Action Alert No. 05-09
March 3, 2005


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

  1. Qualifying special-purpose entities and isolation of transferred assets. The Board will continue its discussion of the accounting for transfers of financial assets under FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. The Board is expected to focus on whether to account for a transferor’s interests differently based on whether the original financial assets are transferred to a qualifying special-purpose entity (QSPE) and whether a transferor’s interests should be initially measured at fair value if the transfer does not involve the transfer of the original asset to a QSPE. The Board will discuss how to describe its previous decision that setoff rights of a transferor are not an impediment to isolation of the transferred asset if the transferor explicitly agrees to pay the investor an amount equal to its share of the asset eliminated by setoff. The Board also will discuss whether other types of dilutive rights should be explicitly addressed in the provisions related to setoff. (Estimated 60-minute discussion.)

  2. Agenda decisions. The Board will consider the following:

    1. Contingent environmental liabilities. The Board will discuss whether to add a project to its agenda to reconsider the provisions of FASB Statement No. 5, Accounting for Contingencies, and its related Interpretations, related to the accounting for contingent environmental liabilities. Specifically, the Board will consider whether contingent environmental liabilities that meet the probable threshold in paragraph 8(a) of Statement 5 should be reported at expected value and whether contingent liabilities of a similar nature should be aggregated for purposes of assessing materiality. (Estimated 30-minute discussion.)

    2. Derivative disclosures. The Board will discuss whether to add a project to its agenda to reconsider the disclosure requirements of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. (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, March 9, 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 March 16 and March 23, 2005 Board meetings. Those topics will be posted to the FASB calendar four days prior to the education session.


Tuesday, March 8, 2005, 9:00 a.m.

The New York Helmsley Hotel
212 East 42nd Street
New York, New York

The Board and the User Advisory Council will meet to discuss the following:

  1. Liabilities and equity
  2. Revenue recognition
  3. Managing changes to financial reporting.

Closed to Public Observation

The User Advisory Council will hold a closed session with the Board to discuss administrative matters. The public portion of the meeting is expected to end at approximately 12:00 p.m.


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.

February 23, 2005 Board Meeting

Conceptual Framework. The Board considered the overall plan for the joint project, which calls for the work to be conducted in the following phases:

  1. Objectives of financial reporting and qualitative characteristics of accounting information
  2. Elements of financial statements, recognition and derecognition, and defining measurement attributes
  3. Initial and subsequent measurement
  4. Reporting entity
  5. Presentation and disclosure
  6. Purpose and status
  7. Applicability to the not-for-profit sector.

The Board approved the plan, with the following refinements:

  1. The project seeks to converge the IASB and the FASB frameworks into a unified, complete, and improved framework. To do that efficiently, the work should focus on:
    1. Changes in the environment since the original framework was issued
    2. Omissions or contradictory areas in the original framework.
  2. Work on the reporting entity concept (phase 4) should begin earlier, rather than following the first three phases as proposed by the staff.
  3. Subject matter experts should be identified who can be called upon to provide the Board with advice informally as needed. The Board plans to consult with its Financial Accounting Standards Advisory Council for advice on broad, strategic issues in the project. The Board asked the staff of the IASB and FASB to determine whether the project also should be supported by a joint international working group.

FASB Staff Position (FSP): accounting for waste electrical and electronic equipment. The Board directed the staff to post a proposed FSP on accounting for waste electrical and electronic equipment obligation, to the FASB website for a 45-day public comment period. That proposed FSP will provide accounting guidance on the accounting for obligations associated with Directive 2002/96/EC on Waste Electrical and Electronic Equipment (the “Directive”) issued by the European Union. The Directive was enacted on February 13, 2003 and directs EU-member countries to adopt legislation to regulate the collection, treatment, recovery, and environmentally sound disposal of electrical and electronic waste equipment.


The following is a list of open meetings tentatively scheduled through April. 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, March 16, 2005—FASB Board Meeting
Wednesday, March 16, 2005—FASB Education Session
Thursday, March 17, 2005—Emerging Issues Task Force Meeting
Tuesday, March 22, 2005—Financial Accounting Standards Advisory Council
Wednesday, March 23, 2005—FASB Board Meeting
Wednesday, March 23, 2005—FASB Education Session
Wednesday, March 30, 2005—FASB Board Meeting
Wednesday, March 30, 2005—FASB Education Session
Wednesday, April 6, 2005—FASB Board Meeting
Wednesday, April 6, 2005—FASB Education Session
Wednesday, April 13, 2005—FASB Board Meeting
Wednesday, April 13, 2005—FASB Education Session
Thursday, April 21, 2005—IASB/FASB Joint Board Meeting, London
Friday, April 22, 2005—IASB/FASB Joint Board Meeting, London
Wednesday, April 27, 2005—No FASB Board Meeting
Wednesday, April 27, 2005—FASB Education Session