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.

August 18, 2010 FASB Board Meeting

Disclosure of certain loss contingencies. The Board considered requests from stakeholders to extend the comment period for the proposed Accounting Standards Update, Contingencies (Topic 450): Disclosure of Certain Loss Contingencies. The Board decided to extend the original comment period of August 20, 2010, by an additional 30 days to September 20, 2010.


Disclosure framework. The Board discussed objectives and principles for the disclosure of information as part of general purpose financial reports and potential criteria for the Board’s use in establishing standards for required disclosures.

The Board directed the staff to explore and evaluate the following criteria that the Board might use when considering potential disclosure standards. Disclosures should:

The Board directed the staff to seek input on the potential criteria from members of the project’s resource group and other interested constituents to determine whether the criteria function as intended or might have undesirable consequences.


FASB ratification of EITF consensuses and tentative conclusions.The Board ratified the following consensuses reached at the July 29, 2010 EITF meeting.
  1. Issue 09-K, "Health Care Entities: Presentation of Insurance Claims and Related Insurance Recoveries"

    Anticipated insurance recoveries and estimated liabilities for medical malpractice claims or similar liabilities of health care entities should be presented separately on the balance sheet unless the criteria for offsetting in Subtopic 210-20 are met.

    The amendments to the Codification resulting from this consensus will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is permitted.

    The amendments to the Codification resulting from this consensus will be applied as of the beginning of the period of adoption with any difference between recognized liabilities and insurance receivables recognized as a cumulative-effect adjustment to opening retained earnings, with retrospective application permitted. Transition disclosures from paragraphs 250-10-50-1 through 50-3 are required in the period an entity adopts the provisions of the amendments resulting from this consensus.
     
  2. Issue 09-L, “Health Care Entities: Measuring Charity Care for Disclosure”

    Cost should be the measurement basis for a health care entity's charity care disclosure. Cost should be determined on the basis of the direct and indirect costs related to providing the service.

    The Task Force decided that the following recurring annual disclosures should be required by the amendments to the Codification resulting from this Issue:

    1. Reimbursements received intended to compensate an entity for providing charity care, for example, from an uncompensated care fund
    2. A description of the method used to determine the costs of providing charity care.
The amendments to the Codification resulting from this consensus will be effective in fiscal years beginning after December 15, 2010, with early adoption permitted. The amendments to the Codification resulting from this consensus will be applied retrospectively.

The Board also ratified the following consensuses-for-exposure reached at the July 29, 2010 EITF meeting. Each consensus-for-exposure will be exposed for 45 days.
  1. Issue 10-D, "Accounting for Certain Fees Associated with Recently Enacted Health Care Legislation"

    On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA). In addition, the President signed into law the Health Care and Education Reconciliation Act, which includes a number of changes to the PPACA (in combination, the "Acts") on March 30, 2010.

    A pharmaceutical manufacturing entity’s portion of the annual fee in accordance with the Acts should be presented as an operating expense. Upon recognition of the liability, the annual fee should be recognized over the calendar year in which it is payable, using a straight-line method of allocation unless another method better allocates the annual fee over the calendar year.

    The amendments to the Codification resulting from this consensus-for-exposure would be effective in fiscal years, and interim periods within those years, beginning after December 31, 2010. Transition is not necessary for the consensus-for-exposure because the annual fee will not affect a reporting entity’s income statement until after the date on which the Task Force will consider affirming the consensuses-for-exposure in this Issue as a consensus.
     
  2. Issue 10-F, "Accounting for Legal Costs Associated with Medical Malpractice Claims"

    Healthcare entities are no longer required to accrue the costs associated with litigating or settling claims when accruing for malpractice claims. Instead, health care entities will be allowed to make a policy election to expense legal fees as incurred or accrue estimated legal fees when the associated claim is incurred.

    The effective date will be determined after the comment period. The amendments to the Codification resulting from this consensus-for-exposure would be applied retrospectively.