Action Alert No. 04-02
January 15, 2004

NOTICE OF MEETINGS

OPEN BOARD MEETINGS  

Wednesday, January 21, 2004, 9:00 a.m.

  1. Financial instruments: liabilities and equity. The Board will continue its consideration of an approach for distinguishing equity from liabilities and assets that is based on liquidity and ownership relationship criteria, including (a) "shares" that are unconditional obligations to pay cash or transfer other assets (mandatorily redeemable shares), (b) "shares" the issuer arguably is or could become economically compelled to redeem, and (c) unconditional obligations to transfer shares and rights to receive shares. The Board will discuss comparisons to alternative approaches based on a narrower view of equity and on the revisions to International Accounting Standard 32, Financial Instruments: Disclosure and Presentation. (Estimated 90-minute discussion.)

  2. Qualifying special-purpose entities and isolation of transferred assets. The Board will discuss issues related to the accounting for transfers of undivided interests in financial assets that have arisen in the redrafting of the amendment to FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. (Estimated 60-minute discussion.)

  3. Interpretation of Statement 87. The Board will discuss characteristics and features of so-called cash balance pension plans with the objective of defining the characteristics that any proposed measurement guidance would apply to. (Estimated 45-minute discussion.)

  4. Open discussion. If necessary, the Board will allow time to discuss minor issues with staff members on technical projects or administrative matters. Those discussions are held following regular Board meetings as topics come up.

OPEN EDUCATION SESSION

Wednesday, January 21, 2004, immediately following the Board meeting

The Board will hold an educational, non-decision-making session to discuss topics that are anticipated to be discussed at the January 28, 2004 Board meeting. Those topics will be posted to the FASB calendar four days prior to the education session.

BOARD ACTIONS

The Board Actions are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public hearings, and through other communication channels. Decisions become final only after a formal written ballot to issue a final Statement or Interpretation.

January 7, 2004 Board Meeting

FASB Staff Position (FSP). A majority of the Board directed the staff to issue a final FSP on the accounting and disclosure requirements related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act). The final FSP would modify the December 11, 2003 proposed FSP as follows:

  1. The final FSP would permit, rather than require, a plan sponsor to make a one-time election to defer recognition of the effects of the Act in accounting for its plan under FASB Statement No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, or in making disclosures related to its plan required by FASB Statement No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefits, until authoritative guidance on accounting for subsidies provided by the Act is issued.

  2. A plan sponsor that elects deferral under the FSP would not be permitted to continue that deferral if it amends its plan.

  3. A plan sponsor that does not elect deferral and instead accounts for the effects of the Act on its plan in the period that the Act was enacted would be required to make certain additional disclosures about the manner in which it accounted for the effects of the Act. In addition, if a plan sponsor determines that some or all of the federal subsidy related to a plan’s accumulated postretirement benefit obligation should be recognized immediately in income, any such amount should be reported in a separate line item on the face of the income statement.

Final FSP FAS 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, was posted to the FASB website on January 12, 2004.

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through February. Because schedules may change, please check the FASB calendar before finalizing your plans. Revisions to this list since the last issue of Action Alert are highlighted in bold.

Tuesday, January 27, 2004—Liaison Meeting with representatives of cooperative and mutual entities
Wednesday, January 28, 2004—FASB Board Meeting
Wednesday, January 28, 2004—FASB Education Session
Thursday, January 29, 2004—FASB Education Session (if needed)
Friday, January 30, 2004—Liaison Meeting with the American Bar Association
Wednesday, February 4, 2004—FASB Board Meeting
Wednesday, February 4, 2004—FASB Education Session
Wednesday, February 11, 2004—FASB Board Meeting
Wednesday, February 11, 2004—FASB Education Session
Wednesday, February 18, 2004—FASB Board Meeting
Wednesday, February 18, 2004—FASB Education Session
Wednesday, February 25, 2004—FASB Board Meeting
Wednesday, February 25, 2004—FASB Education Session