FASB issued a proposed Accounting Standards Update (ASU) on Thursday, Oct. 27, that aims to provide investors and other allocators of capital with more “decision-useful information” in a joint venture’s separate financial statements.
The proposed ASU would apply to the formation of entities that meet the definition of a joint or corporate venture as defined in the FASB Accounting Standards Codification (ASC) Master Glossary.
While FASB defines joint ventures in the master glossary, there is no specific guidance in the ASC that applies to the formation accounting by a joint venture in its separate financial statements, specifically the joint venture’s recognition and initial measurement of net assets.
FASB will accept feedback on the proposed ASU through Dec. 27, 2022. Learn more.