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Action Alert No. 05-31
August 4, 2005
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
No Board meetings are planned for the week of August 8,
2005.
OPEN EDUCATION SESSION
Thursday, August 11, 2005, 10:00 a.m.
The Board will hold an educational, non-decision-making session to
discuss topics that are anticipated to be discussed at the August 17, 2005
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.
July 27, 2005 Board Meeting
Conceptual
framework. The Board continued its deliberations on the joint
IASB/FASB conceptual framework project. The Board discussed issues
relating to (1) the meanings of stewardship and accountability and their
relationship to objectives of financial reporting, (2) relationships
between qualitative characteristics of financial reporting information and
how they are used in building decision-useful financial reports, and (3)
the definitions of understandability and materiality.
The Board reached the following conclusions:
- Stewardship and accountability. The Board agreed that
stewardship or accountability should not be a separate objective of
financial reporting by business entities in the converged framework. The
Board agreed that the converged framework should clearly describe its
meaning of stewardship, which encompasses management’s responsibility
not only for the custody and safekeeping of assets entrusted to it but
also for their efficient and profitable use. As a consequence, the Board
agreed that the converged framework should clarify that financial
information useful for making investment, credit, and similar resource
allocation decisions—the primary objective—would include financial
information useful for assessing management’s stewardship.
- Relationships between qualitative characteristics of financial
reporting. The Board agreed that the staff should further develop a
description of how qualitative characteristics of financial reporting
information are used to build decision-useful financial reports. The
Board observed that the different qualitative characteristics, which
include relevance, faithful representation, comparability,
understandability, and their subqualities, sometimes suggest different
answers to standard-setting and financial reporting issues. Previously,
the Board’s discussion of such differences had focused on hierarchy
(that is, which characteristics prevail over others because they are
ranked higher) or bargaining (that is, how much of one quality we are
willing to "trade off" to get more of another quality). The Board agreed
that it would be better to view consideration of the qualitative
characteristics of financial reporting information as steps in a
process that results in decision-useful financial reporting. The
Board suggested several improvements to the description and illustration
of the process proposed by the staff.
- Understandability and materiality: Board members provided
suggestions for improvement to the definition of understandability.
FASB DOCUMENT AVAILABLE
Proposed
FSP AAG INV-a, "Reporting of Fully Benefit-Responsive Investment
Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide," was issued on August 4, 2005, and is available
on the FASB website. Comments are expected by September 19, 2005.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
September. 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.
Wednesday, August 17, 2005—FASB Board Meeting
Wednesday, August 17,
2005—FASB Education Session
Wednesday, August 24, 2005—FASB Board
Meeting
Wednesday, August 24, 2005—FASB Education Session
Wednesday,
August 31, 2005—FASB Board Meeting
Wednesday, August 31, 2005—FASB
Education Session
Wednesday, September 7, 2005—FASB Board
Meeting
Wednesday, September 7, 2005—FASB Education Session
Friday,
September 9, 2005—Liaison Meeting with the CFA Institute
Wednesday,
September 14, 2005—FASB Board Meeting
Wednesday, September 14,
2005—FASB Education Session
Wednesday, September 14, 2005—FASB Emerging
Issues Task Force Meeting
Thursday, September 15, 2005—FASB Emerging
Issues Task Force Meeting
Monday, September 19, 2005—Liaison Meeting
with the AICPA PCPS Technical Issues Committee
Wednesday, September 21,
2005—FASB Board Meeting
Wednesday, September 21, 2005—No FASB
Education Session Scheduled
Thursday, September 22, 2005—Financial
Accounting Standards Advisory Council Meeting
Friday, September 23,
2005—Liaison Meeting with the Institute of Management
Accountants
Wednesday, September 28, 2005—FASB Board
Meeting
Wednesday, September 28, 2005—FASB Education
Session
Thursday, September 29, 2005—User Advisory Council
Meeting
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