United States

FASB Agrees to Issue New Consolidation Guidance

Jul 23, 2014
From the Financial Reporting Network

This edition of Defining Issues reports that at its July 16 meeting, the FASB voted to issue a new consolidation standard that would change the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a variable interest entity (VIE), and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The Board decided to exclude from the U.S. GAAP consolidation requirements money market funds that are required to comply with Rule 2a-7 of the Investment Company Act of 1940 or that operate in accordance with requirements similar to those in Rule 2a-7.

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