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, June 6, 2018 FASB Board Meeting



Insurance—targeted improvements to the accounting for long-duration contracts. The Board redeliberated the amendments in the September 2016 proposed Accounting Standards Update, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.



Discount Rate Reset upon Initial Adoption (Liability for Future Policy Benefits for Traditional and Limited-Payment Contracts)



The Board decided to revise the modified retrospective transition method discount rate whereby as of the beginning of the earliest period presented (that is, the transition date) an insurance entity would retain the discount rate assumption for purposes of calculating net premiums and interest accretion. For balance sheet purposes, the liability would be remeasured at the current upper-medium grade fixed-income instrument yield, resulting in an adjustment to opening accumulated other comprehensive income at the transition date.



Effective Date



The Board decided that the effective date of the amendments in the final Update should be as follows:
  1. For public business entities, the amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.
  2. For all other entities, the amendments will be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.
Early adoption is permitted for all entities.



Next Steps



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



Distinguishing liabilities from equity (including convertible debt). [This summary will be posted as soon as it becomes available.]



Consolidation targeted improvements to related party guidance for variable interest entities. The Board reconsidered its May 16, 2018 decisions regarding effective date and transition requirements for private companies in adopting the forthcoming final Accounting Standards Update, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities.



The Board decided that:
  1. For private companies, the amendments in the Update will be effective for fiscal years beginning after December 15, 2020.
  2. Private companies may early adopt the amendments in the Update.
  3. Private companies must apply the amendments in the Update retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented.
Next Steps



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