Action Alert No. 07-19
May 10, 2007


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

Wednesday, May 16, 2007, 9:00 a.m.

  1. Financial statement presentation (estimated 90-minute discussion). The Board will discuss the short- and long-term subcategories on the statement of financial position and presentation of information about liquidity. The Board also will discuss the level at which a diversified entity should apply the guidelines for classifying assets and liabilities as operating, investing, or financing.

  2. Agenda decision: Statement 133 hedging implementation Revised 05/14/07—This topic will be rescheduled to a future Board meeting.

  3. Statement 133 Implementation Issue—clarification of the application of the shortcut method (estimated 30-minute discussion). The Board will discuss issues that arose while drafting the proposed Statement 133 Implementation Issue.

  4. 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, May 16, 2007, 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, or FSP, or Statement 133 Implementation Issue.

May 2, 2007 Board Meeting

Conceptual framework: objectives and qualitative characteristics. The Board continued redeliberations of the July 2006 Preliminary Views, Conceptual Framework for Financial Reporting: Objective of Financial Reporting and Qualitative Characteristics of Decision-Useful Financial Reporting Information. The specific issues discussed related to (1) the qualitative characteristics of decision-useful financial reporting information and (2) general comments relating to the conceptual framework project taken as a whole. The Board made the following decisions:

  1. Faithful representation should be retained as a qualitative characteristic.

  2. Verifiability should be separated from faithful representation and identified as a separate qualitative characteristic.

  3. The description of faithful representation should be clarified to make clear that faithful representation is attained when the substance of an economic phenomenon is depicted completely and neutrally.

  4. The discussion of understandability in the Preliminary Views should be expanded to more clearly link it to the primary user group and to clarify the role that advisors play in aiding the primary user group.

  5. Timeliness should be separated from relevance and identified as a separate qualitative characteristic.

  6. Relevance and faithful representation should be distinguished as necessary qualitative characteristics. The Board will address the distinctions between necessary and enhancing qualitative characteristics and constraints on financial reporting at a later date.

  7. Conservatism and prudence are not qualitative characteristics of accounting information.

  8. Consideration of issues relating to not-for-profit entities will be deferred to a separate phase of the project to be conducted later. Where feasible when drafting conceptual framework documents, the Board should utilize terms that are compatible with the broad range of entities that makes up its constituency.

  9. The authoritative status of the framework should be considered once the framework is closer to being substantially complete. Due process documents should include a notice that the Board will consider the authoritative status of the framework in the future and that respondents should assume that the framework's authoritative status eventually will be elevated in the U.S. GAAP hierarchy to be comparable to the status of the framework in International Financial Reporting Standards.

Derivative disclosures. The Board approved the plan for redeliberations of the Exposure Draft, Disclosures about Derivative Instruments and Hedging Activities. The Board agreed to consider the following issues that were raised by respondents to the Exposure Draft:

  1. Project objectives and scope—whether to limit the scope of the project to derivative instruments and hedged items in designated and qualifying hedging relationships (as proposed)

  2. Tabular disclosure—level of disaggregation

  3. Notional amounts and leverage factors disclosures—whether notional amounts provide useful information

  4. Contingent features disclosures—definition

  5. Operational and system constraints

  6. Frequency of disclosures—annual versus interim periods

  7. Effective date—whether to delay the effective date to allow for operational and systems changes.

The Board agreed not to hold a public roundtable at this time to discuss whether the project scope should consider an entity's overall risk management activities and profile. Rather, the Board will consider other forms of constituent outreach to discuss this issue (and possibly other issues) once redeliberations are under way.


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 23, 2007—FASB Board Meeting
Wednesday, May 23, 2007—FASB Education Session
Wednesday, May 30, 2007—FASB Board Meeting
Wednesday, May 30, 2007—FASB Education Session
Friday, June 8, 2007—Liaison Meeting with Financial Executives International, Stamford, CT
Friday, June 8, 2007—FASB Education Session
Tuesday, June 12, 2007—Investors Technical Advisory Committee Meeting
Wednesday, June 13, 2007—FASB Board Meeting
Wednesday, June 13, 2007—FASB Education Session
Thursday, June 14, 2007—Emerging Issues Task Force Meeting
Tuesday, June 19, 2007—Financial Accounting Standards Advisory Council Meeting
Wednesday, June 20, 2007—Small Business Advisory Committee Meeting
Thursday, June 21, 2007—FASB Board Meeting
Thursday, June 21, 2007—FASB Education Session
Wednesday, June 27, 2007—FASB Board Meeting
Wednesday, June 27, 2007—FASB Education Session