to assess the inputs used to develop the measurement.
- When an entity deconsolidates a subsidiary, the entity would disclose the nature of its continuing involvement in the deconsolidated subsidiary.
The Board also decided that an entity would apply those new requirements upon its adoption of Statement 160. If an entity has already adopted Statement 160, it would apply these new requirements retroactively to all prior periods presented beginning in periods ending after December 15, 2009.
The Board directed the staff to proceed to a draft of a proposed Accounting Standards Update for vote by written ballot.