Action Alert No. 08-20
May 15, 2008
NOTICE OF MEETINGS
OPEN BOARD MEETING
meetings are available by audio webcast and telephone.)
Wednesday, May 21, 2008, 9:00 a.m.
140 implementation: transfers of financial assets (estimated
30-minute discussion). The Board will discuss whether to amend the
guidance related to the measurement of interests that continue to be
held by the transferor.
- 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, May 21, 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.
OPEN MEETING WITH REPRESENTATIVES OF THE HEALTHCARE FINANCIAL
Thursday, May 22, 2008, 1:00 p.m.
The Board will meet with representatives of the Principles &
Practices Board of the Healthcare Financial Management Association to
discuss matters of mutual interest.
The Board Actions are provided for the information and convenience
of constituents who want to follow the Board's 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.
May 7, 2008 Board Meeting
framework: elements and recognition. The Board discussed the
following two issues related to the working definition of a liability that
is being developed in the elements and recognition phase (Phase B) of the
joint conceptual framework:
- Distinguishing a liability from a business risk. The Board
agreed that the existence of a present economic obligation distinguishes
a liability from general business risks. The Board generally agreed
that, in concept, a present economic obligation exists when:
The Board also agreed that laws and regulations are
examples of mechanisms and are not, by themselves, present obligations.
- An entity is committed to a particular action or actions that are
capable of resulting in cash outflows.
- There is a mechanism to enforce that economic obligation against
- Identifying a stand-ready obligation. The Board agreed that
it is helpful to analyze contracts and other binding agreements to
identify whether they contain unconditional and conditional obligations.
An unconditional obligation requires performance to occur now or over a
period of time, whereas a conditional obligation requires performance to
occur if an uncertain future event occurs. In situations where a
conditional obligation is identified, it can be helpful to assess
whether there is an accompanying unconditional obligation that presently
requires the entity to perform. The Board also agreed that
noncontractual scenarios can be analyzed to identify unconditional and
The IASB separately discussed the above issues as part of joint work on
its project on liabilities and equity (revisions of IAS 37) and the
conceptual framework project, and reached similar conclusions.
whether instruments granted in share-based payment transactions are
participating securities. The Board discussed two significant
issues in the draft of final FSP EITF 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions are Participating
Securities, and decided the following:
- When calculating basic earnings per share pursuant to the two-class
method, all awards that contain rights to nonforfeitable dividends
should be considered participating securities. Dividends or dividend
equivalents actually paid on share-based payment awards not expected to
vest should be excluded from the earnings allocation to avoid counting
the dividends as both compensation cost and distributed earnings.
Undistributed earnings should be allocated to all outstanding
share-based payment awards, including those that are not expected to
- The effective date should be the first reporting period beginning
after the date the final FSP is posted to the FASB website.
The Board instructed the staff to continue drafting the final FSP for
vote by written ballot.
FASB DOCUMENTS AVAILABLE
The following final documents were issued and are available on the FASB
No. 162, The Hierarchy of Generally Accepted Accounting
Principles (May 9, 2008)
14-1, Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash Settlement)
(May 9, 2008)
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
June. 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, May 28, 2008—FASB Education Session
Wednesday, June 4,
2008—FASB Board Meeting
Wednesday, June 4, 2008—FASB Education
Tuesday, June 10, 2008—Investors Technical Advisory Committee
Wednesday, June 11, 2008—FASB Board Meeting
11, 2008—FASB Education Session
Thursday, June 12, 2008—Emerging Issues
Task Force Meeting
Monday, June 16, 2008—FAF/FASB Forum on High-Quality
Global Accounting Standards: Issues and Implications for U.S. Financial
Reporting, New York City
Wednesday, June 18, 2008—FASB Board
Wednesday, June 18, 2008—FASB Education Session
June 19, 2008—Liaison Meeting with Financial Executives International,
Tuesday, June 24, 2008—Financial Accounting Standards
Advisory Council Meeting
Wednesday, June 25, 2008—FASB Board
Wednesday, June 25, 2008—FASB Education Session
27, 2008—Small Business Advisory Committee