The Financial Accounting Standards Board has released Accounting Standards Update No. 2018-17, "Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities," expanding the nonpublic company alternative that allows nonpublic companies to elect not to apply VIE guidance to legal entities under common control. The current guidance supersedes the 2014 nonpublic company exception applying to common control leasing agreements and, if elected, must be applied to all applicable entities under common control. Entities must meet the following criteria to qualify:
The amendments in the update are effective for a nonpublic company for fiscal years beginning after Dec. 15, 2020, and interim periods within fiscal years beginning after Dec. 15, 2021. The amendments must be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. For more information contact us in one of our many locations.
Wednesday, April 24, 2019 | 7:30 AM – 9:30 AM EDT | The Hartford Club