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Action Alert No. 08-42
October 16, 2008
NOTICE OF MEETINGS
OPEN JOINT FASB AND IASB BOARD MEETINGS
(Board
meetings are available by audio webcast and telephone.)
Monday, October 20, 2008, 10:30 a.m.
- Conceptual
framework: elements and recognition (estimated 90-minute
discussion). The Boards will consider how they might improve the
clarity of the proposed definition of an asset and of a liability,
making it more understandable to the Boards’ constituents.
- Consolidations (estimated 2-hour discussion). The
staff will present an overview of the main similarities and differences
between the proposed FASB Statement, Amendments to FASB
Interpretation No. 46(R), and the proposed new IFRS on
consolidation. The Boards will consider how to conduct the projects
jointly.
- Derecognition (estimated 90-minute discussion). The
staff will provide an overview of potential derecognition models. The
Boards will consider how this project can be conducted jointly.
- Fair value measurement (estimated 45-minute
discussion). The staff will provide an update on the IASB’s fair
value measurement project, noting any differences between the IASB’s
tentative decisions to date and FASB Statement No. 157, Fair Value
Measurements, and any potential opportunities to clarify the
guidance in Statement 157. The staff also will provide an update on the
IASB Expert Advisory Panel activities.
Tuesday, October 21, 2008, 9:00 a.m.
- Financial
instruments with characteristics of equity (estimated
90-minute discussion). The Boards will discuss which approach for
distinguishing equity instruments from other financial instruments to
use as a starting point for future deliberations.
- Financial instruments: complexity (estimated 1-hour
discussion). The staff will present a summary analysis of the
comment letters received on the Discussion
Paper, Reducing Complexity in Reporting Financial
Instruments, as well as on the FASB Exposure
Draft, Accounting for Hedging Activities.
- Emissions
trading schemes (estimated 1-hour discussion). The Boards
will begin considering the main accounting issues at inception of
emissions-related cap and trade and baseline and credit schemes. The
staff will present different views on how to address those issues. The
discussion is informational, and no Board decisions are expected.
- Liabilities (estimated 90-minute discussion). The
Boards will discuss the initial recognition of liabilities with
uncertainties (other than litigation), with a particular focus on the
use of threshold or probability weighted amounts. The staff also will
discuss IASB plans for and timing of IAS 37 redeliberations relating to
contingencies arising from litigation.
OPEN EDUCATION SESSION
Wednesday, October 22, 2008, 9:00 a.m.
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.
October 8, 2008 Board Meeting
Mergers and
acquisitions by a not-for-profit organization. The Board continued
its September 24, 2008 discussion on whether to retain or modify the
proposed requirements for (1) initial recognition and measurement of
acquisitions by not-for-profit organizations and (2) subsequent accounting
for any goodwill recognized as a result of the acquisition.
Initial recognition and measurement—The Board decided that when
a not-for-profit organization acquires an organization, business, or
nonprofit activity that is expected to be predominantly supported by
contributions and returns on investments and the amount for the
liabilities assumed (and any consideration paid) exceeds the assets
acquired, that excess amount should be recognized as a separate charge in
the statement of activities rather than as goodwill. In other
circumstances, that excess amount should be recognized as
goodwill.
The Board also decided that if the amount of the assets acquired
exceeds the liabilities assumed (and any consideration paid), the
provisions of the final Statement should not require a distinction as to
whether the transaction is a contribution received or bargain
purchase.
In addition, the Board affirmed its decision that a noncontrolling
interest in an acquiree should be measured at fair value on the date of
acquisition.
Subsequent accounting for goodwill—The Board decided that a
not-for-profit organization that recognizes acquired goodwill as an asset
should subsequently account for it following the guidance in FASB
Statement No. 142, Goodwill and Other Intangible Assets.
At a future meeting, the Board plans to discuss disclosures pertaining
to mergers and acquisitions, the transition guidance and effective date of
the final Statement, and other issues that may arise during drafting.
October 10, 2008 Board Meeting
Determining fair
value in a market that is not active. The Board discussed the
comments received on proposed FSP FAS 157-d, Determining the Fair Value
of a Financial Asset in a Market That Is Not Active, which would
clarify the application of FASB Statement No. 157, Fair Value
Measurements. The Board affirmed its decision to limit the scope of
the FSP to financial assets. The Board also affirmed that the final FSP
will be effective upon issuance. Prior periods for financial statements
that have not been issued would comply with the guidance in the final
FSP.
Based on the comments received, the Board also decided to make the
following clarifications to the FSP:
- Clarify that when distinguishing between an active market and an
inactive market, practitioners should (a) look to the market for a
particular asset or class of assets being measured rather than the
overall market and (b) consider the factors that characterize an
inactive market, such as a decline in the volume and level of activity,
prices that are not current, and prices that vary substantially
- Include a discussion about disorderly markets and the distinction
between distressed markets and distressed transactions
- Emphasize that significant judgment is needed when determining if a
particular transaction is an indicator of fair value
- Clarify that the use of contractual cash flows using the discount
rate adjustment valuation technique in the example would not change the
application of EITF Issue No. 99-20, "Recognition of Interest Income and
Impairment on Purchased Beneficial Interests That Continue to Be Held by
a Transferor in Securitized Financial Assets," when determining whether
a particular instrument is subject to other-than-temporary impairment.
The Board directed the staff to proceed with a draft of a final FSP for
vote by written ballot.
FASB DOCUMENTS AVAILABLE
The following documents are available on the FASB website:
Final FSP FAS
157-3, Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active (October 10, 2008).
Discussion
Paper, Preliminary Views on Financial Statement
Presentation (October 16, 2008). Comments are requested by April 14,
2009.
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
December. 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, October 29, 2008—FASB Board Meeting
Wednesday, October
29, 2008—FASB Education Session
Wednesday, November 5, 2008—FASB Board
Meeting
Wednesday, November 5, 2008—FASB Education Session
Tuesday,
November 11, 2008—Investors Technical Advisory Committee
Meeting
Wednesday, November 12, 2008—FASB Board Meeting
Thursday,
November 13, 2008—Emerging Issues Task Force Meeting
Wednesday,
November 19, 2008—FASB Board Meeting
Wednesday, November 19, 2008—FASB
Education Session
Tuesday, November 25, 2008—FASB Board
Meeting
Tuesday, November 25, 2008—FASB Education
Session
Wednesday, December 3, 2008—FASB Board Meeting
Wednesday,
December 3, 2008—FASB Education Session
Wednesday, December 10,
2008—FASB Board Meeting
Wednesday, December 10, 2008—FASB Education
Session
Friday, December 12, 2008—Small Business Advisory Committee
Meeting
Monday, December 15, 2008—Financial Accounting Standards
Advisory Council Meeting
Wednesday, December 17, 2008—FASB Board
Meeting
Wednesday, December 17, 2008—FASB Education Session
Tuesday,
December 23, 2008—FASB Board Meeting
Tuesday, December 23, 2008—FASB
Education Session
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