Was your company required to consolidate the real estate company into its financial statements as a Variable Interest Entity? The Financial Accounting Standards Board (FASB) has reviewed this issue and has formally issued a proposal, Applying Variable Interest Entity Guidance to Common Control Leasing Arrangements for public comment. This proposal would exempt many private companies from the requirement to apply variable-interest entity (VIE) consolidation guidance to lessor companies under common control. If this proposal is approved, the real estate company would no longer be required to be consolidated into the company books. This may not only simplify your financial reporting but may also eliminate the costs associated with preparing and reporting on the consolidated company.
What can you do to help?
This proposal is available for public comment until October 14, 2013. It is important for private companies to review the proposal and voice their opinions during this period. The opinion of financial statement users is a critical factor in the implementation of the proposed change to the accounting standards.
The exposure draft in its entirety can be found on the FASB website athttp://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1175805074609. Public opinion can be provided by clicking the “Electronic Feedback Form” for the proposal at the website found above.
For information regarding this topic, please consult Brandi DiGiorgio firstname.lastname@example.org or your MarksNelson professional at 816.743.7700.