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.

April 28, 2010 FASB Board Meeting

Disclosures about credit quality and the allowance for credit losses. The Board met today to discuss three issues: modifications, leveraged leases, and effective date.

Modifications and Subsequent Defaults

The Board considered what disclosures should be required about modifications made to financing receivables and subsequent defaults of those modified receivables. The Board decided to require creditors to provide the following disclosures:
  1. Qualitative and quantitative information about troubled debt restructurings and any other significant modifications where a concession has been made, including:

    1. Information by class of financing receivable that would allow financial statement users to understand the nature and extent of modifications made during the period, such as the following:

      1. Qualitative information about the nature of modifications done
         
      2. Quantitative information about the extent and financial effects of modifications made during the period
         
    2. Qualitative information by portfolio segment about how modifications are factored into the determination of the allowance for loan losses
       
  2. Qualitative and quantitative information about troubled debt restructurings within the last year, or other significant modifications of financing receivables within the last year where a concession has been made, that then defaulted in the current reporting period, including:

    1. Information that would allow financial statement users to understand the nature and extent of subsequent defaults and their effect on the allowance for loan losses during the period, such as the following:

      1. Quantitative information by class of financing receivable about troubled debt restructurings or other significant modifications where a concession has been made that defaulted within one year of modification
         
      2. Qualitative information by portfolio segment about how subsequent defaults are factored into the determination of the allowance for loan losses.
Leveraged Leases

The Board decided that only credit quality disclosures should be provided for leveraged leases. The Board decided that disclosures about the allowance for credit losses should not be provided for leveraged leases.

Effective Date

The Board decided to provide a delayed effective date of the final Accounting Standards Update for nonpublic entities. The final Update will be effective for nonpublic entities for annual reporting periods ending after December 15, 2011. For all other entities, the final Update will be effective for interim and annual reporting periods ending after December 15, 2010. Disclosures for earlier periods presented for comparative purposes will not be required at initial adoption for any entities.

The Board directed the staff to draft an Update for vote by written ballot.


Accounting for financial instruments. The Board discussed the following issues:
  1. How an entity should present the change in value of financial instruments included in accumulated other comprehensive income
     
  2. The presentation of significant changes in fair value related to changes in an entity’s own credit standing in the statement of comprehensive income
     
  3. The comment period for the proposed Accounting Standards Update on accounting for financial instruments.
The Board decided an entity would separately present in the statement of financial position amounts included in accumulated other comprehensive income related to the changes in fair value or changes in the remeasurement amount for financial instruments for which those changes are recognized in other comprehensive income.

The Board affirmed its February 24, 2010 decision that an entity would disclose on the face of the statement of comprehensive income, significant changes in the fair value of a financial liability arising from changes in the entity’s own credit standing (excluding changes in the price of credit). The Board decided to describe possible methods for calculating these changes in fair value in an appendix to the proposed Update.

The Board decided that the comment period for the proposed Update would end on September 30, 2010.

The Board directed the staff to draft a proposed Update for vote by written ballot.