PCC Flash Report - February 2014
On February 19, 2014, the FASB endorsed a PCC proposal to allow private companies to opt out of applying the variable interest entity (VIE) consolidation guidance to certain common control leasing arrangements. Therefore, a private company lessee that meets the eligibility criteria and elects not to apply the VIE guidance would account for its lease under Topic 840 as either an operating or capital lease, as appropriate. Certain incremental disclosures would also be required. A final ASU has not been issued, but is anticipated in late March. The FASB has indicated that upon issuance of the ASU, early adoption will be available for 2013 year-end financial statements that are not yet available for issuance.