Action Alert No. 08-05
January 31, 2008

NOTICE OF MEETINGS

OPEN BOARD MEETING
(Board meetings are available by audio webcast and telephone.)

Wednesday, February 6, 2008, 9:00 a.m.

  1. Statement 157 implementation. The Board will discuss the following:

    1. Application of Statement 157 to Statement 13 and its related interpretive accounting pronouncements that address leasing transactions (estimated 45-minute discussion). The Board will discuss issues raised by respondents to proposed FSP FAS 157-a, Application of FASB Statement No. 157 to FASB Statement No. 13 and Its Related Interpretive Accounting Pronouncements That Address Leasing Transactions. The Board will focus on the scope of the FSP and whether to issue the FSP as final.

    2. Partial deferral of the effective date of Statement 157 (estimated 30-minute discussion). The Board will discuss issues raised by respondents to proposed FSP FAS 157-b, Effective Date of FASB Statement No.157. The Board will discuss whether to issue the FSP as final.

  2. Deferral of the effective date of AICPA SOP 07-1 (estimated 30-minute discussion). The Board will discuss issues raised by respondents to proposed FSP SOP 07-1-a, Effective Date of AICPA Statement of Position 07-1. The Board will discuss whether to issue the FSP as final.

  3. Open discussion. If necessary, the Board will allow time to discuss minor issues with staff members on technical projects or administrative matters. Those discussions are held following regular Board meetings as topics come up.

OPEN EDUCATION SESSION

Wednesday, February 6, 2008, following the Board meeting

The Board will hold an educational, non-decision-making session to discuss topics that are anticipated to be discussed at a future Board meeting. Those topics will be posted to the FASB calendar four days prior to the education session.

BOARD ACTIONS

The Board Actions are provided for the information and convenience of constituents who want to follow the Boardís deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue a final Statement, Interpretation, FSP, or Statement 133 Implementation Issue.

January 23, 2008 Board Meeting

Earnings per share. The Board reached the following decisions in addressing the drafting issues of the revised Exposure Draft:

  1. The Board affirmed its decision that instruments that may be settled in cash or shares and are measured at fair value with changes in fair value recognized in earnings would be excluded from the denominator of the diluted earnings per share. The Board acknowledged that in some cases, which it thinks would be rare, inclusion of those instruments in earnings per share under the treasury stock and reverse treasury stock methods would be dilutive.

  2. A financial instrument or contract subject to FASB Statement No. 123 (revised 2004), Share-Based Payment, that is recognized (or will be recognized upon satisfaction of a performance or service condition) as a liability and measured under that Statementís fair-value-based measurement approach would also be excluded from the denominator of diluted earnings per share.

  3. The Board decided not to require additional disclosures relating to those instruments in items 1 and 2 above but directed the staff to include questions in the notice for recipients about the need for additional disclosure.

Accounting for trading inventory. The Board resumed deliberations of a draft of a proposed FSP on accounting for trading inventory and discussed scope, disclosure requirements, transition, and comment period. The Board decided to:

  1. Amend paragraph 17 of ARB No. 43, Restatement and Revision of Accounting Research Bulletins, to require mark-to-market accounting if the entity is trading the inventory.

  2. Include disclosure requirements for situations in which an entity would transfer inventory from nontrading to trading and vice versa.

  3. Require a prospective transition method with a cumulative-effect adjustment to retained earnings.

The Board authorized the staff to proceed to a draft of a proposed FSP for vote by written ballot, with a 45-day comment period.

Deferral of the effective date of Interpretation 48 for nonpublic entities. The Board discussed issues raised in proposed FSP FIN 48-b, Effective Date of FASB Interpretation No. 48 for Nonpublic Enterprises. The Board decided to:

  1. Modify the FSP to indicate that a nonpublic enterprise would be eligible for the deferral unless the enterprise issued a full set of annual financial statements incorporating the recognition, measurement, and disclosure requirements of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, prior to the issuance of the final FSP.

  2. Amend the FSP to exclude a nonpublic subsidiary of a public company from the scope of deferral.

  3. Extend the deferral to annual periods beginning after December 15, 2007.

  4. Affirm that the deferral of Interpretation 48 is not applicable to leveraged lease transactions.

The Board authorized the staff to proceed to a draft of the final FSP for vote by written ballot.

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through March. Because schedules may change, please check the FASB calendar before finalizing your plans. Revisions to this list since the last issue of Action Alert are highlighted in bold.

Wednesday, February 13, 2008—FASB Board Meeting
Wednesday, February 13, 2008—FASB Education Session
Wednesday, February 20, 2008—FASB Board Meeting
Wednesday, February 20, 2008—FASB Education Session
Wednesday, February 27, 2008—FASB Board Meeting
Wednesday, February 27, 2008—FASB Education Session
Wednesday, March 5, 2008—FASB Board Meeting
Wednesday, March 5, 2008—FASB Education Session
Wednesday, March 12, 2008—FASB Board Meeting
Wednesday, March 12, 2008—Emerging Issues Task Force Meeting
Tuesday, March 18, 2008—Financial Accounting Standards Advisory Council Meeting
Wednesday, March 19, 2008—FASB Board Meeting
Wednesday, March 19, 2008—FASB Education Session
Wednesday, March 26, 2008—FASB Board Meeting
Wednesday, March 26, 2008—FASB Education Session