On The Horizon - January 29, 2013

Author:Ms Grant Thornton's Audit Practice Group
Profession:Grant Thornton LLP

FASB discusses proposed changes to investment company guidance

All decisions reached at Board meetings are tentative and may be changed at future meetings. Decisions are included in an Exposure Draft only after a formal written ballot. Decisions reflected in Exposure Drafts are often changed in redeliberations by the Board based on information received in comment letters, at public roundtable discussions, and from other sources. Board decisions become final after a formal written ballot to issue a final Accounting Standards Update.

At its January 23 meeting, the Board discussed the following topics related to proposed changes to the guidance for accounting by investment companies.

IASB changes to investment company assessment

The FASB tentatively decided not to make changes to its proposed investment company guidance similar to changes made by the IASB before issuing the final IFRS standard, Investment Entities. The IASB made the following changes, among others, to the investment company assessment guidance jointly agreed upon originally with the FASB:

Replacing the requirement for investment entities to have an exit strategy for substantially all investments by instead precluding investment entities from holding investments indefinitely Changing the requirement for investment entities to manage substantially all investments on a fair value basis to requiring substantially all investments held by an investment entity to be measured at fair value Deciding that an entity may still be considered an investment entity if it provides substantive investment-related services to third parties Disclosures by investment companies

The Board tentatively decided that an investment company would be required to disclose the following in its financial statements:

In relation to its investments: The amount of financial support provided during the periods presented, disclosed separately for support that was contractually required and support that was not contractually required The amount of financial support contractually required but not yet provided The...

To continue reading