Proposed Amendments to FAS 67 | AccountingWEB

Proposed Amendments to FAS 67

The Financial Accounting Standards Board (FASB) has proposed to amend Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, to exclude from its scope the accounting for acquisition, development, and construction costs of real estate developed and used by an entity for subsequent rental activities.

The accounting for those costs would be subject to the guidance in an Exposure Draft of a proposed Statement of Position (SOP) issued by the Accounting Standards Executive Committee (AcSEC) of the American Institute of Certified Public Accountants (AICPA). The FASB and AcSEC are jointly responsible for setting U.S. accounting standards for level B of the hierarchy of generally accepted accounting principles.

The FASB’s proposal also would amend APB Opinion No. 28, Interim Financial Reporting, to require that the costs that the proposed SOP would require be expensed as incurred on an annual basis also be expensed as incurred in interim periods.

AcSEC drafted the proposed SOP to address diversity in accounting for expenditures related to property, plant and equipment (PP&E), including improvements, replacements, betterments, additions, repairs and maintenance. The proposed SOP addresses accounting and disclosure issues related to determining which costs related to PP&E should be capitalized versus those that should be charged to expense as incurred. The proposed SOP also addresses capitalization of indirect and overhead costs and component accounting for PP&E.

If adopted as a final Statement, the FASB proposal would be effective for annual and interim financial statements for fiscal years beginning after June 15, 2002, with earlier adoption encouraged. The comment period ends October 15, 2001.

You can download the exposure drafts of the SOP and the FASB proposal.

Comments relating to the AICPA Exposure Draft should be submitted by October 15 and should be directed to Mark Simon, msimon@aicpa.org. Comments relating to the FASB Exposure Draft should be submitted by October 15 to director@fasb.org.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

WHAT KIND OF FIRM ARE YOU?
As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.