FASB Proposed FSP FAS 144-c, Classifying and Accounting for a Depreciable Asset as Held-for-Sale When an Equity Method Investment is Obtained

FASB: Proposed FSP FAS 144-c, "Classifying and Accounting for a Depreciable Asset as Held-for-Sale When an Equity Method Investment is Obtained"

Project Updates

Proposed FSP FAS 144-c, "Classifying and Accounting for a Depreciable Asset as Held-for-Sale When an Equity Method Investment is Obtained"

Project Summary

Last Updated: January 2, 2008 (Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

Objective
Exposure Draft
*Decisions Reached at the Last Meeting
*Board Meetings/Public Meeting Dates
History and Background
Contact Information

Objective

The objective of this project is to address whether an entity should continue to depreciate a long-lived asset classified as held-for-sale when the entity plans to account for its direct or indirect interest in the long-lived asset as an equity method investment once the asset is sold.

Exposure Draft

On October 26, 2006, the Board issued proposed FSP FAS 144-c, "Classifying and Accounting for a Depreciable Asset as Held-for-Sale When an Equity Method Investment Is Obtained."

The 45-day public comment period for the proposed FSP ended on December 15, 2006.

*Decisions Reached at the Last Meeting

In December 2007, the Board removed this project from its agenda.

*Board Meeting and Public Meeting Dates

The Board meeting minutes 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 become final only after a formal written ballot to issue a final Statement, Interpretation, or FSP.

*December 19, 2007 Board Meeting—Removal of the project from the Board's agenda
October 11, 2006 Board Meeting—Issuance of Proposed FSP FAS 144-c, "Classifying and Accounting for a Depreciable Asset as Held-for-Sale When an Equity Method Investment Is Obtained," for public comment

History and Background

Paragraph 30 of FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, states that a long-lived asset to be sold shall be classified as held for sale when certain criteria are met. Paragraph 34 of Statement 144 requires that an entity shall not depreciate a long-lived asset once it is classified as held-for-sale. Currently, there is diversity in practice amongst preparers and auditors on whether an entity should continue to depreciate a long-lived asset classified as held-for-sale when the entity plans to account for its direct or indirect interest in the long-lived asset as an equity method investment once the asset is sold. The FASB staff has received technical inquiries from several accounting firms requesting the staff's views on this issue.

Contact Information

David C. Leverenz
Industry Fellow
dcleverenz@fasb.org