The Financial Accounting Standards Board today issued a proposed accounting standards update intended to improve accounting and disclosures for equity method investments in tax credit structures. The board is asking stakeholders to review the proposed update and provide comments by Oct. 6. The project was added to FASB’s agenda based at the request of the American Bankers Association, among others.
The change, if codified, allows proportional amortization accounting for any tax credit investment that meets the criteria. Previously only qualified affordable housing projects could utilize the accounting election. The election would be on a program-by-program basis and includes additional clarifications to the existing criteria. ABA will comment on the proposal.