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.
June 20, 2012 FASB Board Meeting
Accounting
for financial instruments: classification and
measurement.
Presentation of Changes in Fair Value
Attributable to Changes in "Own Credit" for Financial Liabilities Measured at
FVNI Designated under the Fair Value Option
The Board discussed the
presentation of changes in fair value that result from a change in a reporting
entity's own credit risk for financial liabilities that are designated under the
fair value option and, thus, measured at fair value with all changes in fair
value recognized in net income (FVNI). The Board decided that an entity would
present such changes separately in other comprehensive income (OCI). The Board
also decided that cumulative gains and losses recognized in OCI associated with
changes in own credit will be recognized in net income upon the settlement of
the liability. In addition, the entire risk in excess of a base market risk,
such as a risk-free interest rate, would be considered as the change in own
credit or an alternative method that an entity deems as a more faithful
measurement of such a risk.
Nonmarketable Equity Securities
Practicability Exception for Public Entities
The Board discussed
whether to permit an exception to the measurement approach for nonmarketable
equity securities (other than instruments that are measured according to the
equity method of accounting or result in consolidation of an entity) held by
public entities. The Board decided to provide public entities with the same
practicability exception for measuring investments in nonmarketable equity
securities as that provided to nonpublic entities.
Presentation
of comprehensive income: reclassifications out of accumulated other
comprehensive income. The Board discussed feedback received from
preparers and users of financial statements about the costs and potential
benefits of the presentation requirements for reclassifications out of
accumulated other comprehensive income in Accounting Standards Update 2011-05.
These requirements were deferred by Accounting Standards Update No. 2011-12,
Comprehensive Income (Topic 220): Deferral of the Effective Date for
Amendments to the Presentation of Reclassifications of Items Out of Accumulated
Other Comprehensive Income in Accounting Standards Update No. 2011-05. The
Board discussed whether to reinstate the presentation requirements from Update
2011-05. The Board also discussed alternative presentation
requirements.
The Board decided that the presentation requirements
deferred in Accounting Standards Update 2011-12 would not be reinstated because
of the excessive costs to preparers and the potential cluttering effect on the
statement(s) where comprehensive income is reported. These requirements would
have required an entity to present on the face of the financial statement where
net income is presented the effect of items reclassified from accumulated other
comprehensive income on the line items of net income. As an alternative, the
Board decided that user's needs for information about items reclassified from
accumulated other comprehensive income and their corresponding impact on net
income could be aided, with little cost to preparers, by requiring an entity to
provide enhanced disclosures to explain the effect of reclassification
adjustments on other comprehensive income by component. In addition, an entity
would be required to provide a tabular disclosure showing the effect of items
reclassified from accumulated other comprehensive income on the line items of
net income with references to other disclosures required under U.S.
GAAP.
The Board directed the staff to draft a proposed Accounting
Standards Update for vote by written ballot. The Board decided that the comment
period on the Exposure Draft will be 60 days.