Tentative Board Decisions
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.
January 14, 2015 FASB Board Meeting
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 disclosures about core deposit liabilities and
hybrid financial instruments containing bifurcated embedded derivatives,
the benefits, costs, and complexity of the decisions reached to date,
and the transition method.
Disclosures about Core Deposit Liabilities
The Board decided not to retain the proposed disclosures about core
deposit liabilities. The proposal would have required public business
entities to disclose, for each annual period, the balance of its core
deposit liabilities, the weighted-average life of the core deposit
liabilities based on the entity's historical experience, and a
qualitative description of what management considers to be core
deposits.
Disclosures about Hybrid Financial Instruments Containing Bifurcated Embedded Derivatives
The Board decided that entities should be required to disclose the
carrying amount, measurement attribute, and line item within the
financial statements in which bifurcated embedded derivatives and
related host contracts are presented and that the disclosure should be
provided in financial statements issued after the change is effective
(prospective transition).
The Board decided to expose that proposed disclosure for public comment
and directed the staff to draft a proposed Accounting Standards Update
with a comment period ending April 30, 2015, for vote by written ballot.
The Board will decide whether and how to finalize that change after it
considers the stakeholder feedback received.
Benefits and Costs
The Board discussed a staff analysis of the benefits, costs, and
complexity of the proposed changes to generally accepted accounting
principles. A majority of the Board believe that the expected benefits
of those changes justify the perceived costs of providing and using the
information.
The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.
Transition
The Board affirmed its decision in the February 2013 proposed Update to
require a modified retrospective transition approach that will require a
cumulative-effect adjustment to the statement of financial position as
of the beginning of the first reporting period in which the guidance is
effective. The Board also decided that the guidance for the practical
expedient related to nonmarketable equity securities and the disclosure
requirements should be effective prospectively.
Next Steps
The Board will discuss and decide on the effective date of the changes
after the final Accounting Standards Update has been drafted.