CPA & Business Advisory Blog

New Standards Affecting Development Stage Entities

In one of my earlier blogs, I referenced specific accounting standards required for Development Stage Entities (DSEs).

The Financial Accounting Standards Board (FASB) recently issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915), which eliminated all unique reporting requirements for these type of entities as well as removed an exception that was originally provided to DSEs in the evaluation of variable interest entities and whether they need to be consolidated.

The change in presentation and disclosure requirements is effective the first annual reporting period beginning after December 15, 2014.  The revised consolidation standard is effective the first annual reporting period beginning after December 15, 2015.  However, early adoption is permitted.  The ASU also provides an example disclosure for entities whose principal operations have not yet begun.

This new standard greatly simplifies reporting for these entities, which could be a great benefit to startup companies who are working on tight budgets.  However, users of these financials will need to be prepared for these changes and understand that less cumulative information will be provided on a go-forward basis.

If you have questions about the reporting requirements, please contact me at 440-449-6800 or email

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