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Action Alert No. 05-07
February 17, 2005
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
Wednesday, February 23, 2005, 9:00 a.m.
- Conceptual
Framework. The Board will discuss the proposed plan for updating
and completing the FASB's Conceptual Framework and converging it with
the IASB's Framework. (Estimated 60-minute discussion.)
- FASB Staff Position (FSP): accounting for waste electrical and
electronic equipment. The Board will consider whether to direct the
staff to post to the FASB website for comment a proposed FSP on
accounting for waste electrical and electronic equipment obligations.
That proposed FSP addresses accounting issues relating to the European
Union's (EU) Directive 2002/96/EC on Waste Electrical and Electronic
Equipment. The Directive was enacted on February 13, 2003, and directs
EU-member countries to adopt legislation to regulate the collection,
treatment, recovery, and environmentally sound disposal of waste
equipment. (Estimated 60-minute discussion.)
- 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, February 23, 2005, 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 March 2, 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.
February 9, 2005 Board Meeting
FASB Staff Positions (FSPs). The Board discussed the following
proposed and potential FSPs:
FSP
EITF 85-24-a. The Board discussed issues related to proposed FSP
EITF 85-24-a, "Application of EITF Issue No. 85-24, 'Distribution Fees by
Distributors of Mutual Funds That Do Not Have a Front-End Sales Charge,'
When Cash for the Right to Future Distribution Fees for Shares Previously
Sold Is Received from Third Parties," and made the following
decisions:
- The final FSP should be clarified to indicate that indemnities
requiring maintenance of the nature of the Rights as they existed at the
time of transfer would preclude revenue recognition. Likewise,
indemnities restricting changes to service providers and fund objectives
would preclude revenue recognition.
- Certain other requests for clarification in comment letters received
on the proposed FSP should be made in the final FSP.
- The transition provisions of the proposed FSP should be revised such
that the FSP will be applicable in the first fiscal quarter after
posting of the final FSP to the FASB website based on terms in existence
in transaction documents as of June 30, 2005.
The Board directed the staff to post the final FSP to the FASB
website.
Financial instruments: stable value investment funds. The Board
provided direction for the staff in drafting a proposed FSP to address
issues related to the accounting for certain fully benefit-responsive
investment contracts held by certain investment companies. The Board
reconfirmed that fair value is the appropriate amount at which to measure
all investments and derivatives of an investment company. However, the
Board was supportive of contract value accounting being appropriate for
fully benefit-responsive investment contracts held by certain entities in
limited circumstances coupled with enhanced disclosure of the investment
contracts. The Board asked the staff to prepare a draft of the proposed
FSP for discussion at a future Board meeting that includes the
following:
- The criteria and limited circumstances under which contract value
accounting treatment would be appropriate
- A description of the enhanced quantitative and qualitative
disclosures required if contract value is used.
The Board recommended that the staff utilize guidance in AICPA
Statement of Position 94-4, Reporting of Investment Contracts Held by
Health and Welfare Plans and Defined-Contribution Pension Plans, in
drafting the proposed FSP.
Accounting
for the loss of significant influence in an investee. The Board
directed the staff to post a proposed FSP to the FASB website on
accounting by an investor for other comprehensive income of an investee
accounted for under the equity method upon a loss of significant
influence. The Board decided that the proposed FSP should be applied
prospectively (without requiring the recording of an adjustment for the
cumulative effect of a change in accounting principle) regardless of the
method that has been applied historically. The Board directed the staff to
post the proposed FSP to the FASB website for a comment period of 60 days.
The Board approved an effective date of the first reporting period
beginning after the final FSP is posted to the FASB website.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
March. 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.
Wednesday, March 2, 2005—FASB Board Meeting
Wednesday, March 2,
2005—FASB Education Session
Tuesday, March 8, 2005—User Advisory
Council Meeting, New York City
Wednesday, March 9, 2005—FASB Board
Meeting
Wednesday, March 9, 2005—FASB Education Session
Wednesday,
March 16, 2005—FASB Board Meeting
Wednesday, March 16, 2005—FASB
Education Session
Thursday, March 17, 2005—Emerging Issues Task Force
Meeting
Tuesday, March 22, 2005—Financial Accounting Standards Advisory
Council
Wednesday, March 23, 2005—FASB Board Meeting
Wednesday,
March 23, 2005—FASB Education Session
Wednesday, March 30, 2005—FASB
Board Meeting
Wednesday, March 30, 2005—FASB Education Session
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