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Minor Technical Corrections to GAAP Approved for Publication

The FASB agreed to publish a final version of a list of minor technical corrections and clarifications to U.S. GAAP. The changes are part of the accounting board’s periodic review of its Codification to find areas for relatively minor corrections and clarifications.

The FASB on April 7, 2015, approved a series of minor technical corrections to the Accounting Standards Codification and expects to soon publish the changes as final updates to U.S. GAAP.

Once published, companies and accountants must comply with the changes for annual and interim reports for periods that begin after December 15, 2015, which means 2016 for most calendar-year companies. The board agreed that companies could also voluntarily apply the changes ahead of time.

The changes stem from Proposed Accounting Standards Update (ASU) No. 2014-220, Technical Corrections and Improvements , which was released in September 2014.

The FASB agreed to most of the changes in the proposal, but scrapped a few that the board agreed were redundant or caused confusion as opposed to clarification.

The board rejected a small change to FASB ASC 820-10, Fair Value Measurement—Overall , formerly SFAS No. 157, after hearing concerns that it could lead to misinterpretation. Some audit firms and one individual said in comment letters that what was supposed to be a simple clarification about a shortcut could be misinterpreted to imply broader measurement changes. (See Comment Letters See Problems With Planned Corrections to Fair Value Accounting in the December 30, 2014, edition of Accounting & Compliance Alert .)

The FASB also decided not to finalize the proposed changes to the accounting standards for business combinations and real estate because the corrections were made in other accounting standards updates. It scrapped a small change to the standard on not-for-profit entities, asking its staff to do more research on the terminology to use for the change.

In addition, the board agreed to make three additional tweaks that were suggested in the seven comment letters submitted in response to the September proposal.

The first sentence of FASB ASC 255-10,, Changing Prices—Overall , was changed to clarify that trading securities can be held in any type of trading account.

In FASB ASC 320-10, Investments—Debt and Equity Securities—Overall , the board clarified that when one of a paired structured note is sold, it should be measured like a participating interest.

The board changed an illustration in FASB ASC 958-205 , Not-for-Profit Entities—Presentation of Financial Statements , to clarify the accounting for the expiration of restrictions imposed by donors.

The FASB rejected a request to change a reference to multiemployer pension plan accounting in FASB ASC 715-30, Compensation—Retirement Benefits—Defined Benefit Plans—Pensions, , because it would create confusion for not-for-profit organizations that are exempt from the disclosure requirements in the section.

In addition, the board agreed to publish transition guidance for the minor amendments approved for FASB ASC 274-10, Personal Financial Statements—Overall , formerly AICPA Statement of Position (SOP) No. 82-1; FASB ASC 470-30, Debt—Participating Mortgage Loans , formerly AICPA SOP No. 97-1; and FASB ASC 718-40, Compensation—Stock Compensation—Employee Stock Ownership Plans , formerly AICPA SOP No. 93-6.

The FASB periodically combs through the Codification of U.S. GAAP for errors, and it accepts suggestions from the public about corrections. The board compiles the proposed corrections and releases them for public comment.

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