Tentative Board Decisions
Tentative 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.
January 15, 2014 FASB Board MeetingReporting Discontinued Operations. The Board discussed the comments received on the proposed Accounting Standards Update, Presentation of Financial Statements (Topic 205): Reporting Discontinued Operations, and redeliberated the following issues, as described below.
Effective Date for Nonpublic Entities
The Board decided to retain the effective date that had been previously agreed on at the November 13, 2013 meeting. Nonpublic entities should apply the guidance in the final Update prospectively to all disposals (or classifications as held for sale) that occur within annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015, with earlier application permitted. While there was concern that some nonpublic entities might have a discontinued operation during the interim period reported under the current guidance that would not qualify as a discontinued operation at year-end under the Update, the Board agreed that nonpublic entities could choose earlier application to avoid this situation.
Conduit Bond Obligors
The Board decided that conduit bond obligors will have the same effective date as public entities, which is for disposals (or classifications as held for sale) that occur in annual periods beginning on or after December 15, 2014, and interim periods within that year. Some were concerned about the learning curve required for conduit bond obligors, questioning whether the effective date should be delayed by one year. However, the Board decided not to exclude one class of public companies from the scope of the Update when other classes of public companies might have difficulties applying the Update as well. Therefore, the effective date for conduit bond obligors will remain the same as the effective date for all public entities.
At the November 13, 2013 meeting, the Board decided to require disclosures about total operating and total investing cash flows for discontinued operations. Due to reviewer feedback stating that gathering this information might be difficult for highly centralized organizations, the staff proposed an alternative to disclose depreciation and amortization, capital expenditures, and significant noncash items related to the discontinued operation. Due to the undue cost and effort that might result from requiring disclosure of operating and investing cash flows, at this meeting, the Board decided to allow the option either to disclose the total operating and total investing cash flows of a discontinued operation or to disclose the depreciation and amortization, capital expenditures, and significant noncash items.
The Board directed the staff to draft an Accounting Standards Update that includes rewrites to simplify the wording within the Codification for preballot review.