SUMMARY OF BOARD DECISIONS
Summary of Board decisions 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 an Accounting Standards Update.
November 20, 2012 Joint FASB/IASB Videoconference Board
for financial instruments: impairment. The FASB and the IASB
discussed the FASB's Current Expected Loss Credit Model. The meeting was
informational and no decisions were reached.
contracts. The FASB and the IASB continued their joint discussions
on insurance contracts by discussing the discount rates for components of
contracts cash flows that are not subject to the "mirroring approach" but are
affected by expected asset returns. In a separate meeting, the FASB also
discussed when guarantee contracts that meet the definition of insurance should
be accounted for in accordance with the proposed insurance contracts
Discount Rates—Components of Contracts Cash Flows to Which
Mirroring Does Not Apply but That Are Affected by Expected Asset
The Boards tentatively decided to clarify that, for cash
flows in the insurance contract that are not subject to mirroring and are
affected by asset returns, the discount rates that reflect the characteristics
of the contract's cash flows should reflect the extent to which the estimated
cash flows are affected by the return from those assets. This would be the case
regardless of whether:
The Boards also
tentatively decided that, for cash flows in the insurance contract that are not
subject to mirroring and that are affected by asset returns, upon any change in
expectations of those cash flows (for example, the crediting rate) used to
measure the insurance contracts liability, an insurer should reset the locked-in
discount rates that are used to present interest expense for those cash
- The transfer of the expected returns of those assets are the result of the
exercise of the insurer's discretion, or
- The specified assets are not held by the insurer.
Scope—Guarantee Contracts (FASB-only
The FASB tentatively decided that the proposed
insurance contracts standard would apply to guarantee contracts within the scope
of FASB Accounting Standards Codification® Topic 944, Financial
Services–Insurance, and would not apply to guarantee contracts within the scope
of Topic 815, Derivatives and Hedging.
The FASB will consider this topic
further in a future meeting.
The FASB and the
IASB will continue their joint discussions on insurance contracts at their joint
meeting in January 2013.