Action Alert No. 05-03
January 20, 2005


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

Wednesday, January 26, 2005, 9:00 a.m.

  1. Combinations of not-for-profit (NFP) organizations. The Board will address issues related to (a) the accounting by an NFP organization for the acquisition of less than 100 percent of a subsidiary, (b) accounting for and reporting of noncontrolling interests in the consolidated financial statements of an NFP organization, and (c) issues relating to goodwill impairment testing. (Estimated 60-minute discussion.)

  2. Interpretation of Statement 143. The Board will discuss an agenda request to reconsider the guidance in FASB Statement No. 143, Accounting for Asset Retirement Obligations, and whether to provide additional guidance for evaluating whether sufficient information is available to make a reasonable estimate of the fair value of an asset retirement obligation. (Estimated 30-minute discussion.)

  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.


Wednesday, January 26, 2005, immediately following the Board meeting

The Board will hold an educational, non-decision-making session to discuss topics that are anticipated to be discussed at the February 2, 2005 Board meeting. Those topics will be posted to the FASB calendar four days prior to the education session.


Friday, January 28, 2005, 10:00 a.m.

The Board will meet with representatives of the Accounting Standards Subcommittee of the Committee on Law and Accounting of the American Bar 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 or Interpretation.

January 12, 2005 Board Meeting

FASB Staff Position (FSP): suspended well costs. The Board discussed issues related to a proposed FSP that would amend the guidance for suspended well costs in FASB Statement No. 19, Financial Accounting and Reporting by Oil and Gas Producing Companies. The Board made the following decisions:

  1. The scope of the proposed FSP should include both exploratory and exploratory-type stratigraphic wells (collectively referred to as exploratory wells).

  2. Exploratory well costs should continue to be capitalized when (a) the well has found a sufficient quantity of reserves to justify completion as a producing well and (b) the enterprise is making sufficient progress assessing the reserves and the economic and operating viability of the project. If either of these criteria is not met, or if an enterprise obtains information that raises substantial doubt about the economic or operational viability of the project, the exploratory well costs should be assumed to be impaired and its costs, net of any salvage value, should be charged to expense.

  3. An enterprise should consider a number of indicators that demonstrate an enterprise is making sufficient progress in assessing the reserves and economic and operating viability of the project. The Board asked the staff to include an additional indicator related to the existence of transportation and other infrastructure that is either subject to active negotiations or solely pending capacity availability.

The Board directed the staff to develop additional disclosure requirements for discussion at a future Board meeting including disclosures of (1) the amount of capitalized exploratory well costs, (2) a roll forward of the net changes from period to period in the capitalized costs, and (3) the amount of costs that have been capitalized for a period greater than one year after the completion of drilling and the amount of projects for which those costs relate. The Board also will discuss potential transition alternatives at a future meeting.


The following is a list of open meetings tentatively scheduled through February. All meetings are held in Norwalk, Connecticut, unless otherwise noted. 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 2, 2005—FASB Board Meeting
Wednesday, February 2, 2005—FASB Education Session
Wednesday, February 9, 2005—FASB Board Meeting
Wednesday, February 9, 2005—FASB Education Session
Wednesday, February 16, 2005—FASB Board Meeting
Wednesday, February 16, 2005—FASB Education Session
Wednesday, February 23, 2005—FASB Board Meeting
Wednesday, February 23, 2005—FASB Education Session