Action Alert No. 04-43
November 4, 2004

NOTICE OF MEETINGS

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

Wednesday, November 10, 2004, 9:00 a.m.

  1. Fair value measurement. The Board will begin redeliberations of its Exposure Draft, Fair Value Measurements. The Board will consider issues relating to issuance of a final Statement and its interaction with FASB Concepts Statement No. 7, Using Cash Flow Information and Present Value in Accounting Measurements. The Board also will consider issues relating to the fair value definition and the application of the definition to liabilities. (Estimated 2-hour discussion.)

  2. FASB Staff Positions (FSPs). The Board will consider the need for two proposed FSPs related to the application of FASB Statement No. 109, Accounting for Income Taxes, for:

    1. The tax benefits provided to U.S.-based manufacturers from the American Jobs Creation Act of 2004 (the Act). (Estimated 15-minute discussion.)

    2. The one-time tax benefit on the repatriation of foreign earnings provided for in the Act. (Estimated 15-minute discussion.)

  3. Agenda decisions. The Board will discuss whether to add the following limited-scope projects to its agenda:

    1. A project to provide guidance on how subparagraph 11(d) of FASB Statement No. 142, Goodwill and Other Intangible Assets, should be evaluated in determining the useful life of renewable intangible assets. (Estimated 30-minute discussion.)

    2. A project to amend the guidance for suspended well costs in FASB Statement No. 19, Financial Accounting and Reporting by Oil and Gas Producing Companies. (Estimated 15-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, November 10, 2004, if necessary, immediately following the Board meeting

The Board may hold an educational, non-decision-making session to discuss topics that are anticipated to be discussed at the November 17, 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 roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue a final Statement or Interpretation.

October 27, 2004 Board Meeting

Beneficial interests. The Board decided that the fair value election should be applied to any hybrid instrument with embedded derivative features that would otherwise be required to be separated from the host contract and accounted for separately under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, rather than only to beneficial interests in securitized financial assets with embedded features that would otherwise require separate accounting as derivatives.

Qualifying special-purpose entities and isolation of transferred assets. The Board's discussion focused on whether to strengthen the implementation guidance on isolation. The Board discussed whether to require certain conditions that an attorney would be expected to require to render a true sale at law opinion, instead of including those conditions as examples. In particular, the Board discussed the condition that the transferred financial asset be adequately segregated from the transferor and placed, at a minimum, in a custodial arrangement.

The Board also discussed whether to include in the amendment to FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, as an effective control issue or simply as a standalone exception, the decision to require that any benefit that a transferor receives from setoff related to transferred assets must be shared with other interest holders. The Board made no decisions.

FSP Staff Position (FSP). The Board discussed proposed FSP FAS 140-b, "Application of EITF Issue No. 85-24, 'Distribution Fees by Distributors of Mutual Funds That Do Not Have a Front-End Sales Charge,' When Future Distribution Fees Are Sold to Unrelated Third Parties," and made the following decisions:

  1. The scope of that proposed FSP should be expanded to address situations in which the application of Issue No. 85-24 could result in revenue recognition upon sale of the right to future 12b-1 fees.

  2. Continuing involvement should be evaluated as it relates to the control group to which the distributor belongs and as it relates to retention of risks and rewards in the 12b-1 fees.

  3. Recourse obligations should be recognized consistent with existing guidance.

The Board directed the staff to redraft proposed FSP FAS 140-b and to present it to the Board for consideration by the end of November.

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through December. All meetings are held in Norwalk, Connecticut, unless otherwise noted. 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, November 16, 2004—FASB Education Session
Wednesday, November 17, 2004—FASB Board Meeting
Wednesday, November 17, 2004—Emerging Issues Task Force Meeting
Thursday, November 18, 2004—Emerging Issues Task Force Meeting
Wednesday, November 24, 2004—FASB Board Meeting
Wednesday, November 24, 2004—FASB Education Session
Tuesday, November 30, 2004—FASB Board Meeting
Tuesday, November 30, 2004—FASB Education Session
Wednesday, December 1, 2004—Small Business Advisory Committee Meeting
Thursday, December 2, 2004—Financial Accounting Standards Advisory Council Meeting
Wednesday, December 8, 2004—FASB Board Meeting
Wednesday, December 8, 2004—FASB Education Session
Friday, December 10, 2004—Liaison Meeting with the National Investor Relations Institute
Wednesday, December 15, 2004—FASB Board Meeting
Wednesday, December 15, 2004—FASB Education Session
Wednesday, December 22, 2004—FASB Board Meeting
Wednesday, December 22, 2004—FASB Education Session