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Action Alert No. 06-41
October 12, 2006
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
Wednesday, October 18, 2006, 8:00 a.m.
The Board meeting will begin at 8:00 a.m. instead of 9:00
a.m.
- Business
combinations: applying the acquisition method (estimated
90-minute discussion). As part of it’s redeliberations of the June
2005 Exposure Draft, Business Combinations, the Board will
discuss:
- Accounting for specific types of intangible assets acquired as
part of a business combination, such as:
- Assembled workforce
- Reacquired rights (EITF Issue No. 04-1, "Accounting for
Preexisting Relationships between the Parties to a Business
Combination")
- In-process research and development
- Accounting for preexisting relationships (Issue 04-1)
- Whether an acquirer should recognize measurement period
adjustments retrospectively or prospectively.
- Derivative
disclosures (estimated 45-minute discussion). The Board
will discuss whether gains and losses on hedged items should be included
in tables summarizing an entity’s use of derivatives. The Board also
will discuss whether those tables should include gains and losses on all
derivatives and related hedged items that existed throughout the
reporting period, at the end of the reporting period, or both.
- Conceptual
framework (estimated 45-minute discussion). The Board
will continue its discussions of the elements phase (Phase B) by
focusing on the meaning, significance, and use of the term
element, including implications for remaining milestones of this
phase of the project.
- Transfers
of financial assets (estimated 1-hour discussion). The
Board will discuss alternatives for amending the isolation guidance of
FASB Statement No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities.
- Fair value
option (estimated 90-minute discussion). The Board will
continue its redeliberations of the proposed guidance in the FASB
Exposure Draft, The Fair Value Option for Financial Assets and
Financial Liabilities, and discuss numerous issues raised by
respondents to the Exposure Draft, including effective date and
transition.
- 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 SESSIONS
Tuesday, October 17, 2006, 8:00 a.m.
Wednesday, October 18, 2006,
following the Board meeting
The Board will hold educational, non-decision-making sessions to
discuss topics that are anticipated to be discussed at the October 23 and
October 24, 2006 joint FASB/IASB Board meetings and other future Board
meetings. Those topics will be posted to the FASB calendar four
days prior to the education sessions.
OPEN MEETING WITH REPRESENTATIVES OF THE CFA INSTITUTE
Tuesday, October 17, 2006, 1:00 p.m.
The Board will meet with representatives of the Corporate Disclosure
Policy Committee of the CFA Institute to discuss matters of mutual
interest.
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.
October 4, 2006 Board Meeting
Conceptual
framework. The Board discussed the summary of the comment letters
received on the Discussion Paper, Measurement Bases for Financial
Accounting—Measurement on Initial Recognition, prepared by staff of
the Canadian Accounting Standards Board and published by the IASB in
November 2005. No decisions were made.
Statement
133 implementation issue—cash flow hedges of variable-rate assets and
liabilities. The Board decided to issue a proposed Statement 133
Implementation Issue on cash flow hedges: hedging interest cash flows on
variable-rate assets and liabilities that are not based on a benchmark
interest rate, for public comment.
The proposed Implementation Issue states that the risk being hedged
cannot be designated as interest rate risk (that is, the risk of
changes in cash flows attributable to changes in the designated benchmark
interest rate) unless the cash flows of the hedged transaction are
explicitly based on that same benchmark interest rate.
Additionally, the proposed Implementation Issue concludes that a
variable-rate financial asset or liability that is reset through an
auction process is not based on a benchmark interest rate and that
Statement 133 Implementation Issue No. G19, "Cash Flow Hedges: Hedging
Interest Rate Risk for the Forecasted Issuances of Fixed-Rate Debt Arising
from a Rollover Strategy," is not appropriate for variable-rate
instruments.
The Board directed the staff to proceed to a draft of a proposed
Statement 133 Implementation Issue for vote by written ballot.
Revision
of the definition of a public entity in a conduit borrowing
arrangement. The Board approved for issuance a final FSP on the
applicability of certain disclosures and interim reporting requirements
for obligors for conduit debt securities. That final FSP will require that
conduit bond obligors for conduit debt securities that are traded in a
public market be considered public entities for the purposes of the
standards listed in the FSP. The Board directed the staff to proceed to a
draft of a final FSP for vote by written ballot.
Amendment
of FAS 123(R)—technical corrections. The Board approved for
issuance a final FSP on the technical corrections of FASB Statement No.
123(R), Share-Based Payment. That final FSP will amend (a) the
disclosure requirements for a nonpublic entity, (b) illustrations 4(b) and
13(e) in Appendix A of Statement 123(R), and (c) the definition of a
short-term inducement in Appendix E of Statement 123(R). The Board
directed the staff to proceed to a draft of a final FSP for vote by
written ballot.
Pensions disclosure. The Board considered an agenda request to
provide additional disclosure guidance on the funding requirements of
defined benefit plans. The Board decided not to issue additional
disclosure requirements and did not add the project to its agenda.
FASB DOCUMENTS AVAILABLE
The following documents are available on the FASB website:
- Final
FSP FAS 123(R)-5, "Amendment of FASB Staff Position FAS
123(R)-1" (October 10, 2006).
- FASB
Exposure Draft, Not-for-Profit Organizations: Mergers and
Acquisitions (October 9, 2006). Comments are requested by January
29, 2007.
- FASB
Exposure Draft, Not-for-Profit Organizations: Goodwill and
Other Intangible Assets Acquired in a Merger or Acquisition (October
9, 2006). Comments are requested by January 29, 2007.
- Proposed
Statement 133 Implementation Issue No. G26, "Cash Flow Hedges:
Hedging Interest Cash Flows on Variable-Rate Assets and Liabilities That
Are Not Based on a Benchmark Interest Rate" (October 10, 2006). Comments
are requested by November 14, 2006.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
November. 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.
Monday, October 23, 2006—FASB/IASB Joint Board Meeting, Norwalk,
CT
Tuesday, October 24, 2006—FASB/IASB Joint Board Meeting, Norwalk,
CT
Wednesday, October 25, 2006—FASB Board Meeting
Wednesday,
November 1, 2006—FASB Board Meeting
Wednesday, November 1, 2006—FASB
Education Session
Tuesday, November 7, 2006—Liaison Meeting with
National Investors Relations Institute
Wednesday, November 8, 2006—FASB
Board Meeting
Wednesday, November 8, 2006—FASB Education
Session
Wednesday, November 15, 2006—FASB Board Meeting
Wednesday,
November 15, 2006—FASB Education Session
Wednesday, November 15,
2006—p.m., Emerging Issues Task Force Meeting
(Cancelled)
Thursday, November 16, 2006—Emerging Issues Task
Force Meeting
Tuesday, November 21, 2006—FASB Board Meeting
Tuesday,
November 21, 2006—FASB Education Session
Wednesday, November 29,
2006—FASB Board Meeting
Wednesday, November 29, 2006—FASB Education
Session
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