Defining Issues | October 2016
ASU changes VIE analysis of indirect interests held through related parties under common control. Now on a proportionate basis.
KPMG reports FASB changes on VIE primary beneficiary. ASU changes VIE analysis of indirect interests held through related parties under common control. Now on a proportionate basis.
ASU 2016-17
Mandatory effective dates and early adoption provisions:
Annual periods:
For public business entities the effective date for annual periods is the fiscal years beginning after Dec. 15, 2016.
For all other entites the effective date for annual periods is the fiscal years beginning after Dec. 15, 2016.
Interim periods:
For public business entities the effective date for interim periods is the fiscal years beginning after Dec. 15, 2016.
For all other entites the effective date for interim periods is the fiscal years beginning after Dec. 15, 2017.
How a decision maker or service provider considers indirect interests held through related parties under common control | ||
---|---|---|
Consolidation step | Current US GAAP | ASU |
Determine whether a decision marker's fee is a variable interest | Consider interests held by these related parties in their entirety | No change |
If the fee is a variable interest, determine whether the decision maker is the primary beneficiary of the variable interest entity (VIE) | Consider interests held by these related parties in their entirety | Consider interests held by related parties on a proportionate basis |
FASB makes change to VIE test
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