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Action Alert No. 06-29
July 20, 2006
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
Wednesday, July 26, 2006, 8:00 a.m.
The Board meeting will begin at 8:00 a.m. instead of 9:00
a.m.
- Transfers
of financial assets (estimated 60-minute discussion). The
Board will continue to discuss the accounting for transfers of financial
assets under FASB Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities.
The Board will focus on three open issues related to rollovers of
beneficial interests, participating interests, and transferability
requirements. In addition, the Board will discuss whether it should
address all of the issues related to the permitted activities of a
qualifying special-purpose entity together, including the issues on
servicer discretion.
- Postretirement
benefit obligations, including pensions (estimated 75-minute
discussion). The Board will continue redeliberations of its March
31, 2006 Exposure Draft, Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans. Specifically, the Board will
discuss (a) whether to require measurement of plan assets and benefit
obligations as of the date of the sponsor’s financial statements and (b)
the effective date of a final Statement.
- Measurement of nonfinancial assets and nonfinancial liabilities
in business combinations and impairment evaluations (estimated
60-minute discussion). The Board will discuss practice issues that
have arisen with respect to the use of entity-specific assumptions,
rather than market-participant assumptions, to measure certain
nonfinancial assets and nonfinancial liabilities in business
combinations and impairment tests. The Board will address considerations
relating to the issuance of a proposed FSP that would permit the use of
entity-specific assumptions in certain measurements of nonfinancial
assets and nonfinancial liabilities that would otherwise be required to
be measured at fair value.
- Conceptual
framework: elements and recognition (estimated 75-minute
discussion). The Board will consider whether a revised working
definition of an asset and amplifying text, together with further
examples illustrating their application, provide an adequate basis for
moving forward with other aspects of this phase of the conceptual
framework project.
- Revenue
recognition (estimated 90-minute discussion). The Board
will continue to discuss an approach under which an entity would
recognize revenue when it obtains an unconditional right to
consideration for performance to date. In particular, the Board will
discuss how that approach would be applied to certain revenue contracts.
- Amendments to
Statement 123(R): technical corrections (estimated 15-minute
discussion). The Board will discuss whether to approve the issuance
of a proposed FSP to address certain technical corrections of FASB
Statement No. 123 (revised 2004), Share-Based Payment. The
proposed FSP intends to amend (a) paragraph A240(d)(1) to exempt
nonpublic entities from disclosing the aggregate intrinsic value of
outstanding fully vested share options (or share units) and share
options expected to vest, (b) paragraph A102 of Illustration 4(b) to
revise the computation of the minimum compensation cost that must be
recognized in the illustration to comply with paragraph 42 of the
Statement, and (c) paragraph A170 of Illustration 13(e) to indicate that
at the date that the illustrative awards were no longer probable of
vesting, any previously recognized compensation cost should be reversed.
- 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
Thursday, July 27, 2006, 9:00 a.m.
The Board will hold an educational, non-decision-making session to
discuss topics that are anticipated to be discussed at the August 2, 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.
July 12, 2006 Board Meeting
Postretirement
benefit obligations, including pensions. The Board began
redeliberations of its March 2006 Exposure Draft, Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans, in light
of views communicated in respondents’ comment letters and the feedback
received at the June 27, 2006, public roundtable. (A summary of
the comment letter responses is now available.) The Board
discussed the scope and objectives of the project and considered several
implementation issues related to retrospective application of the proposed
changes. The Board made the following decisions:
- The Board affirmed its decision to conduct the project in phases,
enabling meaningful, near-term improvements in the financial reporting
of pensions and other postretirement benefits, which will make balance
sheets more complete, transparent, and understandable.
- The Board affirmed its decision to require an employer that is a
business entity to:
- Recognize in its statement of financial position the overfunded or
underfunded status of a defined benefit postretirement plan measured
as the difference between the fair value of plan assets and the
benefit obligation. For a pension plan, the benefit obligation would
be the projected benefit obligation; for any other postretirement
benefit plan, such as a retiree health care plan, the benefit
obligation would be the accumulated postretirement benefit obligation.
- Recognize as a component of other comprehensive income, net of
tax, the actuarial gains and losses and the prior service costs and
credits that arise during the period but pursuant to FASB Statements
No. 87, Employers’ Accounting for Pensions, and No. 106,
Employers’ Accounting for Postretirement Benefits Other Than
Pensions, are not recognized as components of net periodic benefit
cost. Amounts recognized in accumulated other comprehensive income
would be adjusted as they are subsequently recognized as components of
net periodic benefit cost pursuant to the recognition and amortization
provisions of Statements 87 and 106.
- The Board decided that any transition asset or transition obligation
remaining from the initial application of Statement 87 or 106 would be
recognized as a component of other comprehensive income, net of tax,
rather than as an adjustment to the opening balance of retained earnings
(as was proposed in the Exposure Draft). Amounts recognized in
accumulated other comprehensive income would be adjusted as they are
subsequently recognized as components of net periodic benefit cost
pursuant to the recognition and amortization provisions of Statements 87
and 106.
- The Board decided not to require retrospective application of the
accounting change for all financial statements presented, deciding
instead to require recognition of the funded status in the statement of
financial position as of the effective date of the final Statement. The
Board directed the staff to discuss with users and preparers of
financial statements the benefits and costs of providing, in notes to
the financial statements, the pro forma effect of the changes on the
financial position of the entity as of the immediately preceding fiscal
year-end. The Board will decide whether to require such a disclosure at
a future meeting.
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 2, 2006—FASB Board Meeting
Wednesday, August 2,
2006—FASB Education Session
Wednesday, August 9, 2006—FASB Board
Meeting
Wednesday, August 9, 2006—FASB Education Session
Wednesday,
August 16, 2006—FASB Board Meeting
Wednesday, August 16, 2006—FASB
Education Session
Wednesday, August 23, 2006—FASB Board
Meeting
Wednesday, August 23, 2006—FASB Education Session
Monday,
August 28, 2006—Liaison Meeting with Edison Electric Institute and
American Gas Association
Wednesday, August 30, 2006—FASB Board
Meeting
Wednesday, August 30, 2006—FASB Education
Session
Wednesday, September 6, 2006—FASB Board
Meeting
Wednesday, September 6, 2006—FASB Education
Session
Wednesday, September 6, 2006—p.m., Emerging Issues Task Force
Meeting
Thursday, September 7, 2006—Emerging Issues Task Force
Meeting
Tuesday, September 12, 2006—Liaison Meeting with the AICPA
Accounting Standards Executive Committee
Wednesday, September 13,
2006—FASB Board Meeting
Wednesday, September 13, 2006—FASB Education
Session
Tuesday, September 19, 2006—Liaison Meeting with Institute of
Management Accountants
Wednesday, September 20, 2006—FASB Board
Meeting
Wednesday, September 20, 2006—FASB Education
Session
Thursday, September 21, 2006—Financial Accounting Standards
Advisory Council Meeting
Wednesday, September 27, 2006—FASB Board
Meeting
Wednesday, September 27, 2006—FASB Education Session
Friday,
September 29, 2006—Liaison Meeting with the AICPA PCPS Technical Issues
Committee
†FASB Meetings Available by Audio Webcast and
Telephone
To monitor available live meetings free of charge by audio
webcast, access the link http://www.trz.cc/fasb/live.html. To monitor by
telephone, call 1-800-846-4717. You will be charged $.45 per minute, and
VISA, MasterCard, American Express, or Discover Card is required. To
listen to a recording of the most recent Board meeting via webcast free of
charge, access the link http://www.trz.cc/fasb/archive.html. To listen to a
recording by telephone, for a charge of $.45 per minute, call
1-800-462-0393. Questions can be directed to 1-800-846-4630.
Handouts
distributed to the audience at Board meetings are posted to our website
one-half hour before the start of the meeting. A synopsis of each
issue to be discussed at EITF meetings also is posted to this
website.
Education sessions are not available by audio webcast or
telephone, and no handouts are distributed to the audience.
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