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Action Alert No. 07-27
July 5, 2007
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
Wednesday, July 11, 2007, 9:00 a.m.
- Conceptual
framework. The Board will discuss matters relating to the
following three phases of the project:
- Elements and recognition (estimated 45-minute
discussion). The Board will discuss next steps for this phase in
light of the results of consultations on the working definition of an
asset with the FASB’s Financial Accounting Standards Advisory Council,
IASB’s Standards Advisory Council, national standards setters, and
other technical experts. The discussion is administrative; decisions
on technical issues are not expected.
- Measurement (estimated 75-minute discussion). The
Board will discuss the concept of measurement, including a definition
of measurement. The Board also will discuss measurement principles and
terms related to measurement.
- Reporting entity (estimated 15-minute discussion).
The Board will discuss the length of the comment period for the
forthcoming Preliminary Views on the concept of a reporting entity.
- Useful
life and amortization of intangible assets (estimated
45-minute discussion). The Board will discuss alternatives for
determining the useful life of intangible assets, specifically renewable
intangible assets, and whether guidance should be provided on the
subsequent amortization of intangible assets, both nonrenewable and
renewable.
- 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, July 11, 2007, following the Board meeting
The Board will hold an educational, non-decision-making session to
discuss topics that are anticipated to be discussed at a future 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, FSP, or
Statement 133 Implementation Issue.
June 27, 2007 Board Meeting
Conceptual
framework: objectives and qualitative characteristics. The Board
redeliberated issues related to the FASB Preliminary Views, Conceptual
Framework for Financial Reporting: Objective of Financial Reporting and
Qualitative Characteristics of Decision-Useful Financial Reporting
Information.
With regard to the proposed chapter on the objective of financial
reporting, the Board made the following decisions:
- The Board affirmed its earlier decision that the objective in the
proposed Framework should pertain to financial reporting as a whole, not
just financial statements.
- The Board decided that the proposed Framework should generally
describe what is meant by financial reporting but that specific
decisions on the scope of financial reporting should be dealt with in
the phase on presentation and disclosure, including financial reporting
boundaries (Phase E) of the conceptual framework project.
- The Board affirmed its decision to adopt the entity perspective as
proposed in the Preliminary Views. The Board agreed that adopting the
entity perspective is intended to convey that an entity, not its owners
and others having an interest in it, is the object of general purpose
external financial reporting. The Board noted that it did not intend to
prejudge the potential applicability of the proprietary theory or the
entity theory of the reporting entity. That issue will be decided in the
reporting entity phase (Phase D) of the project.
- The Board affirmed its earlier decision to distinguish a primary
user group in the proposed Statement. The Board decided that the primary
user group should include both current and potential investors and
creditors (capital providers).
- The Board also affirmed its earlier decision that government and
regulatory bodies are potential users of financial reporting.
Liabilities and
equity. The Board modified the classification principle under the
ownership approach. The Board decided that only instruments that meet the
definition of a direct ownership instrument should be classified as
equity. All perpetual instruments that do not meet the definition of a
direct ownership instrument should be classified as liabilities.
Accounting for
leases. The Board discussed a staff analysis of alternative
approaches for the initial and subsequent measurement of a lessee’s
liability for its obligation to make payments to the lessor arising under
a simple lease contract. The Board directed the staff to further explore
the following approaches:
- The lessee would initially measure its obligation to pay for the
right to use asset at fair value.
- The lessee would subsequently measure that liability using the
effective interest method; however, the lessee also would have an option
to subsequently measure the liability at fair value.
The Board discussed a staff analysis of alternative approaches for the
initial and subsequent measurement of a lessee’s right to use asset
arising under a simple lease contract. The Board generally agreed with the
staff’s view that a lessee’s right to use asset is neither an intangible
asset nor an asset that is similar in nature to the leased item. For that
reason, the existing guidance for the initial measurement of an intangible
or tangible asset may not be the most relevant measure of a lessee’s right
to use asset. The Board directed the staff to develop an approach for the
initial and subsequent measurement of a lessee’s right to use asset for
consideration at a future meeting.
The Board also discussed whether assets and liabilities arising in a
lease contract should be recognized upon signing of the lease contract or
upon access to or delivery of the leased item but did not reach any
tentative conclusions.
FASB ratification
of EITF consensuses and tentative conclusions. The Board
considered and ratified consensuses reached at the June 14, 2007 EITF
meeting on Issues No. 06-11, "Accounting for Income Tax Benefits of
Dividends on Share-Based Payment Awards," and No. 07-3, "Accounting for
Nonrefundable Advance Payments for Goods or Services Received for Use in
Future Research and Development Activities."
The Board did not consider for ratification the tentative conclusion
reached at the June 14, 2007 EITF meeting on Issue No. 07-1, "Accounting
for Collaborative Arrangements." That tentative conclusion is expected to
be considered at a future Board meeting. If that tentative conclusion is
ratified, the Board will decide on the length of the comment period.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
August. 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, July 18, 2007—FASB Board Meeting
Wednesday, July 18,
2007—FASB Education Session
Wednesday, July 25, 2007—FASB Board
Meeting
Wednesday, July 25, 2007—FASB Education Session
Wednesday,
August 1, 2007—FASB Board Meeting
Wednesday, August 1, 2007—FASB
Education Session
Wednesday, August 8, 2007—FASB Board
Meeting
Wednesday, August 8, 2007—FASB Education Session
Wednesday,
August 15, 2007—FASB Board Meeting
Wednesday, August 15, 2007—FASB
Education Session
Wednesday, August 22, 2007—FASB Board
Meeting
Wednesday, August 22, 2007—FASB Education Session
Wednesday,
August 29, 2007—FASB Board Meeting
Wednesday, August 29, 2007—FASB
Education Session
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