ASU 2014-13 — Consolidation (Topic 810)

Topic 810 requires a reporting entity to consolidate a collateralized financing entity if it is the primary beneficiary of that collateralized financing entity. A collateralized financing entity is a variable interest entity that holds financial assets and issues beneficial interests in those financial assets. The beneficial interests have recourse only to the related financial assets of the collateralized financing entity and are classified as financial liabilities. Upon initial consolidation, many elect or are required to account for the financial assets and financial liabilities of the consolidated collateralized financing entity at fair value. The fair value of a collateralized financing entity's financial assets may differ from the fair value of its financial liabilities even though the financial liabilities have recourse only to the financial assets. Diversity in practice has developed in the accounting for that measurement difference in both initial consolidation and subsequent measurement of the fair values of the assets and the liabilities of a collateralized financing entity. This Update addresses that measurement difference.

The amendments would apply to reporting entities that are required to consolidate a collateralized financing entity under the Variable Interest Entity Subsections of Subtopic 810-10.

This Accounting Standards Update is the final version of Proposed Accounting Standards Update EITF-12R—Consolidation—Measuring the Financial Liabilities of a Consolidated Collateralized Financing Entity (Topic 810), which has been deleted.

Issued: August 5, 2014