Accounting Standards Update No. 2011-10, Property, Plant, and Equipment (Topic 369)

Accounting Standards Update No. 2011-10, Property, Plant, and Equipment (Topic 369)

The FASB's goal here is to codify the treatment for derecognition of in Substance Real Estate subsidiary.

Now, when a parent ceases to have a controlling interest in the subidiary that is in substance real estate, as a result of default on the sub's debt, the parent will apply subtopic 360-20 to determine whether or not to derecognize the subsidiary.  Generally, the parent would not derecognize, because it not likely the parent to meet the requirements (legal transfer to lender, etc.) - so therefore, even if parent no longer has controlling interest under Subtopic 810-10, the parent would still recognize the subsidiary debt and its operations on the parent's consolidated financials statements.

Effective Dates:

Public Entities: effective for annual periods for fiscal years, and related interim periods, beginning on or after June 15, 2012.

Non-Public Entities: effective for annual period for fiscal years ending after December 15, 2013.

Early application is permitted

Note: this ASU does not eliminate the difference between US GAAP and IFRS.

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