FASB proposes clarifying scope of nonfinancial asset derecognition guidance

By Ken Tysiac

FASB on Monday issued a proposal designed partly to clarify the scope of its nonfinancial asset derecognition guidance.

The proposal includes amendments that would address:

  • The scope of its nonfinancial asset derecognition guidance and clarify its reference to “in substance financial assets.”
  • Guidance on partial sales of nonfinancial assets.

The proposal is part of Phase 2 in a three-phase project on clarifying the definition of a business with the objective of adding guidance to assist entities in evaluating whether transactions should be counted for as acquisitions or disposals of assets, or acquisitions or disposals of businesses.

In Phase 1, the board proposed guidance to assist entities in applying the definition of a business in Proposed Accounting Standards Update, Business Combinations (Topic 805): Clarifying the Definition of a Business, which was issued in November.

On Monday, the board issued Proposed Accounting Standards Update, Other Income—Gains and Losses From the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.

Comments on Monday’s proposal will be accepted through Aug. 5 and can be submitted at the board’s website.

Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.