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June 15 – Participating mortgages, fair value in reporting on employee stock ownership plans and the term subsidiary as it relates to taxes are three topics in which accounting rulemakers sought to clarify or correct current rules in a new set of technical corrections and minor improvements.
The Financial Accounting Standards Board issued the 89-page document containing the set of wide-ranging, small corrections and improvements June 12. FASB issued it as an accounting standards update (ASU 2015-10).
The board doesn't expect the majority of the changes in the ASU to change current accounting practice, according to the new standard.
One of the areas of accounting that FASB concluded warrant corrections pertains to disclosures about transfers and servicing of financial assets (ASC 860, formerly FAS 166). In that extant guidance, the board incorrectly added the word “public,” conveying the notion that only public entities were subject to the rules.
In the fresh guidance, FASB reiterated that it is to apply to all entities—the clear intent of the original set of rules, according to the board.
On that topic and others, FASB decided to include guidance on how to shift to the corrected or clarified standard. The board stated that such transition guidance is appropriate “because an entity may have relied on guidance that may have incorrect or unclear wording or references,” according to the ASU.
The amendments in the new ASU that require instructions on transition will be effective for fiscal years, as well as for interim periods within those years, starting after Dec. 15, 2015.
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The accounting standards update containing the technical corrections and improvements is available at http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156316498.
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