Alert: FASB Accounting Standards Update No. 2016-07 - Investments: Equity Method and Joint Ventures

Category: US GAAP

Alert: FASB Accounting Standards Update No. 2016-07 - Investments: Equity Method and Joint Ventures

On March 15, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-07 Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The ASU seeks to reduce the cost and complexity of Topic 323.

Currently, when an entity qualifies to use the equity method in response to a change in its ownership interest or degree of influence in an investment, US GAAP requires that the equity method be adopted retroactively. The amendments to Topic 323 allow an entity to apply the equity method prospectively as at the date of the increase in the entity’s ownership interest or degree of influence in an investment.

The amendments are effective for fiscal years beginning after December 15, 2016, including interim periods therein, for all entities. Earlier application is permitted.

To access the full script of ASU No. 2016-07 click here.

This communication contains a general overview of the topic and is current as of March 15, 2016. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional, who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2016. All rights reserved.

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.