The PCC approved a final standard that offers private companies an exemption from applying the VIE consolidation model to certain common control leasing arrangements.
At its November 12, 2013 meeting, the Private Company Council (PCC) voted to finalize an Accounting Standards Update (ASU) that would offer private companies an exemption from applying the variable interest entity (VIE) consolidation model to certain common control leasing arrangements.
The approved alternative is now subject to final endorsement by the FASB. If endorsed, the final ASU would likely be issued in either late 2013 or early 2014, and early adoption would be permitted.
Also at its November meeting, the FASB staff provided an update on the status of the two previously approved accounting alternatives, related to the accounting for goodwill subsequent to a business combination and the simplified hedge accounting approach for certain interest rate swaps. The FASB plans to discuss the endorsement of these alternatives at its November 25, 2013 board meeting. If endorsed, it is expected that final ASUs for these alternatives could be released before the end of 2013. The alternatives would be effective for fiscal years beginning after December 15, 2014 with early adoption permitted.
The FASB and PCC are also close to finalizing the Private Company Decision-Making Framework, and the related Definition of a Public Business Entity project. Both are expected to be released before the end of 2013. The Definition of a Public Business Entity project will be used to determine which entities are eligible to apply the accounting and reporting alternatives approved by the FASB and the PCC.