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.

Wednesday, June 1, 2016 FASB Board Meeting

Conceptual framework—presentation. The Board continued its deliberations on the proposed chapter on presentation. The Board decided:

1. To focus on information about assets, liabilities, equity, revenues, expenses, gains, and losses rather than requiring specific financial statements.
2. That in grouping recognized items into line items, to consider the form of settlement of a liability or realization of an asset.
3. To incorporate some of the discussion of central, peripheral, operating, and nonoperating in FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements of Business Enterprises, into the proposed chapter.
4. To emphasize that the Conceptual Framework is a nonauthoritative tool for the Board’s use in its standard-setting activities.

The Board directed the staff to draft a proposed Concepts Statement for vote by written ballot with a 90-day comment period. The Board also decided to issue the proposed chapter on presentation separate from the proposed chapter on measurement. The Board plans to include a question in the proposed Concepts Statement about whether particular aspects of the Board’s decisions could be used in determining whether specific characteristics of a single contract should be presented separately or whether specific characteristics of multiple recognized items should be grouped together for presentation purposes.


Disclosure framework: disclosure review—fair value measurement. The Board discussed a summary of comments received on the proposed Accounting Standards Update, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The staff plans to conduct outreach with investors and other financial statement users on the proposed Update. The Board made no technical decisions.


Financial statements of not-for-profit entities. The staff reported on various issues identified during the drafting and external review process of the forthcoming final Accounting Standards Update, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements for Not-for-Profit Entities. The Board discussed three of those issues:

1. Presentation of the net investment return within the statement of activities
2. Inclusion of investment expenses that have been netted against investment return in the analysis of expenses by nature and function
3. Disclosure of unrealized gains and losses on equity securities.

The Board also discussed the expected benefits, costs, and complexities of the forthcoming final Accounting Standards Update.

Presentation of the Net Investment Return within the Statement of Activities

The Board decided to permit a not-for-profit entity (NFP) to present its net investment return managed differently or derived from different sources in multiple line items within the statement of activities, if appropriately labeled. For example, if an NFP has net investment return generated from operating cash, it may present that return separately from net investment return generated from its endowment. Similarly, an NFP may present the amounts of net investment return appropriated for spending separate from net investment return in excess of amounts appropriated for spending. The Board also affirmed that higher education institutions would no longer be required to display an investment return of the “other investment portfolio” separately from other components of net investment return.

Inclusion of Investment Expenses That Have Been Netted against Investment Return in the Analysis of Expenses by Nature and Function

The forthcoming final Accounting Standards Update requires an NFP to disclose an analysis of expenses by nature and function. The Board decided to preclude an NFP from including investment expenses that have been netted against investment return in that analysis.

Disclosure of Unrealized Gains and Losses on Equity Securities

The Board decided to eliminate the requirement that an NFP disclose the portion of unrealized gains and losses for the period that relates to equity securities still held at the reporting date, as required under Accounting Standards Update No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.

Expected Benefits, Costs, and Complexities of the Final Accounting Standards Update

The Board concluded that the overall expected benefits of the financial reporting changes justify the expected costs of preparing and using the information.

Next Steps

The staff is finalizing the draft of the forthcoming Accounting Standards Update, and the Board plans to issue the final Accounting Standards Update in the summer of 2016.