The Financial Accounting Standards Board is seeking comments on a proposed Accounting Standards Update that would smooth out a bit of diversity in how companies deconsolidate certain real estate assets because of a debt default.
FASB’s Emerging Issues Task Force recommended FASB adopt the rule to tell companies they must treat real estate as real estate, even if it is contained in a stand-alone subsidiary that does little else than hold the real estate assets. FASB says the guidance would improve Generally Accepted Accounting Principles by eliminating practice differences and emphasizing that accounting should reflect the substance of the transaction rather than the form.
