Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

Wednesday, July 14, 2021 FASB Board Meeting

Agenda decision—troubled debt restructurings (TDRs). The Board discussed whether to add a project to its technical agenda to address the accounting for TDRs by creditors for entities that have adopted Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.

The Board added a project to its technical agenda to consider removing TDR recognition and measurement guidance for creditors from GAAP for entities that have adopted Update 2016-13 and to consider enhancing certain loan modification disclosures.


Agenda decision—accounting for acquired financial assets. The Board discussed whether to add a project to its technical agenda to address the accounting for acquired financial assets in accordance with Update 2016-13.

The Board added a project to its technical agenda to consider (1) expanding the scope of the purchased credit deteriorated (PCD) accounting model to all loans acquired in a business combination and (2) modifying the presentation of expected credit losses for acquired financial assets that meet the definition of PCD.

The Board also directed the staff to perform additional research and outreach related to the accounting for acquired financial assets including:
  • A potential scope expansion to apply PCD accounting to (a) other financial assets (not just loans) acquired in a business combination and/or (b) all acquired seasoned loans—including loans acquired in an asset acquisition
  • A potential scope reduction that would exclude debt securities, beneficial interests, credit cards and other revolving borrowing arrangements, trade accounts receivables, and other assets from the PCD accounting model
  • A potential change in measurement that would base the allowance for credit losses on the purchase price—instead of par—for those assets applying PCD accounting.

Codification improvements—financial instruments—credit losses (vintage disclosure: gross writeoffs and gross recoveries). The Board discussed whether (1) gross writeoffs and recoveries should be presented by year of origination in the vintage disclosure or (2) the project should be removed from the Board’s technical agenda and considered in conjunction with the Credit Losses Post-Implementation Review (PIR) process.

The Board decided to keep the project on its technical agenda and begin initial deliberations on whether gross writeoff and recovery information should be presented in the vintage disclosure.


Disclosure framework: disclosure review—inventory. The Board discussed whether to begin redeliberations on the amendments in proposed Accounting Standards Update, Inventory (Topic 330): Disclosure Framework—Changes to the Disclosure Requirements for Inventory. The Board decided to remove this project from its technical agenda.


Disclosure framework: disclosure—interim reporting. The Board discussed the form and content of interim financial statements and notes and the applicability of interim disclosure requirements to nonpublic entities. The Board decided to:
  1. Supersede paragraph 270-10-50-4 on filings without a balance sheet or a cash flow statement.
  2. Explicitly state that interim financial statements and notes can take the following forms:
    1. Financial statements prepared with the same level of detail as the previous annual statements subject to all the presentation requirements in generally accepted accounting principles (GAAP) and notes subject to all disclosure requirements in GAAP
    2. Financial statements prepared with the same level of detail as the previous annual statements subject to all the presentation requirements in GAAP and limited notes subject to the disclosure requirements in Topic 270, Interim Reporting
    3. Condensed financial statements and limited notes subject to the disclosure requirements in Topic 270.
  3. Specify that when presenting condensed statements or disclosing limited notes, the issuer ensure that the previous annual statements have been made available to the reader of its interim financial statements.
  4. Include guidance on condensed financial statements consistent with that in U.S. Securities and Exchange Commission (SEC) Regulation S-X, SEC Rule 10-01, Interim Financial Statements.
  5. Amend the Overview and Background Section of Topic 270 to explain how nonpublic entity interim reporting practices and financial reporting of interim financial statements and notes in accordance with GAAP interact with one another.
  6. Require all nonpublic entities that provide interim financial statements and notes in accordance with GAAP to disclose significant events or transactions that have material effects on an entity when providing limited notes.
  7. Require a qualitative disclosure that points the reader to the previous annual financial statements as well as provides context for the interim report relative to the annual period of which it is a part.
  8. Remove the parenthetical statement in paragraph 270-10-50-1 that states that the minimum disclosures of summarized interim financial data required of publicly traded companies are not in accordance with GAAP.
Next Steps

The staff will continue to draft a proposed Accounting Standards Update for vote by written ballot.