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 30, 2021 FASB Board Meeting



Leases (Topic 842): lessors—leases with variable lease payments. The Board discussed a sweep issue related to the transition and effective date provisions for the forthcoming Accounting Standards Update, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, and made the following decision.



Transition and Effective Date



The Board decided that entities that have not adopted Topic 842 on or before the issuance date (not effective date) of the forthcoming final Update should follow the transition requirements in paragraph 842-10-65-1.





Disclosure of supplier finance programs involving trade payables. The Board discussed the scope and disclosures. The Board made the following decisions.



Scope



The Board decided that the scope would describe the overall arrangements and would use certain contractual terms (such as the buyer confirmation) as indicators that an arrangement has been established, rather than being a prescriptive approach focused only on buyer confirmation.



The Board decided not to pursue broader improvements on overall payables in this project.



Disclosures



The Board decided to require the buyer party to disclose the following for the in-scope arrangements:
  1. The key terms of the arrangement as identified by management
  2. The amount confirmed by the buyer (that is, the amount that the buyer has made available for suppliers to elect to be paid early for) that is outstanding at the end of the reporting period, and a description of where that amount is presented in the balance sheet.
The Board decided that the following disclosures would not be required:
  1. The amount paid early by the finance provider that is outstanding at the end of the reporting period.
  2. The cash flow statement presentation of any of the following:
    1. The amount paid early by the finance provider in the current period if that amount is considered a cash flow to the buyer
    2. The amount confirmed by the buyer in the current period or prior periods but settled in the current period
    3. The average payment term for participating suppliers.
Next Steps



The Board directed the staff to perform limited outreach with users on the usefulness of a rollforward of the amount confirmed by the buyer that is outstanding at the end of the reporting period.