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 30, 2013 FASB Board Meeting

Definition of a Nonpublic Entity. The Board discussed the feedback received on the August 7, 2013 Exposure Draft, Definition of a Public Business Entity: An Amendment to the Master Glossary, and began redeliberations on the project.

The Board reaffirmed the proposed definition of a public business entity with some refinements and clarifications. The proposed definition, marked to show the changes agreed to at the meeting, follows.

A business entity (which excludes a not-for-profit entity within the scope of Topic 958 or an employee benefit plan within the scope of Topics 960 through 965 on plan accounting) meeting any one of the following criteria would be considered public:

  1. It is required by the U.S. Securities and Exchange Commission (SEC) to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing).
  2. It is required by the Securities Exchange Act of 1934, as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency, other than the SEC.
  3. It is required to file or furnish financial statements with a regulatory agency (foreign or domestic) in preparation for the sale of securities or for purposes of issuing securities.
  4. It has (or is a conduit bond obligor for) unrestricted securities that are traded, quoted, or listed or can be traded on an exchange or an over-the-counter market.
  5. Its securities are unrestricted not subject to contractual restrictions on transfer, and it is required to provide prepare U.S. GAAP financial statements (including footnotes) and make them to be made publicly available on a periodic basis (for example, interim or annual periods) pursuant to a legal, contractual, or regulatory requirement. An entity must meet all conditions in order to meet criterion (e).

This excludes a not-for-profit entity (NFP) or an employee benefit plan within the scope of Topics 960 through 965 on plan accounting.

The Board also decided to:

  1. Clarify that an entity that otherwise does not meet any of the criteria in the definition of a public business entity generally would be permitted to apply accounting and reporting alternatives within U.S. GAAP in its standalone financial statements.
  2. Provide examples of what is intended by publicly available in criterion (e).
  3. Defer a decision about whether to amend the existing definitions of a nonpublic entity and a public entity in the Codification in a second phase of this project to a later date, given the Board’s agenda prioritization efforts that are currently under way.
  4. Reaffirm that the effective date of the final definition of a public business entity would be established concurrently with the first Update that uses the definition of a public business entity.

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