March 24, 2022
The Emerging Issues Task Force (EITF) met on March 24, 2022, and deliberated the following topics:
Issue No. 21-A, “Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” The Task Force tentatively concluded that the proportional amortization method of accounting should be expanded to all tax credit investments that meet the criteria in paragraph 323-740-25-1. Additionally, the Task Force tentatively concluded that:
- The proportional amortization method accounting policy election should apply to all tax credit investments that meet the criteria in paragraph 323-740-25-1. That is, an entity could elect to apply the proportional amortization method to all tax credit investments that meet the criteria in paragraph 323-740-25-1 or to no tax credit investments that meet the criteria in paragraph 323-740-25-1.
- The criteria in paragraph 323-740-25-1(a), (b), and (c) should be retained with no additional clarification to those criteria.
- The criterion in paragraph 323-740-25-1(aa) should be retained with a clarification that in multitiered structures the criterion would be evaluated in relation to the operations of the underlying project.
Also, at the March 24, 2022 EITF meeting, the participating observer from the Securities and Exchange Commission (SEC) provided a staff announcement on the following topic: Rescission and Update of Prior SEC Staff Announcements and Observer Comment as a Result of Amendments to Employee and Nonemployee Share-Based Payment Accounting.
EITF Meeting Recaps are provided for those interested in following the activities of the EITF. More details on the EITF’s projects can be found within the meeting minutes, which will be published on the FASB website in the coming weeks.