Tentative Board decisions are provided for those interested in following
the Board´s deliberations. All of the reported decisions are tentative and may
be changed at future Board meetings.
April 23, 2014 FASB Board Meeting
Cash Flows
Pre-agenda Research. The Board discussed the pre-agenda research work on
Topic 230, Statement of Cash Flows. Specifically, the Board discussed cash flow
issues related to the classification of certain types of cash receipts and cash
payments. The meeting was educational; no decisions were made.
Next
Steps
The Board will decide at its April 28, 2014 agenda
prioritization meeting whether to add a project on this Topic to its technical
agenda.
Accounting
for Financial Instruments—Classification and Measurement. The Board
continued redeliberating the February 2013 proposed Accounting Standards Update,
Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement
of Financial Assets and Financial Liabilities, specifically discussing how
an entity would present changes in fair value arising from a change in
instrument-specific credit risk for financial liabilities measured at fair value
through net income.
The Board affirmed the decision reached at its April
4, 2014 meeting to retain the fair value option in Topic 825.
The Board
decided that when an entity uses the fair value option to measure a financial
liability at fair value, it would present separately in other comprehensive
income the portion of the total fair value change caused by a change in
instrument-specific credit risk. The Board also decided that an entity may
consider the portion of the total change in fair value that exceeds the amount
resulting from a change in a base market risk, such as a risk-free interest
rate, to be the result of a change in instrument-specific credit risk.
Alternatively, an entity may determine the effect of changes in the
instrument-specific credit risk by using another method that it considers to
more faithfully represent that change. An entity would be required to disclose
what method it uses to determine the gains and losses attributable to
instrument-specific credit risk and should apply that method consistently from
period to period.
The Board decided that an entity should continue to
present in net income the changes in fair value due to instrument-specific
credit risk for derivative liabilities.