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.

May 4, 2010 FASB/IASB Joint Videoconference Board Meeting
 
Consolidation. The Boards discussed the overall disclosure principles, disclosures for consolidated subsidiaries, disclosures for unconsolidated structured entities, and disclosures related to investment companies.

In March 2010, the Boards tentatively decided that a reporting entity should disclose information that helps users of financial statements understand the nature of, and changes in, the risks associated with the reporting entity’s involvement with other entities and how those risks affect future cash flows. At today’s meeting, the Boards clarified that for disclosure purposes a reporting entity has an involvement with a structured entity when the reporting entity is exposed to variability of returns from its involvement with the structured entity.

The Boards discussed whether a reporting entity should disclose (1) income from its involvement with structured entities that it has set up or sponsored and (2) the fair value of assets recognized by those structured entities at the time that the structured entities are established. The IASB tentatively decided that, subject to further drafting changes, these disclosures should be included in the disclosure standard. The FASB tentatively decided not to specifically require such disclosures, but that the disclosure related to the income from the entity’s involvement with structured entities that it has set up or sponsored should be covered by the overall disclosure principles.

The Boards discussed but did not reach any decisions on the overall disclosure principles or the disclosures for subsidiaries. The Boards will continue their discussion at their next meeting.

The Boards also discussed the disclosure requirements for investment companies. The Boards tentatively decided that an investment company should disclose the following:

  1. Whether it has provided any financial or other support to any of its controlled investees that it was not previously contractually required to provide
  2. The nature and extent of any significant restrictions on the ability of its controlled investees to transfer funds to the investment company.
The Boards also tentatively agreed that an investment company should not be required to present summarized financial information for controlled investments. The IASB will discuss at a future meeting whether an investment company should provide additional disclosures about the investees, similar to the current investment company presentation and disclosure requirements in U.S. GAAP.

Statement of comprehensive income. The Boards discussed:

1. Whether to change the title of the Exposure Draft for the statement of comprehensive income

The IASB decided to:

Change the title of the Exposure Draft for the statement of comprehensive income to “statement of profit or loss and other comprehensive income.” The title will not be mandatory but will be used in all IFRS literature.

The FASB decided to:

Keep using the title “statement of comprehensive income” for the Exposure Draft of a proposed Accounting Standards Update.

2. Timeline for issuing the proposed accounting standards

The Boards plan to issue the proposed accounting standards in May 2010.


Conceptual framework: measurement. The Boards discussed a staff paper that proposed working toward a neutral Discussion Paper as the first due process document for the measurement phase of the conceptual framework project. The staff paper included possible discussion questions as well as possible alternative views with respect to those questions.

The Boards decided not to produce a neutral Discussion Paper, but rather to continue to attempt to develop preliminary views using the questions and views in the staff paper as an aid.