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 a final standard.
October 21, 2009 Board Meeting
Accounting for financial instruments.The Board discussed how an entity would account for credit losses (that is, credit impairments) related to financial assets in the fair value through other comprehensive income category. The Board will continue to draft the exact wording of the credit impairment model. Below is a description of that model:At the end of each period, an impairment loss would be measured as the present value of management's current estimate of cash flows that are not expected to be collected. (That is, the impairment loss recognized in a period is the decrease in the net present value amount of cash flows expected to be collected.) In estimating the amount of future cash flows, an entity would consider all available information relating to past events and existing conditions that are relevant to the collectibility of the financial asset(s), such as the remaining payment terms, the financial condition of the issuer, expected defaults, and collateral values, as well as existing environmental factors such as industry, geographical, economic, and political data that indicate that some contractual cash flows are not expected to be collected. The entity would not consider possible future scenarios.
The Board will consider how interest income will be recognized at a future meeting.