Revised 08/14/06—See below

Action Alert No. 06-32
August 10, 2006

NOTICE OF MEETINGS

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

Wednesday, August 16, 2006, 9:00 a.m.

  1. Financial instruments: liabilities and equity (estimated 30-minute discussion). The Board will discuss the financial statement location and display for recognizing equity derivative gains and losses occurring under a narrow view of equity approach.

  2. Fair value options (estimated 60-minute discussion). The Board will begin redeliberating the proposed guidance in the FASB Exposure Draft, The Fair Value Option for Financial Assets and Financial Liabilities, and discuss issues relating to the scope of the Exposure Draft.

  3. Statement 133 implementation: hedging foreign exchange risk for a forecasted foreign-currency-denominated debt issuance (estimated 30-minute discussion). The Board will discuss potential implementation guidance relating to paragraph 29(c) of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, with respect to whether the proceeds from a forecasted issuance of debt denominated in a currency other than the reporting entity’s functional currency are eligible for designation as a hedged transaction in a cash flow hedge.

  4. [Revised 8/14/06] Fair value measurements (estimated 15-minute discussion). The Board will discuss issues relating to the scope of the draft of the final Statement on fair value measurements and the timing of issuance of that Statement.

  5. 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, August 16, 2006, 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.

BOARD ACTIONS

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.

August 2, 2006 Board Meeting

Postretirement benefit obligations, including pensions. The Board continued redeliberations of its March 2006 Exposure Draft, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.

The Board made the following decisions related to disclosures:

  1. The Board affirmed the proposal in the Exposure Draft, with minor changes, that would require an employer that is a business entity that sponsors one or more defined benefit pension or other postretirement benefit plans to disclose the following in annual financial statements:

    1. The net actuarial gain or loss and the prior service cost or credit recognized in other comprehensive income, separated into amounts initially recognized in other comprehensive income and amounts subsequently recognized as adjustments to other comprehensive income, including any transition asset or transition obligation remaining from the initial adoption of FASB Statements No. 87, Employers’ Accounting for Pensions, and No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, as those amounts are recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of Statements 87 and 106

    2. The amount of net actuarial gain or loss, prior service cost or credit, and transition asset or transition obligation included in accumulated other comprehensive income

    3. Separately, the estimated portion of the net actuarial gain or loss, prior service cost or credit, and transition asset or transition obligation included in accumulated other comprehensive income that will be recognized as a component of net periodic benefit cost over the fiscal year that follows the most recent statement of financial position presented.

  2. The Board also affirmed the proposal in the Exposure Draft, with minor changes, that would require a not-for-profit employer that sponsors one or more defined benefit pension or other postretirement benefit plans to disclose the following in its annual financial statements:

    1. The net actuarial gain or loss and the prior service cost or credit recognized as separate line items in the statement of activities, separated into amounts arising during the period and amounts reclassified as components of net periodic benefit cost, including any transition asset or transition obligation remaining from the initial adoption of Statements 87 and 106, during the period

    2. The cumulative amount of net actuarial gain or loss, prior service cost or credit, and transition asset or transition obligation that has not yet been reclassified as components of net periodic benefit cost

    3. Separately, the estimated portion of the cumulative net actuarial gain or loss, prior service cost or credit, and transition asset or transition obligation that has not yet been reclassified as a component of net periodic benefit cost but will be reclassified over the fiscal year that follows the most recent statement of financial position presented.

  3. The Board made the following decisions regarding specific disclosures that would be required by plan sponsors in the period the provisions of a final Statement are adopted.

    1. To require disclosure of the effects of the change in accounting with respect to recognizing the funded statuses of defined benefit postretirement plans in the fiscal period the final Statement is adopted. This will be a tabular disclosure that will detail the effects of the change on individual line items in the statement of financial position.

    2. To require disclosure of the effects of the change in accounting related to the requirement to measure plan assets and benefit obligations as of the date of the employer’s statement of financial position. Specifically, an employer that is a business entity would report the effect on retained earnings and other comprehensive income as separate line items in the statement of changes in shareholders' equity. A not-for-profit employer would report the effect on unrestricted net assets as a separate line item, outside of any performance indicator or other intermediate measure of operations, in the statement of activities.

    3. Not to require compliance with other disclosure requirements in FASB Statement No. 154, Accounting Changes and Error Corrections.

    4. Not to require pro forma disclosure of the effect of the recognition provisions on the employer’s statement of financial position for the fiscal year-end preceding the fiscal year of adoption.

    5. To require that a nonpublic entity, as defined in the final Statement, must disclose in any financial statements issued for fiscal years ending after December 15, 2006, but before implementation of the final Statement, a description of the new standard, the date that adoption is required, and the planned adoption date.

  4. The Board decided not to expand the scope of Phase 1 to include other disclosures suggested by respondents. Those disclosures will be considered in Phase 2 of the project in conjunction with the Board’s fundamental evaluation of employers’ accounting for postretirement benefits.

The Board also decided not to expand the scope of Phase 1 to consider several other suggestions made by respondents. These issues included additional guidance related to the selection of discount rates, the use of estimation, the option of simplified remeasurements during interim periods, and the effect of the Statement on hedging net investments in foreign subsidiaries.

Texas franchise tax. The Board decided not to add a project to its agenda that would provide guidance on whether the recently enacted Texas Franchise Tax is an income tax that should be accounted for in accordance with FASB Statement No. 109, Accounting for Income Taxes.

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through September. 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, August 23, 2006—FASB Board Meeting
Wednesday, August 23, 2006—FASB Education Session
Monday, August 28, 2006—Liaison Meeting with Edison Electric Institute and American Gas Association
Wednesday, August 30, 2006—FASB Board Meeting
Wednesday, August 30, 2006—FASB Education Session
Wednesday, September 6, 2006—FASB Board Meeting
Wednesday, September 6, 2006—FASB Education Session
Wednesday, September 6, 2006—p.m., Emerging Issues Task Force Meeting (canceled)
Thursday, September 7, 2006—Emerging Issues Task Force Meeting
Tuesday, September 12, 2006—Liaison Meeting with the AICPA Accounting Standards Executive Committee
Wednesday, September 13, 2006—FASB Board Meeting
Wednesday, September 13, 2006—FASB Education Session
Tuesday, September 19, 2006—Liaison Meeting with Institute of Management Accountants
Wednesday, September 20, 2006—FASB Board Meeting
Wednesday, September 20, 2006—FASB Education Session
Thursday, September 21, 2006—Financial Accounting Standards Advisory Council Meeting
Wednesday, September 27, 2006—FASB Board Meeting
Wednesday, September 27, 2006—FASB Education Session
Friday, September 29, 2006—Liaison Meeting with the AICPA PCPS Technical Issues Committee