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.

July 9, 2015 Board Meeting

Disclosure Framework: Disclosure Review—Fair Value Measurement. The Board discussed potential changes to the disclosure requirements for Topic 820, Fair Value Measurement. The Board directed the staff to research whether and how to augment existing disclosures about measurement uncertainty.


Disclosure Framework: Disclosure Review—Defined Benefit Plans. The Board discussed potential changes to the disclosure requirements for defined benefit plans. The Board decided that private companies would no longer be required to disclose a reconciliation of the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy. Instead, private companies would disclose transfers into and out of Level 3 of the fair value hierarchy and the amount of purchases of plan assets measured at Level 3 of the fair value hierarchy.


Clarifying the Definition of a Business. The Board continued its deliberations, discussing transition.

The Board decided that an entity would apply the proposed guidance prospectively to any transactions that occur on or after the effective date. The Board will not include a proposed effective date in the Exposure Draft.

The Board decided that an entity would not be required to provide the disclosures in paragraphs 250-10-50-1 through 50-3 or make any additional disclosures at transition.

The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot, with a comment period of 60 days.


Revenue Recognition—Deferral of the Effective Date of ASU 2014-09. The Board discussed comments received on its proposed Accounting Standards Update, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The proposed Update would defer the effective date of the guidance in Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (the new revenue standard), for all entities by one year. The proposed Update also would allow entities to apply the new revenue standard as of the original effective date.

Deferral of the Effective Date

The Board affirmed its proposal to defer the effective date of the new revenue standard for all entities by one year. As a result, public business entities, certain not-for-profit entities, and certain employee benefit plans will apply the new revenue standard to annual reporting periods beginning after December 15, 2017. All other entities will apply the new revenue standard to annual reporting periods beginning after December 15, 2018.

Public business entities, certain not-for-profit entities, and certain employee benefit plans will apply the new revenue standard to interim reporting periods within annual reporting periods beginning after December 15, 2017 (that is, beginning in the first interim period within the year of adoption). All other entities will apply the new revenue standard to interim reporting periods within annual reporting periods beginning after December 15, 2019 (that is, all other entities will not be required to apply the guidance in the new revenue standard in interim periods within the year of adoption).

Early Adoption Provision

The Board affirmed its proposal to permit all entities to apply the new revenue standard early, but not before the original effective date for public business entities, certain not-for-profit entities, and certain employee benefit plans (that is, annual periods beginning after December 15, 2016). Public business entities, certain not-for-profit entities, and certain employee benefit plans choosing this option will apply the new revenue standard to all interim reporting periods within the year of adoption. All other entities will not be required to apply the new revenue standard until interim periods after the first year of adoption.

Next Steps

The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.


Ratification of EITF Consensuses and Tentative Conclusions.

FASB Ratification of EITF Consensuses

The Board ratified the following consensuses reached at the June 18, 2015 Emerging Issues Task Force meeting. The Board directed the staff to draft final Accounting Standards Updates reflecting those consensuses for a vote by written ballot.

Issue No. 15-A, "Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets"

The EITF reached a consensus that specifies that the use of locational marginal pricing by an independent system operator to determine the transmission charge (or credit) does not constitute net settlement of a contract for the purchase or sale of electricity on a forward basis for transmission through, or delivery to a location within, a nodal energy market, even in scenarios in which legal title to the associated electricity is conveyed to the independent system operator during transmission. Consequently, the use of locational marginal pricing by the independent system operator does not cause that contract to fail to meet the physical delivery criterion of the normal purchases and normal sales scope exception. If the physical delivery criterion is met, along with all of the other criteria of the normal purchases and normal sales scope exception, an entity may elect to designate that contract as a normal purchase or normal sale.

The minutes of the June 18, 2015 EITF meeting, which will be posted to the FASB website the week of July 20, 2015, describe the consensus in detail.

Issue No. 15-C, "Employee Benefit Plan Simplifications"

Issue I: Fully Benefit-Responsive Investment Contracts

The EITF reached a consensus that requires that fully benefit-responsive investment contracts be measured, presented, and disclosed only at contract value, which maintains the relevant information while reducing the cost and complexity of reporting for fully benefit-responsive investment contracts. Plans will continue to provide disclosures that help users understand the nature and risks of fully benefit-responsive investment contracts.

Issue II: Plan Investment Disclosures

GAAP requires plans to disclose (1) individual investments that represent 5 percent or more of net assets available for benefits and (2) the net appreciation or depreciation for investments by general type. The EITF reached a consensus that eliminates those requirements for both participant-directed investments and nonparticipant-directed investments. The net appreciation or depreciation in investments for the period still will be required to be presented in the aggregate, but will no longer be required to be disaggregated and disclosed by general type.

The consensus also requires that investments (both participant-directed investments and nonparticipant-directed investments) of employee benefit plans be grouped only by general type, eliminating the need to disaggregate the investments in multiple ways. In addition, if an investment is measured using the net asset value per share (or its equivalent) practical expedient in Topic 820 and that investment is in a fund that files a U.S. Department of Labor Form 5500, Annual Return/Report of Employee Benefit Plan, as a direct filing entity, disclosure of that investment’s strategy will no longer be required.

Issue III: Measurement Date Practical Expedient

The EITF reached a consensus that provides a practical expedient to permit employee benefit plans to measure investments and investment-related accounts (for example, a liability for a pending trade with a broker) as of a month-end date that is closest to the plan’s fiscal year-end, when the fiscal period does not coincide with month-end.

If a plan applies the practical expedient and a contribution, distribution, and/or significant event occurs between the alternative measurement date and the plan’s fiscal year-end, the plan should disclose the amount of the contribution, distribution, and/or significant event. The plan also should disclose the accounting policy election and the date used to measure investments and investment-related accounts.

The minutes of the June 18, 2015 EITF meeting, which will be posted to the FASB website the week of July 20, 2015, describe the consensus in detail.

FASB Ratification of EITF Consensuses-for-Exposure

The Board ratified the following consensuses-for-exposure reached at the June 18, 2015 EITF meeting. The Board directed the staff to draft proposed Accounting Standards Updates reflecting those consensuses-for-exposure for a vote by written ballot. The Board decided to expose those proposed Updates for public comment for a period of approximately 60 days.

Issue No. 15-D, "Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships"

The EITF reached a consensus-for-exposure that clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedge accounting relationship.

The minutes of the June 18, 2015 EITF meeting, which will be posted to the FASB website the week of July 20, 2015, describe the consensus-for-exposure in detail.

Issue No. 15-E, "Contingent Put and Call Options in Debt Instruments"

The EITF reached a consensus-for-exposure that clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the consensus-for-exposure would be required to assess the embedded call (put) options solely in accordance with the four-step decision sequence.

The minutes of the June 18, 2015 EITF meeting, which will be posted to the FASB website the week of July 20, 2015, describe the consensus-for-exposure in detail.