Action Alert No. 08-15
April 10, 2008


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

Wednesday, April 16, 2008, 9:00 a.m.

  1. Financial reporting by entities in reorganization under the bankruptcy code (estimated 30-minute discussion). The Board will discuss issues raised by respondents to proposed FSP SOP 90-7-a, An Amendment of AICPA Statement of Position 90-7, and whether to issue that FSP as final.

  2. 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.


Wednesday, April 16, 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.


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.

April 2, 2008 Board Meeting

Statement 140 implementation—transfers of financial assets. The Board decided to remove the concept of a qualifying special-purpose entity from FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities.

The Board also decided to amend the derecognition criteria in Statement 140 to improve financial reporting in the short term and to consider working on a joint derecognition research project with the IASB. Specifically, the Board voted to amend paragraphs 9(a) and 9(c) and to remove paragraph 9(b). Paragraph 9(a) will be clarified to require that the transferred financial assets must be beyond the reach of the transferor or any of its consolidated affiliates. Additionally, the isolation analysis must consider all arrangements made in connection with the transfer. Paragraph 9(c) will be amended to include an additional criterion that states that if the transferor constrains the transferee, the transferor maintains effective control over the transferred assets. This change incorporates similar requirements from current paragraph 9(b).

Lastly, the Board decided that only an entire financial asset or a participating interest of an individual financial asset will be eligible for derecognition. The participating interest may not be an interest in an equity instrument, a derivative financial instrument, or a hybrid financial instrument with an embedded derivative not clearly and closely related to the original financial asset. Additionally, the definition of a participating interest requires that (1) the cash flows received from the assets are divided among the interests in proportion to the share of ownership represented by each, (2) the participating interest holders have no recourse, other than standard representations and warranties, to the transferor or each other, (3) no interest holder is subordinated to another, and (4) neither the transferor nor any participating interest holder has the right to pledge or exchange the entire financial asset in which it owns a participating interest.

Open discussion: agenda decision—credit derivatives. The FASB chairman announced a project that will consider improvements to disclosures about credit derivatives accounted for under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, was added to the Board’s agenda.


The following is a list of open meetings tentatively scheduled through May. 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.

Monday, April 21, 2008—FASB/IASB Joint Board Meeting, London
Tuesday, April 22, 2008—FASB/IASB Joint Board Meeting, London
Thursday, April 24, 2008—FASB Education Session
Wednesday, April 30, 2008—FASB Board Meeting
Wednesday, April 30, 2008—FASB Education Session
Tuesday, May 6, 2008—FASB Insurance Forum
Wednesday, May 7, 2008—FASB Board Meeting
Wednesday, May 7, 2008—FASB Education Session
Wednesday, May 14, 2008—FASB Board Meeting
Wednesday, May 14, 2008—FASB Education Session
Wednesday, May 21, 2008—FASB Board Meeting
Wednesday, May 21, 2008—FASB Education Session
Thursday, May 22, 2008—Liaison Meeting with Healthcare Financial Management Association
Wednesday, May 28, 2008—FASB Education Session