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.Wednesday, October 24, 2018 FASB Board Meeting
Simplifying the balance sheet classification of debt. The Board continued redeliberations of proposed Accounting Standards Update, Debt (Topic 470): Simplifying the Classification of Debt in a Classified Balance Sheet (Current versus Noncurrent).
Classification Principle—Unused Long-Term Financing Arrangements
The Board directed the staff to conduct additional research, focusing on a potential alternative that considers the contractual linkage between certain debt arrangements and unused long-term financing arrangements in place at the balance sheet date. That research also would consider the need to include other conditions within or surrounding that financing arrangement, such as the financial capability of the lender, the existence of a subjective acceleration clause, the required use of the proceeds, and the timing and terms of the arrangements.
Accounting for certain identifiable assets in a business combination and subsequent accounting for goodwill for public business entities and not-for-profits. The Board discussed the research project on the subsequent accounting for goodwill and the accounting for certain identifiable intangible assets in a business combination.
The Board decided to add a project to the technical agenda for not-for-profit entities and directed the staff to draft a proposed Accounting Standards Update for vote by written ballot to extend the amendments in Accounting Standards Update No. 2014-02, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill (a consensus of the Private Company Council), and Accounting Standards Update No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination (a consensus of the Private Company Council), to not-for-profit entities.
The Board decided that the comment period for the proposed Update would be 60 days.
The Board decided to add another project to the technical agenda and directed the staff to draft an Invitation to Comment to obtain formal input from stakeholders on the subsequent accounting for goodwill, the accounting for certain identifiable intangible assets, and the scope of the project on those topics.
Codification improvements—financial instruments—credit losses. The Board discussed comment letter feedback on the proposed Accounting Standards Update, Codification Improvements to Topic 326, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (Update 2016-13). The Board reaffirmed its decisions in the proposed Update to amend the guidance in Topic 326 as follows:
- Mitigate transition complexity by providing separate and staggered effective date requirements for public business entities (PBEs) that meet the definition of a Securities and Exchange Commission (SEC) filer, PBEs that do not meet the definition of an SEC filer, and all other entities, including not-for-profit entities and employee benefit plans within the scope of Topics 960 through 965 on plan accounting. Transition complexity would be reduced by amending paragraph 326-10-65-1 to require that nonpublic business entities, including not-for-profit entities and employee benefit plans within the scope of Topics 960 through 965, adopt the amendments in Update 2016-13 for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years.
- Clarify that operating lease receivables accounted for under Topic 842, Leases, are excluded from the scope of Subtopic 326-20.
Analysis of Costs and Benefits
The Board concluded that it has received sufficient information and analysis to make an informed decision on the issues presented and that the expected benefits of the amendments justify the expected costs.
The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.