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.

Wednesday, February 1, 2017 FASB Board Meeting

Agenda consultation. The Board discussed feedback received on Chapter 4, "Reporting Performance and Cash Flows," of its 2016 Invitation to Comment, Agenda Consultation, and the different subtopics of that chapter. The Board also discussed additional research and analysis it would like the staff to perform for discussion at future Board meetings. The meeting was educational and no technical decisions were made.

Next Steps

The staff will prepare additional analysis on potential path dependencies related to the different subtopics and the Conceptual Framework project for discussion at a future Board meeting.


Accounting for interest income associated with the purchase of callable debt securities. The Board discussed comments received on its September 2016 proposed Accounting Standards Update, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The Board discussed the following themes found in responses to the proposed Update and next steps:
  1. Requests to require a true "yield-to-worst" amortization method
  2. Requests to clarify consequential amendments to paragraph 946-320-35-20
  3. Requests to clarify "callable" and the interaction with paragraph 310-20-35-26
  4. Requests to clarify whether all premiums should be amortized to the earliest call date
  5. Transition and effective date
  6. Costs, benefits, and complexity.
Requests to Require a True "Yield-to-Worst" Amortization Method

The Board decided that premiums on purchased callable debt securities should be amortized to the earliest call date.

Requests to Clarify Consequential Amendments to Paragraph 946-320-35-20

The Board decided to correct the consequential amendment to industry guidance to clarify that the Board did not intend to broadly change practice for investment companies that hold debt securities.

Requests to Clarify "Callable" and the Interaction with Paragraph 310-20-35-26

The Board decided to amend paragraph 310-20-35-33 to clarify that the "callable" instruments in the scope of the amendments should include only instruments that are callable based on an explicit decision by the issuer and should not include those instruments that contain prepayment features, call options that are contingent upon the occurrence of future events, or call options in which the timing or amount to be paid is not fixed.

Requests to Clarify Whether All Premiums Should Be Amortized to the Earliest Call Date

The Board decided to clarify that all premiums, regardless of how they were generated, should be amortized to the earliest call date.

Transition and Effective Date

The Board affirmed that the amendments in the proposed Update should be applied through a cumulative-effect adjustment to the opening retained earnings as of the beginning of the first reporting period in which the final amendments are adopted.

The Board also affirmed the amendments in the proposed Update on transition disclosures.

The Board decided that the effective dates of the final guidance should be as follows:
  1. For public business entities—fiscal years and interim periods within those fiscal years, starting after December 15, 2018, with early adoption permitted
  2. For entities other than public business entities—fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, with early adoption permitted.
Costs, Benefits, and Complexity

The Board decided that the benefits justify the costs and directed the staff to draft an Accounting Standards Update for vote by written ballot.