In depth: FASB revises consolidation accounting

In depth Jun 27, 2014

A new standard, issued in June 2014, eliminates the concept of a development stage entity (DSE).


The FASB issued a new standard in June 2014 to eliminate the concept of a development stage entity (DSE) from today’s accounting guidance in its entirety. While originally the project was aimed at eliminating the incremental reporting requirements for DSEs, the consolidation guidance was also amended, impacting all companies that invest in these entities. In most cases, a different analysis will be required by an investor to determine if it should consolidate one of these entities. This, in turn, could cause changes in consolidation conclusions. Regardless of the conclusions, incremental disclosures will apply. The change to the consolidation analysis is effective from the beginning of 2016 for calendar year-end public companies.

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