The Board will hold an educational, non-decision-making session to
discuss topics that are anticipated to be discussed at future Board
meetings. Those topics will be posted to the FASB calendar four
days prior to the education session.
The Advisory Council will hear reports from the chairman of the FASB on
other Board activities and the deputy chief accountant of the SEC on
current accounting-related developments. The Advisory Council also will
hear a report from the chief auditor of the Public Company Accounting
Oversight Board.
Planned
major maintenance. The Board decided to add a project to its
agenda to eliminate the accrue-in-advance method of accounting for planned
major maintenance activities. The Board decided that the guidance would be
in the form of an FSP. Also, the Board decided to address transition
guidance at a future Board meeting and directed the staff to research the
practicability of retrospective application.
Variability
to consider when applying Interpretation 46(R). The Board
discussed the comment letters received on the proposed FSP FIN 46 (R)-c,
"Determining the Variability to Be Considered in Applying FASB
Interpretation No. 46(R)." Specifically, the Board discussed:
- Revisions to the proposed FSP to provide a clearer articulation of
the principle underlying the "by-design" approach to ensure its
consistent application
- Whether the final FSP should clarify from whose perspective the
analysis of the design of the entity should be performed
- Revisions to the proposed FSP to articulate a principle that would
assist in analyzing whether a derivative instrument should be considered
a variable interest or a creator of variability
- Whether the footnote disclosure relating to subordinated interests
(footnote 8) of the proposed FSP should be deleted
- Whether the final FSP should continue to require that the role
rather than the legal form or accounting classification should dictate
if the interest should be treated as creating risk for or absorbing risk
from the entity
- Modifications to the electricity forward example of the proposed FSP
to better assist in determining if a forward contract to purchase or
sell an asset is a variable interest and how synthetic long and short
positions should be analyzed in conjunction with their cash counterparts
- Whether the final FSP should provide additional industry-specific
examples
- The effective date of the final FSP.
The Board:
- Agreed with the revisions to the proposed FSP to provide a clearer
articulation of the principle underlying the "by-design" approach to
ensure its consistent application.
- Decided that the final FSP should not clarify from whose perspective
the analysis of the design of the entity should be performed.
- Agreed with the revisions to the proposed FSP to articulate a
principle that would assist in analyzing whether a derivative instrument
should be considered a variable interest or a creator of variability.
- Decided that the final FSP should not include the footnote
disclosure relating to subordinated interests (footnote 8).
- Decided that the final FSP should continue to require that the role
rather than the legal form or accounting classification should dictate
if the interest should be treated as creating risk for or absorbing risk
from the entity.
- Agreed with modifications to the electricity forward example of the
proposed FSP to better assist in determining if a forward contract to
purchase or sell an asset is a variable interest and how synthetic long
and short positions should be analyzed in conjunction with their cash
counterparts.
- Decided that the final FSP should not provide additional
industry-specific examples.
- Decided to delay the effective date for prospective application to
the first day of the first reporting period beginning after June 15,
2006. The Board also decided that retrospective application, if elected,
should be completed no later than the end of the annual reporting period
ending after July 15, 2006.
The Board directed the staff to proceed to a draft of a final FSP for
vote by written ballot.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
April. 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, March 28, 2006—FASB Board Meeting
Wednesday, March 29,
2006—FASB Education Session
Wednesday, April 5, 2006—FASB Board
Meeting
Wednesday, April 5, 2006—FASB Education Session
Tuesday,
April 11, 2006—User Advisory Council Meeting, New York City
Wednesday,
April 12, 2006—FASB Board Meeting
Wednesday, April 12, 2006—FASB
Education Session
Wednesday, April 19, 2006—FASB Board
Meeting
Wednesday, April 19, 2006—FASB Education Session
Thursday,
April 27, 2006—FASB/IASB Joint Board Meeting, London
Friday, April 28,
2006—FASB/IASB Joint Board Meeting, London