Revised 11/26/07—See below

Action Alert No. 07-47
November 21, 2007


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

No Board meetings are planned for the week of November 26, 2007. The next scheduled Board meeting is Wednesday, December 5, 2007, and will be announced in next week's issue of Action Alert.


Wednesday, November 28, 2007, 9:30 a.m. [Revised 11/26/07—The start time and the order of topics have been revised.]

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 sessions.

(This meeting is available by audio webcast and telephone.)

Thursday, November 29, 2007, 9:00 a.m. - 3:30 p.m.

The Task Force plans to discuss all of the following issues in the order shown:

  1. Issue No. 07-4, "Application of the Two-Class Method under FASB Statement No. 128, Earnings per Share, to Master Limited Partnerships"

  2. Issue No. 07-6, "Accounting for the Sale of Real Estate Subject to the Requirements of FASB Statement No. 66, Accounting for Sales of Real Estate, When the Agreement Includes a Buy-Sell Clause"

  3. Issue No. 07-5, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock"

  4. Issue No. 07-1, "Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property."


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.

November 14, 2007 Board Meeting

Financial statement presentation. The Board agreed to modify the information to be disaggregated in the reconciliation schedule (that is, a reconciliation of the statement of cash flows to the statement of comprehensive income) so as to reach a converged view with the IASB for purposes of the preliminary views document. The Board agreed to combine the presentation of contractual accruals and other changes that are not remeasurements. Under the converged view an entity would, at a minimum, disaggregate the difference between cash flows and amounts reported in comprehensive income into four components:

  1. Cash flows not affecting income
  2. Accruals and systematic allocations
  3. Recurring valuation changes
  4. Remeasurements other than recurring valuation changes.

The Board confirmed that the reconciliation schedule should include disclosure of unusual or infrequent events or transactions.

The Board discussed the totals and subtotals that should be required in the financial statements and reached the following decisions:

  1. A total should be presented for each section (business, discontinued operations, financing, equity, income taxes, and other comprehensive income) and category within those sections (operating assets and liabilities, investing, financing assets, and financing liabilities) in each of the financial statements. Other totals and subtotals may be presented when such presentation is relevant to understanding an entity's financial position and changes in that financial position.
  2. Totals for subcategories should not be required, but the items in those subcategories should be clearly distinguished. For example, short-term items should be clearly distinguished from long-term items in a classified statement of financial position.

The Board also decided that the categories and sections should be presented in the same order in each of the financial statements; however, that order would not be prescribed.

Agenda requests: Effective date of Statement 157 and certain Statement 157 implementation issues. The Board discussed three issues related to the implementation of Statement 157, Fair Value Measurements, and decided the following:

  1. The Board decided not to add a project to its agenda to issue an FSP that would provide guidance related to determining the unit of valuation and the exit market concepts in FASB Statement No. 157.
  2. The Board decided to issue an FSP to provide guidance that would clarify the principles in Statement 157 on the measurement of liabilities.
  3. The Board affirmed that the disclosures in paragraph 32 of Statement 157 are not required for plan assets of a pension or other postretirement benefit plan in the financial statements of the plan sponsor. However, the Board decided to add a short-term project to its agenda to expand the disclosures about plan assets under FASB Statement No. 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits.

The Board also decided to add a project to its agenda to issue an FSP that would defer the effective date of Statement 157 for one year for all nonfinancial assets and nonfinancial liabilities, except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Board directed the staff to proceed to a draft for vote by written ballot with a 30-day comment period.

Statement 140 implementation—repurchase financing agreements. The Board discussed significant issues raised by respondents to the proposed FSP FAS 140-d, Accounting for Transfers of Financial Assets and Repurchase Financing Transactions. The Board agreed to limit the scope to initial transfers and repurchase financing transactions that occur contemporaneously or in contemplation of one another and to retain the rebuttable presumption approach when evaluating the linkage criteria. The Board decided to solicit input from an external resource group about the feasibility and operationality of these revisions before finalizing the FSP. The Board decided to:

  1. Modify the implied commitment criterion to clarify the principle.
  2. Modify the recourse criterion to clarify the principle.
  3. Change the marketability criterion to refer to assets that are "readily obtainable" in the marketplace instead of financial assets with quoted prices in active markets.
  4. Expand the marketability criterion to consider other transactions that were contemplated with the initial transfer and repurchase financing.
  5. Delay the effective date by one year to fiscal years beginning after November 15, 2008.
  6. Reaffirm that the guidance should be applied using a limited form of retrospective application.
  7. Provide an exception that derecognition of a held-to-maturity security that results from the adoption of the FSP should not be considered a tainting event under FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities.


Proposed FSP SOP 07-1-a, "Effective Date of AICPA Statement of Position 07-1," was issued on November 16, 2007, and is available on the FASB website. Comments are requested by December 17, 2007.


The following is a list of open meetings tentatively scheduled through January. 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, 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
Friday, January 4, 2008—FASB Board Meeting (tentative)
Friday, January 4, 2008—FASB Education Session
Wednesday, January 9, 2008—FASB Board Meeting
Wednesday, January 9, 2008—FASB Education Session
Wednesday, January 16, 2008—FASB Board Meeting
Wednesday, January 16, 2008—FASB Education Session
Wednesday, January 23, 2008—FASB Board Meeting
Wednesday, January 23, 2008—FASB Education Session
Friday, January 25, 2008—Liaison Meeting with National
    Association of Real Estate Investment Trusts
Wednesday, January 30, 2008—FASB Board Meeting
Wednesday, January 30, 2008—FASB Education Session