On the Horizon - May 28, 2013

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

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.

Meetings held May 23 and 24

The FASB met on May 23 to discuss its projects on revenue recognition, insurance contracts, and repurchase agreements and similar transactions, which are summarized below.

In addition, the FASB and the IASB held a joint meeting on May 24 to discuss their projects on revenue recognition and on the classification and measurement of financial instruments. The Boards did not reach any tentative decisions on their financial instruments classification and measurement project, but highlights of the revenue discussion will be summarized in a future On the Horizon.

Revenue recognition

At its May 23 meeting, the FASB tentatively decided that the proposed revenue guidance relating to the recognition, measurement, and existence of a contract would apply to sales or transfers of nonfinancial assets to noncustomers if those assets do not constitute a business.

Insurance contracts

The Board discussed the costs and benefits of the proposed changes on accounting for insurance contracts and directed the staff to draft a proposed Accounting Standards Update (ASU) for a vote. The Board also decided to hold public roundtable meetings following the comment period for the proposed ASU to solicit further views on the proposed guidance.

Repurchase agreement and similar transactions

The FASB discussed the feedback received on the proposed ASU, Effective Control for Transfers with Forward Agreements to Repurchase Assets and Accounting for Repurchase Financings, and tentatively decided to

Retain the current effective control model Require additional disclosures for transfers of financial assets with contemporaneous agreements that result in the transferor retaining risks associated with the transferred financial asset FAF completes post-implementation review of Statement 141(R)

The Financial Accounting Foundation (FAF) recently completed its post-implementation review of FASB Statement 141(R), Business Combinations, which has been codified in FASB Accounting...

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