Action Alert No. 06-06
February 9, 2006

NOTICE OF MEETINGS

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

Wednesday, February 15, 2006, 9:00 a.m.

  1. Hybrid financial instruments (estimated 15-minute discussion). The Board will reconsider the transition provisions for existing hybrid instruments that elect the fair value measurement attribute.

  2. Agenda decision: derivatives and hedging (estimated 1-hour discussion). The Board will discuss whether to add one or more projects to its agenda with respect to FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities.

  3. Leveraged leases (estimated 30-minute discussion). The Board will discuss the remaining issues on the proposed FSP FAS 13-a, "Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction."

  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, February 15, 2006, 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 February 22, 2006 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, Interpretation, or FSP.

February 1, 2006 Board Meeting

Entrance fee deposits and deferred revenue. The Board discussed whether to add to its agenda a project to address the current accounting for refundable entrance fees in the continuing care retirement community industry, specifically whether refundable entrance fees should be considered callable and subject to FASB Statement No. 78, Classification of Obligations That Are Callable by the Creditor, and classified as a current liability.

The Board decided not to add this project to its agenda highlighting its concern about the interaction of this issue with current Board initiatives such as its projects on revenue recognition and financial performance reporting by business entities. In addition, the Board noted that the resolution of this issue could create issues in other industries as a result of entities analogizing to the conclusions reached on this issue.

Statement 123(R)/Liability classification. The Board discussed comments received from respondents to the proposed FSP FAS 123(R)-d, "Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event." Specifically, the Board addressed whether (1) to restrict the guidance in the final FSP to specific contingent events (for example, change in control), (2) to retain the probability approach included in the proposed FSP, and (3) to include nonemployee awards within the scope of the final FSP.

The Board decided:

  1. Not to restrict the guidance in the final FSP to a specific set of contingent events

  2. To retain the probability approach in the final FSP

  3. Not to include nonemployee awards within the scope of the final FSP.

The Board directed the staff to proceed to a draft of a final FSP for vote by written ballot.

FASB DOCUMENT AVAILABLE

The following document was issued and is available on the FASB website:

Final FSP FAS 123(R)-4, "Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event" (February 3, 2006).

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through March. 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, February 22, 2006—FASB Board Meeting
Wednesday, February 22, 2006—FASB Education Session
Wednesday, March 1, 2006—FASB Board Meeting
Wednesday, March 1, 2006—FASB Education Session
Wednesday, March 8, 2006—FASB Board Meeting
Wednesday, March 8, 2006—FASB Education Session
Wednesday, March 15, 2006—FASB Board Meeting
Wednesday, March 15, 2006—p.m., Emerging Issues Task Force Meeting
Thursday, March 16, 2006—Emerging Issues Task Force Meeting
Friday, March 17, 2006—FASB Education Session
Wednesday, March 22, 2006—FASB Board Meeting
Wednesday, March 22, 2006—FASB Education Session
Thursday, March 23, 2006—Financial Accounting Standards Advisory Council Meeting
Wednesday, March 29, 2006—FASB Board Meeting
Wednesday, March 29, 2006—FASB Education Session