Action Alert No. 07-44
November 1, 2007


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

Wednesday, November 7, 2007, 9:30 a.m.

The Board meeting will begin at 9:30 a.m. instead of 9:00 a.m.

  1. Agenda decision: deferral of the effective date of Interpretation 48 for nonpublic entities (estimated 45-minute discussion). The Board will discuss whether to add a project to its agenda to defer the effective date of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, for nonpublic entities and whether guidance should be issued for pass-through entities.

  2. Statement 133 hedging (estimated 90-minute discussion). The Board will discuss a fair value hedging approach to accounting for hedging activities in the context of cash flow hedges.

  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, November 7, 2007, 8:00 a.m.
Wednesday, November 7, 2007, following the Board meeting

The Board will hold educational, non-decision-making sessions 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 sessions.


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, FSP, or Statement 133 Implementation Issue.

October 22, 2007 Joint FASB and IASB Board Meeting

Financial statement presentation. The Boards discussed the proposed content and style of the discussion paper outlining their preliminary views. Board members had questions on aspects of the draft outline but generally agreed with the staff’s proposal. The Boards also agreed with the list of remaining issues that the staff plans to discuss with the Boards in the coming months. On the basis of that timetable, the Preliminary Views would be published in the second quarter of 2008.

Conceptual framework: objectives and qualitative characteristics. The Boards tentatively decided that the forthcoming Exposure Draft on the objective of financial reporting and the qualitative characteristics of decision-useful information will have a comment period of 120 days.

Conceptual framework: elements and recognition. The Boards resumed their discussion of a working definition of an asset and tentatively decided:

    An asset of an entity is a present economic resource to which, through an enforceable right or other means, the entity has access or can limit the access of others.

Amplifying text accompanying the asset definition will describe economic resource, enforceable right, and other means.

Revenue recognition. In 2002, the Boards launched their joint project on revenue recognition. The objective of the project is to develop a single coherent asset and liability model for revenue recognition. In such a model, revenue is a function of changes in assets and liabilities and is not based on the notions of realization and the completion of an earnings process.

Throughout 2002–2006, the Boards explored a model in which the assets and liabilities would be measured at fair value (a fair value model) and a model in which the assets and liabilities would be measured by reference to the customer consideration (an allocated customer consideration model).

In October 2006, the Boards decided that instead of trying to forge a single, compromise model at this stage in the project, they should aim to get a better and more complete understanding about what both models would look like and what each would entail. They also decided that an initial due process document should explain and illustrate the two models and that this would form a basis for seeking comments from interested parties.

Therefore, over the past year, the staff and two groups of Board advocates (each drawn from both Boards) have developed two revenue recognition models. At this meeting, the staff provided a summary of each of the models together with some examples. (The summaries and the examples were included in the handout for this meeting, available on the FASB website.)

The discussion was primarily informational and no technical decisions were reached. Board members commented on aspects of the models that they wanted to see explained more fully in subsequent meetings.

October 23, 2007 Joint FASB and IASB Board Meeting

Accounting principles for derecognizing financial assets. The Memorandum of Understanding states that the Boards expect to have published by 2008 a due process document based on the results of staff research on derecognition. The objective of this meeting was to educate the Boards on how the research has been conducted and to present the staff’s core conclusions on principles for derecognizing financial assets measured at fair value.

The Boards

  1. Directed the staff to report back on two alternative views of when financial assets expected to settle financial liabilities should be presented together in the financial statements (“linked presentation”)

  2. Advised the staff to incorporate in the research report on derecognition a chapter that identifies potential issues that will need to be considered when the scope of research is extended beyond financial instruments

  3. Indicated that the proposed derecognition principle was appealing and that they intend to maintain momentum in discussions with the objective of moving toward a common set of derecognition principles.


The following is a list of open meetings tentatively scheduled through December. 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.

Tuesday, November 13, 2007—Investors Technical Advisory Committee Meeting
Wednesday, November 14, 2007—FASB Board Meeting
Wednesday, November 14, 2007—FASB Education Session
Friday, November 16, 2007—Liaison Meeting with Chartered Financial Analysts Institute
Wednesday, November 21, 2007—FASB Board Meeting
Wednesday, November 21, 2007—FASB Education Session
Wednesday, November 28, 2007—FASB Board Meeting
Thursday, November 29, 2007—Emerging Issues Task Force Meeting
Wednesday, December 5, 2007—FASB Board Meeting
Wednesday, December 5, 2007—FASB Education Session
Thursday, December 6, 2007—Financial Accounting Standards Advisory Council Meeting
Friday, December 7, 2007—Small Business Advisory Committee Meeting
Wednesday, December 12, 2007—FASB Board Meeting
Wednesday, December 12, 2007—FASB Education Session
Wednesday, December 19, 2007—FASB Board Meeting
Wednesday, December 19, 2007—FASB Education Session