SUMMARY OF BOARD DECISIONS

Summary of Board decisions 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 an Accounting Standards Update.

December 2, 2009 Board Meeting

FASB ratification of EITF consensus and consensuses-for-exposure. The Board ratified the following consensus reached at the November 19, 2009 EITF meeting, which will be effective for interim and annual periods ending on or after December 15, 2009.
  1. Issue No. 09-E, “Accounting for Distributions to Shareholders with Components of Stock and Cash”

    In a distribution to shareholders that contains components of stock and cash and allows shareholders to select their preferred form of the distribution, an entity should account for the stock portion as a share issuance for purposes of applying the provisions of Topic 260, Earnings Per Share.

    The consensus does not require any incremental disclosures.

    An entity will apply the change retrospectively to prior periods.
The Board also ratified the following consensuses-for-exposure reached at the November 19 EITF meeting. The comment period for each of these consensuses-for-exposure is expected to begin between December 11, 2009 and December 16, 2009 and end no later than February 12, 2010.
  1. Issue No. 09-F, “Casino Base Jackpot Liabilities”

    An entity would be prohibited from accruing base jackpots as a liability if the entity can avoid payment, because the base jackpot does not meet the definition of a liability until it has been won.

    The consensus-for-exposure would be effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The consensus-for-exposure would require a cumulative-effect adjustment to the opening balance of the entity’s retained earnings as of the beginning of the fiscal year in which the guidance is initially applied.
     
  2. Issue No. 09-G, “Clarification of the Definition of Deferred Acquisition Cost of Insurance Entities”

    An insurance entity would be permitted to defer only those acquisition costs that are directly related to the acquisition of insurance contracts, by applying a model similar to the accounting for loan origination costs in Topic 310, Receivables.

    Insurance entities would be required to expense costs relating to unsuccessful contract efforts.

    An insurance entity would be required to account for advertising costs in accordance with Subtopic 340-20, Other Assets and Deferred Costs—Capitalized Advertising Costs or Subtopic 720-35, Other Expenses – Advertising Costs. Those costs would not qualify for capitalization as a deferred acquisition cost.

    The consensus-for-exposure would be applied prospectively in fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010.
     
  3. Issue No. 09-I, “Effect of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a Single Asset.”

    An entity would be prohibited from applying troubled debt restructuring accounting to loans that are pooled together and accounted for as a single asset.

    The consensus-for-exposure would apply to modifications of acquired loans accounted for within single pooled assets beginning in the first interim period after the amendments to the Codification from the proposed Update are made.
     
  4. Issue No. 09-J, “Impact of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in which the Underlying Equity Security Trades.”

    An entity would classify as equity an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trade, assuming all other criteria for equity classification are met.

    The consensus-for-exposure would be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010. The consensus-for-exposure would require a cumulative-effect adjustment to the opening balance of the entity’s retained earnings for all outstanding awards as of the beginning of the fiscal year in which the guidance is initially applied.