FASB EITF Approves Changes to GAAP Accounting For LIHTC

Published by Michael Novogradac on Friday, November 15, 2013 - 12:00am

Today, the Financial Accounting Standards Board’s Emerging Issues Task Force (EITF) approved generally accepted accounting principles (GAAP) amendments for low-income housing tax credit (LIHTC) investments.

The approval came at the end of the EITF meeting that included consideration of additional issues regarding Issue 13-B, Accounting for Investments in Qualified Affordable Housing Projects.

The EITF agreed that LIHTCs should not be classified as a deferred tax asset. It also agreed to permit using the primary source of economic benefit for determining the pattern of amortization, which means amortization may occur over the LIHTC credit period.  The EITF also decided not to issue a revised exposure draft for LIHTCs.

The EITF also decided to issue an exposure draft for the application of the updated accounting rules to other tax credit investments.

Final approval awaits consideration by the Financial Accounting Standards Board, scheduled for December 11.

Stay tuned for additional analysis regarding the implications of the new accounting guidance.