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.

November 25, 2013 FASB Board Meeting

FASB Endorsement of Private Company Council (PCC) Decisions.  The Board endorsed the following decisions that the PCC made at its meeting on September 30 and October 1, 2013:

PCC Issue No. 13-01B, “Accounting for Goodwill”

A private company can elect to amortize goodwill over 10 years, or a private company can elect to amortize goodwill over a period of less than 10 years, if it demonstrates another useful life is more appropriate. Under this alternative, a private company also should elect to test goodwill for impairment at the entity level or the reporting unit level. Goodwill should be tested for impairment if there is a triggering event that indicates that the carrying value of the entity may be less than its fair value (or the carrying value of the reporting unit may be less than the fair value of the reporting unit). A goodwill impairment will be the excess of the carrying amount of the entity or reporting unit over its fair value.

For further details, refer to the September 30 and October 1, 2013 PCC Decision Overview.

PCC Issue No. 13-03A, “Accounting for Receive-Variable, Pay-Fixed Interest Rate Swaps—Simplified Hedge Accounting Approach”

A private company, other than a financial institution, can elect a simplified hedge accounting approach for certain types of interest rate swaps that economically convert variable-rate interest payments to fixed-rate payments. The simplified hedge accounting approach is a practical expedient to obtain cash flow hedge accounting under Topic 815, Derivatives and Hedging, and the approach assumes no ineffectiveness. Under the simplified hedge accounting approach, a private company has the option to measure the designated swap at settlement value instead of fair value. In addition, the approach allows for hedge documentation to be completed up until the date on which the financial statements are available to be issued instead of requiring that the documentation be completed concurrently at the inception of the hedge.

For further details, refer to the September 30 and October 1, 2013 PCC Decision Overview.

Public Business Entities and Not-for-Profit Entities

The Board also considered the applicability of the endorsed decisions resulting from PCC Issues No. 13-01B and No. 13-03A to public business entities and not-for-profit entities (NFPs) and made the following decisions:

a.  The Board added a project to its agenda on the accounting for goodwill for public business entities and NFPs. The Board directed the staff to perform additional outreach and research on the following four alternatives:

  1. The PCC alternative
  2. Amortization of goodwill over its useful life not to exceed a maximum number of years
  3. Direct write-off of goodwill
  4. Simplified impairment test.


b.  The Board did not add a project to its agenda on the simplified hedge accounting approach for public business entities and NFPs because it plans to consider the matter as part of its hedging project.