Project Update

The Liquidation Basis of Accounting

Last updated on April 22, 2013.

(Updated sections are indicated with an asterisk *)

Project Objective
*Due Process Documents
*Decisions Reached at Last Meeting
*Summary of Decisions Reached to Date
*Next Steps
Board/Other Public Meeting Dates
Background Information
*Contact Information

Project Objective

The objective of this project is to provide guidance about when and how an entity should apply the liquidation basis of accounting.

*Due Process Documents

On April 22, 2013, the FASB issued Accounting Standards Update No. 2013-07, Presentation of Financial Statements (Topic 205): The Liquidation Basis of Accounting.

Download ASU 2013-07

Read the FASB News Release that introduced the Update

Read the FASB In Focus that summarizes the Update

Read the Comment Letter Summary for the Proposed Update

*Decisions Reached at Last Meeting (February 13, 2013)

See Board Meeting Minutes below.

*Summary of Decisions Reached to Date

See Accounting Standards Update No. 2013-07

*Next Steps

None

Board/Other Public Meeting Dates

The following are links to the minutes for each meeting.

February 13, 2013 Board Meeting—Scope, recognition and measurement, transition, and due process matters
December 12, 2012 Board Meeting—Recognition and Measurement
November 6, 2012 Board Meeting—Comment Letter Summary
May 2, 2012 Board Meeting—Liquidation Basis of Accounting and Project Objective
February 15, 2012 Board Meeting—Liquidation Basis of Accounting
January 11, 2012 Board Meeting—Project Scope and Objective
October 26, 2011 Board Meeting—Project Scope and Objectives
December 1, 2010 Board Meeting—Subsequent Events and Limited Life Entities
November 10, 2010 Board Meeting—Issues Raised by External Reviewers
March 31, 2010 Board Meeting—Disclosure Threshold and Liquidation Basis
January 13, 2010 Board Meeting—Project Scope
June 3, 2009 Board Meeting—Analysis of Additional Constituent Outreach
February 18, 2009 Board Meeting—Comment Letter Discussion
August 27, 2008 Board Meeting—Codification Discussion
September 19, 2007 Board Meeting—Removal from Board agenda
May 30, 2007 Board Meeting—Add Project to Board agenda

Background Information

The U.S. guidance for when and how to apply the liquidation basis of accounting is located in the AICPA Statement on Auditing Standards No. 1, Codification of Auditing Standards and Procedures, Section 9508, “Reports on Audited Financial Statements: Auditing Interpretations of Section 508,” and states that a liquidation basis of accounting may be considered GAAP for entities in liquidation or for which liquidation appears imminent. The objective of the liquidation basis of accounting is to provide financial statement users with relevant information about an entity’s resources and obligations by measuring and presenting assets and liabilities in the entity’s financial statements at the estimated amount of cash the entity expects to collect or the amount of cash the entity expects to pay to settle its obligations during the course of liquidation. Some constituents have expressed a need for accounting literature in this area because there is currently diversity in practice.

*Contact Information

Brian North
Project Manager
bnorth@fasb.org

Libby Van Wagenen
Postgraduate Technical Assistant
lvanwagenen@fasb.org

Diane Liu
XBRL Project Research Associate
dliu@fasb.org