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Action Alert No. 06-19
May 11, 2006
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
No Board meetings are planned for the week of May 15, 2006. The next
scheduled Board meeting is Wednesday, May 24, 2006, and topics for that
Board meeting will be announced in next week's issue of Action
Alert.
OPEN EDUCATION SESSION
No education sessions are planned for the week of May 15, 2006. The
next scheduled education session is Wednesday, May 24, 2006, and will be
announced in next week's issue of Action Alert.
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.
May 3, 2006 Board Meeting
Fair
value measurements and Accounting
for unrealized gains (losses) relating to derivative instruments measured
at fair value under Statement 133. The Board discussed issues
raised by respondents to proposed FSP FAS 133-a, "Accounting for
Unrealized Gains (Losses) Relating to Derivative Instruments Measured at
Fair Value under Statement 133," relating to (1) the minimum reliability
threshold for fair value measurements at initial recognition of a
derivative under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities, and (2) the need for expanded
disclosures about fair value measurements in the final Statement on fair
value measurements.
The Board decided to eliminate the minimum reliability threshold in
proposed FSP FAS 133-a for fair value measurements at initial recognition
of a derivative under Statement 133. Instead, the Board decided that the
guidance in the final Statement should apply in all periods in which a
derivative is measured at fair value, whether at initial recognition or in
a subsequent period, eliminating the need to issue a separate final FSP.
Therefore, the final Statement will nullify the related guidance in
footnote 3 of EITF Issue No. 02-3, "Issues Involved in Accounting for
Derivative Contracts Held for Trading Purposes and Contracts Involved in
Energy Trading and Risk Management Activities."
The Board decided to require a limited retrospective transition
approach for the change in accounting under Issue 02-3. The Board further
reconsidered its earlier decision to require a full retrospective
transition approach for the change in accounting for blocks of financial
instruments held by broker-dealers and investment companies measured at
fair value using a blockage factor. The Board decided to require a limited
retrospective approach for that change in accounting.
The Board decided to require expanded disclosures about fair value
measurements in the final Statement. For each major category of assets and
liabilities remeasured at fair value on a recurring basis within Level 3
of the fair value hierarchy (including but not limited to derivatives),
the final Statement will require (1) a reconciliation of the beginning and
ending balances and (2) disclosure of the portion of total gains or losses
included in income for the period attributable to unrealized gains or
losses relating to those assets and liabilities still held at the
reporting date and a description of where those gains or losses are
reported in the statement of income or other statement of financial
performance, separately for total gains or losses and unrealized gains or
losses.
Planned
major maintenance activities. The Board decided that the
transition guidance in the proposed FSP on planned major maintenance
activities should not include the requirement that entities disclose the
impact on net income in the period of transition as if the guidance in the
proposed FSP had not been applied. Therefore, the proposed disclosure
requirements are:
- A description of the prior-period information that has been
retrospectively adjusted, if any
- The effect of the change on income from continuing operations, net
income (or other appropriate captions of changes in the applicable net
assets or performance indicator), any other affected financial statement
line item, and any affected per-share amounts for any prior periods
retrospectively adjusted
- The cumulative effect of the change on retained earnings or other
components of equity or net assets in the statement of financial
position as of the beginning of the earliest period presented
- If retrospective application to all prior periods is impracticable,
disclosure of the reasons therefor, and a description of the alternative
method used to report the change.
NOTICE OF AN OPEN ROUNDTABLE DISCUSSION WITH RESPONDENTS TO THE FASB
EXPOSURE DRAFT, THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND
FINANCIAL LIABILITIES
The Board will hold a roundtable discussion with respondents to its
January 25, 2006 Exposure Draft, The Fair Value Option for Financial
Assets and Financial Liabilities, on Monday morning, June 19, 2006, in
Norwalk, Connecticut. The Board invites individuals interested in
participating in the roundtable discussion to respond to director@fasb.org by Monday, May 22,
2006. Those wishing to participate should include their name, title,
affiliation, email address, and telephone number.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
June. 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, May 24, 2006—FASB Board Meeting
Wednesday, May 24,
2006—FASB Education Session
Thursday, May 25, 2006—Liaison Meeting with
American Accounting Association
Wednesday, May 31, 2006—FASB Board
Meeting
Wednesday, May 31, 2006—FASB Education Session
Wednesday,
June 7, 2006—FASB Board Meeting
Wednesday, June 7, 2006—FASB Education
Session
Wednesday, June 14, 2006—No FASB Board Meeting
Wednesday,
June 14, 2006—FASB Education Session
Wednesday, June 14, 2006—p.m.,
Emerging Issues Task Force Meeting (canceled)
Thursday, June 15,
2006—Emerging Issues Task Force Meeting
Monday, June 19, 2006—a.m.,
Fair Value Option Roundtable Meeting
Monday, June 19, 2006—p.m.,
Liaison Meeting with Financial Executives International, Stamford,
CT
Tuesday, June 20, 2006—FASB Board Meeting
Tuesday, June 20,
2006—FASB Education Session
Wednesday, June 21, 2006—Small Business
Advisory Council Meeting
Thursday, June 22, 2006—Financial Accounting
Standards Advisory Council Meeting
Tuesday, June 27,
2006—Postretirement Benefit Obligations including Pensions Roundtable
Meeting
Wednesday, June 28, 2006—FASB Board Meeting
Wednesday, June
28, 2006—FASB Education Session
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