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Action Alert No. 07-20
May 17, 2007
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
Wednesday, May 23, 2007, 9:00 a.m.
- Agenda decision: hybrid financial instruments
(estimated 45-minute discussion). The Board will discuss whether
to add a project to its agenda on determining the nature of a host
contract related to a hybrid financial instrument issued in the form of
a share under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities, and, if so, the objective,
scope, and timing of such a project.
- Agenda decision: Statement 133 hedging implementation
(estimated 60-minute discussion). The Board will discuss (a)
practice issues related to the hedge accounting guidance in Statement
133 and (b) whether to add a project to its agenda to address the
accounting for hedging activities. If the Board decides to add a project
to the agenda, it also will discuss potential approaches for accounting
for hedging activities.
- 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, May 23, 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.
May 8, 2007 Board Meeting
Financial
instruments: liabilities and equity. The Board discussed how an
entity applying the ownership-settlement approach would report the
issuance of a direct ownership instrument upon the exercise, conversion,
or settlement of an indirect ownership instrument. The Board decided the
entity would measure the direct ownership instrument issued at fair value
at the issuance date. The difference between the fair value of the direct
ownership instrument issued and the carrying value of the indirect
ownership instrument should be displayed in the statement of changes in
equity as a transfer between the indirect ownership instrument and the
direct ownership instrument issued.
The Board also discussed the three approaches (ownership,
ownership-settlement, or reassessed expected outcomes) to classifying
financial instruments with characteristics of liabilities and equities and
reached a preliminary view that entities should make those classification
decisions using the ownership approach.
Transfers
of financial assets. The Board discussed how to apply FASB
Statement No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, to transactions involving a
transfer of a financial asset and a repurchase financing of that asset
that involve the same parties to the initial transfer. The Board decided
to address the issue by providing guidance in the form of an FASB Staff
Position that would permit a transferee and transferor to evaluate the
accounting for the transactions separately under Statement 140 in certain
circumstances.
Conceptual
framework: reporting entity. The Board discussed outstanding
issues related to the reporting entity phase of the conceptual framework
project (Phase D). The Board decided the following:
- The composition of a group entity should be based on control.
Typically, a group would comprise a parent and other entities under its
control. In addition, there might be occasions when general purpose
external financial reports may be prepared for a group of entities under
common control, such as combined financial statements for two or more
entities under the control of a single investor.
- A parent entity may have only one set of general purpose financial
statements, which are its consolidated financial statements that present
information about all of the assets and liabilities and activities of
the parent and its subsidiaries. The Board acknowledged that, generally,
it is more useful to present information about the assets and
liabilities and activities of subsidiaries in a disaggregated form, but
there may be certain circumstances in which aggregated (one-line)
summary information is more decision useful. Those circumstances would
be addressed at the standards level.
The Board directed the staff to proceed with drafting a Preliminary
Views on the reporting entity concept that reflects the FASB's and IASB's
most recent decisions after the IASB discusses the remaining issues at its
meeting on May 16, 2007.
FASB DOCUMENT AVAILABLE
Final FSP
FIN 46(R)-7, "Application of FASB Interpretation No. 46(R) to
Investment Companies," was issued on May 11, 2007, and is available on the
FASB website.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
July. 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 30, 2007—FASB Board Meeting
Wednesday, May 30,
2007—FASB Education Session
Friday, June 8, 2007—Liaison Meeting with
Financial Executives International, Stamford, CT
Friday, June 8,
2007—FASB Education Session
Tuesday, June 12, 2007—Investors Technical
Advisory Committee Meeting
Wednesday, June 13, 2007—FASB Board
Meeting
Wednesday, June 13, 2007—FASB Education Session
Thursday,
June 14, 2007—Emerging Issues Task Force Meeting
Tuesday, June 19,
2007—Financial Accounting Standards Advisory Council Meeting
Wednesday,
June 20, 2007—Small Business Advisory Committee Meeting
Thursday, June
21, 2007—FASB Board Meeting
Thursday, June 21, 2007—FASB Education
Session
Wednesday, June 27, 2007—FASB Board Meeting
Wednesday, June
27, 2007—FASB Education Session
Thursday, July 5, 2007—FASB
Education Session
Wednesday, July 11, 2007—FASB Board
Meeting
Wednesday, July 11, 2007—FASB Education Session
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
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