Capital Markets Accounting Developments Advisory 2010-2

March 10, 2010
FASB finalizes deferral of FAS 167 for certain investment funds and other FAS 167 amendments - A summary of ASU 2010-10

The FASB deferred the application of FAS 167 for certain investment entities having the attributes of entities subject to ASC 946 (the "investment company guide"). Such investment entities cannot be financially supported by the reporting enterprise (the party evaluating the entity).

The deferral of FAS 167 also applies to registered money market funds and unregistered funds that operate in a manner similar to registered money market funds, even if they are being financially supported by the reporting enterprise.

The FASB also amended the requirements for evaluating whether a decision-maker or service contract is a variable interest. The guidance clarifies that a quantitative approach should not be the sole consideration when making this assessment. ASU 2010-10 also clarifies that parties related to the reporting enterprise should be considered when evaluating each of the criteria required to be assessed.

For calendar-year reporting companies, the effective date of the deferral and amendments is January 1, 2010.