United States

Proposed reorganization of consolidation guidance


In response to concerns that its consolidation guidance is difficult to understand and navigate, the Financial Accounting Standards Board (FASB) recently issued a proposed Accounting Standards Update (ASU), Consolidation (Topic 812) – Reorganization. If this proposed ASU is finalized, certain areas of the consolidation guidance would be clarified to make it easier to understand without the intent of affecting how consolidation analyses are performed or outcomes currently reached. In addition, the consolidation guidance would be reorganized as follows:

  • Guidance currently in Topic 810, “Consolidation,” of the FASB’s Accounting Standards Codification would be reorganized into new Topic 812, “Consolidation,” with separate Subtopics:
    • 812-20, “Consolidation – Variable Interest Entities”
    • 812-30, “Consolidation – Voting Interest Entities”
  • The guidance for “Consolidation of Entities Controlled by Contract” would be moved to Topic 958, “Not-for-Profit Entities,” as that guidance is applicable only for not-for-profit entities
  • The guidance in Subtopic 810-30 for research and development arrangements would be superseded

The proposed ASU is available for comment until December 4, 2017.