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.

July 16, 2014 FASB Board Meeting

Consolidation—Principal versus Agent Analysis. The Board redeliberated the remaining issues on the November 2011 proposed FASB Accounting Standards Update, Consolidation (Topic 810): Principal versus Agent Analysis.

Alignment of the Definition of Participating Rights

The guidance in the proposed Update would have changed the voting interest entity (VOE) definition of participating rights to align with the variable interest entity (VIE) definition of participating rights. The Board decided to retain the current definition of participating rights for VOEs in Topic 810, Consolidation.

Applicability to Nonpublic Business Entities

The Board decided not to provide recognition, measurement, or disclosure alternatives for nonpublic business entities.

Cost and Benefits and Reexposure Considerations

The Board considered a staff analysis of the expected benefits and perceived costs of proposed changes to the consolidation guidance and concluded that those benefits justify the costs of change. The Board also considered its requirements for reexposure. The Board determined that reexposure was not necessary and decided to issue final guidance in an Accounting Standards Update, but only after an extended staff draft period and fatal-flaw process, which would include an extended time frame for external review by a broad range of stakeholders.


The Board affirmed the transition guidance proposed in the Exposure Draft; entities can choose between either the full or modified retrospective methods of application. Additionally, the Board decided not to provide a separate transition alternative for nonpublic business entities.

Effective Date

The Board decided that for public business entities, the final guidance should be effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Board decided that for nonpublic business entities, the final guidance should be effective for annual periods beginning after December 15, 2016, and interim periods beginning after December 15, 2017.

The Board decided to allow all entities the option of applying the new requirements in fiscal years beginning before the mandatory effective date.

FASB Ratification of EITF Consensuses. The Board ratified the following consensuses reached at the June 12, 2014 Emerging Issues Task Force meeting. The Board directed the staff to draft final Accounting Standards Updates reflecting those consensuses for a vote by written ballot.

Issue No. 12-G, "Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity"

This Issue provides an alternative to Topic 820, Fair Value Measurement, for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity that would eliminate the difference that results when both the financial assets and the financial liabilities of a collateralized financing entity are measured at fair value.

The minutes of the June 12, 2014 EITF meeting, which will be posted to the FASB website the week of July 21, 2014, describe the consensus in detail.

Issue No. 13-F, "Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure"

This Issue applies to government-guaranteed mortgage loans that have all of the following conditions: (a) the loan has a government guarantee that is not separable from the loan before foreclosure, (b) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and (c) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate property is fixed. A creditor should reclassify a government-guaranteed mortgage loan within the scope of this Issue to a separate other receivable at the time of foreclosure.

The minutes of the June 12, 2014 EITF meeting, which will be posted to the FASB website the week of July 21, 2014, describe the consensus in detail.

Insurance—Disclosures about Short-Duration Contracts. The Board discussed outreach performed to assess potential issues related to reinsurance and continued its discussion of disclosures about short-duration contracts.


The Board considered the staff’s analysis of stakeholder outreach and concluded that there were no reinsurance accounting issues that should be included in the scope of the insurance project.

Disclosures about Short-Duration Contracts

Incurred and Paid Claims Development Tables

The Board affirmed its previous decision to require insurance entities that issue short-duration insurance contracts to provide annual disclosures about claims liabilities (specifically, information about claims development, claims frequency, and claims duration) going back to the earliest period for which uncertainty arose about the amount and timing of claims payments, but need not exceed 10 years. The Board clarified that insurance entities would not be precluded from presenting more than 10 years of information about claims liabilities and that for certain aggregated information about claims with very short durations (such as health insurance claims), entities could provide information for fewer than 10 years.

The Board decided to also require disclosure of net outstanding claims from years prior to those presented in the claims development tables, aggregated or disaggregated in the same way that insurance entities aggregate or disaggregate disclosures about claims liabilities.

Qualitative Information about the Liability for Unpaid Claims and Claim Adjustment Expense

The Board decided to require entities to disclose in annual financial statements information about material changes in judgments made in calculating the liability for unpaid claims and claim adjustment expenses, including the reasons for the changes and the effects on the financial statements.

Health Insurance Claims

The Board decided that reporting entities should provide the same disclosures for all types of short-duration contracts, except that disclosures about health insurance claims need not include the percentage payout of claims by accident year.

Next Steps

The Board will continue redeliberating the disclosures about short-duration contracts at a future Board meeting.