FASB proposes clarification in derecognition guidance

The board is midway through a larger project.

FASB has proposed a clarification of the scope of its nonfinancial asset derecognition guidance.

Amendments by the board 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 accounted for as acquisitions or disposals of assets, or acquisitions or disposals of businesses.

The new issuance is 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 will be accepted through Aug. 5 and can be submitted at the board's website, fasb.org.

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