The US Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) No. 2017-02, Not-for-Profit Entities - Consolidation (Subtopic 958-810): Clarifying When a Not-for-Profit Entity That Is a General Partner or a Limited Partner Should Consolidate a For-Profit Limited Partnership or Similar Entity.
The ASU provides clarifies on this issue following application of the amendments in ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis.
Under current US generally accepted accounting principles (US GAAP), a not-for-profit (NFP) entity that is a general partner of a for-profit limited partnership is required to apply the consolidation guidance in FASB Accounting Standards Codification Subtopic 810-20, Consolidation—Control of Partnerships and Similar Entities, unless that partnership interest is reported at fair value in conformity with certain other guidance. However, once ASU 2015-02 becomes effective, the Subtopic 810-20 guidance will no longer exist. This creates uncertainty about when an NFP entity that is a general partner should consolidate a for-profit limited partnership. ASU 2017-02 retains the consolidation guidance under Subtopic 810-20 by including it within Subtopic 958-810.
ASU 2017-02 also adds to Subtopic 958-810 the general guidance in Subtopic 810-10 on when NFP limited partners should consolidate a limited partnership.
ASU 2017-02 is available from the FASB on this link.
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