At its meeting last week, the Financial Accounting Standards Board (FASB) said it would revisit its prior decisions on whether to require management to assess any doubt about an entity’s ability to continue as a going concern. This change in direction dovetails with the board’s recent decision “not to pursue going-concern-type disclosures” in its projects on liquidity and interest rate risk disclosures, according to a recent summary. The board will continue to work closely with regulators (the SEC, PCAOB, etc.) and the AICPA on the questions; it also directed its staff to continue with the balloting process for a proposed ASU (accounting standards update) on the liquidation basis of accounting.
At the same meeting—and in the context of its project to define a nonpublic entity—the FASB also decided that for standard-setting purposes, a private company would not include a “for-profit entity that is a conduit bond obligor for conduit debt securities that are traded in a public market.” This will be true “even if the entity otherwise meets the characteristics of a private company as defined in this project,” the summary said.
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