Tentative Board Decisions
Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.
Consolidation targeted improvements to related party guidance for variable interest entities. The Board discussed (1) comments from external reviewers on a draft of the proposed Accounting Standards Update on Topic 810 on improvements to related party guidance for variable interest entities (VIEs) and (2) any remaining issues, including costs and benefits, and made the following decisions.
Private Company Accounting Alternative
Determination of Whether Common Control Exists
The Board decided that the determination of whether common control exists should be consistent with the amendments in Accounting Standards Update No. 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements.
Application of VIE Guidance for an Entity That Can No Longer Apply the Private Company Accounting Alternative
The Board decided that a reporting entity should apply the VIE guidance on a prospective basis if any of the conditions in the private company accounting alternative cease to be met except in situations in which the reporting entity becomes a public business entity. In those situations, the entity would apply VIE guidance in accordance with Topic 250, Accounting Changes and Error Corrections.
Effective Date and Transition Provisions
The Board decided that the effective date and transition provisions for all the amendments in the proposed Update should be consistent for all entities.
Decision-Making Fees and VIE Related Party Guidance
Replacing Economic Interest with Variable Interest
The Board decided that the term economic interest should be replaced with variable interest throughout paragraph 810-10-55-37D of the proposed Update.
Cost and Benefit Analysis and Comment Period
The Board decided that the benefits of the amendments in the proposed Update justify the expected costs.
The Board decided that the comment period deadline for the proposed Update should be the later of 75 days from the issuance of the proposed Update and September 29, 2017.
The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot.