Action Alert No. 04-11
March 18, 2004

NOTICE OF MEETINGS

OPEN BOARD MEETING
(Board meetings are available by audio webcast and telephone.)

Wednesday, March 24, 2004, 9:00 a.m.

1. Business combinations: purchase method procedures. The Board will discuss certain issues related to the accounting for insurance contracts in a business combination. (Estimated 60-minute discussion.)

2. Short-term convergence: liability classification. The Board will discuss whether to expand the scope of this project to include reconsideration of the definition of working capital and current assets. (Estimated 30-minute discussion.)

3. Financial performance reporting by business enterprises. [Revised 3/22/04—This topic has been rescheduled to the 3/31/04 Board meeting.] The Board will discuss a proposed plan for the project that was developed by a joint working group made up of staff from the International Accounting Standards Board, the UK Accounting Standards Board, and the FASB. (Estimated 60-minute discussion.)

4. Fair value measurement. The Board will discuss the remaining issues on bid-asked spread measurements that were identified in the drafting of the proposed Statement. (Estimated 30-minute discussion.)

5. Qualifying special-purpose entities and isolation of transferred assets. The Board will consider whether to hold a public roundtable to seek additional information about setoff rights and their effect on legal isolation for transfers of financial assets. (Estimated 60-minute discussion.)

6. 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

No education sessions will be held during the week of March 22, 2004.

FINANCIAL ACCOUNTING STANDARDS ADVISORY COUNCIL MEETING
(This meeting will be available by audio webcast and telephone.)

Tuesday, March 23, 2004, 9:00 a.m.

The Advisory Council will meet to discuss:

1. The current business and financial reporting environment

2. The FASB’s conceptual framework

3. The coordination of the Board’s technical agenda with the IASB

4. The Board’s project on short-term international convergence

5. The Board’s project to interpret FASB Statement No. 143, Accounting for Asset Retirement Obligations.

The Advisory Council will hear reports from the chairman of the FASB on other Board activities and the chief accountant of the SEC on current accounting-related developments. The Advisory Council also will hear a report from the chief auditor of the Public Company Accounting Oversight Board.

Closed to Public Observation

The Advisory Council will hold a closed session with the Board to discuss administrative matters. The closed session, which will be the last item on the agenda, is expected to begin at approximately 2:15 p.m.

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.

March 10, 2004 Board Meeting

Mortgage servicing rights at fair value. The Board met with representatives of PricewaterhouseCoopers and discussed issues facing the mortgage banking industry relative to the application of the current accounting model for mortgage servicing rights. The discussion included valuation of mortgage servicing rights, current use of fair value of mortgage servicing rights for both accounting and operational purposes, risk management and hedging issues, amortization and impairment methodologies, and comparability concerns with financial reporting under the current model. The meeting was informational and no Board decisions were reached.

Open discussion: proposed FSPs. A majority of the Board directed the staff to issue the following proposed FSPs for a 30-day comment period:

1. FSP FAS 106-b, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003"

2. FSP FIN 46(R)-a, "Technical Correction of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, Relating to Its Effects on Question No. 12 of EITF Issue No. 96-21, ‘Implementation Issues in Accounting for Leasing Transactions involving Special-Purpose Entities.’"

Those proposed FSPs were posted to the FASB website on Friday, March 12, and comments are requested by April 12, 2004.

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through April. 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.

Monday, March 29, 2004—FASB Education Session
Monday, March 29, 2004—Liaison Meeting with the American Bankers Association
Wednesday, March 31, 2004—FASB Board Meeting
Thursday, April 1, 2004—FASB Education Session
Wednesday, April 7, 2004—FASB Board Meeting
Wednesday, April 7, 2004—FASB Education Session
Monday, April 12, 2004—User Advisory Council Meeting, New York City
Tuesday, April 13, 2004—FASB Education Session
Wednesday, April 14, 2004—FASB Board Meeting
Wednesday, April 14, 2004—FASB Education Session
Thursday, April 22, 2004—IASB/FASB Joint Board Meeting, London
Friday, April 23, 2004—IASB/FASB Joint Board Meeting, London
Wednesday, April 28, 2004—FASB Board Meeting
Wednesday, April 28, 2004—FASB Education Session