SUMMARY OF BOARD DECISIONS
Summary of Board decisions 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 an Accounting Standards Update.
May 4, 2011 FASB Board Meeting It is a debt
instrument held or issued with all of the following characteristics:
for financial instruments. The Board discussed the characteristics
of the instrument criterion for classifying and measuring financial instruments.
The Board decided that a financial instrument that does not meet the following
criterion would be measured at fair value with all changes in fair value
recognized in net income:
instrument that meets the criterion above would then be classified and measured
on the basis of an entity’s business strategy, as defined at previous meetings.
The Board noted that trade receivables and payables would generally meet the
- It is not a financial derivative instrument subject to the guidance in
Topic 815, Derivatives and Hedging.
- There is an amount transferred to the debtor (issuer) at inception that
will be returned to the creditor (investor) at maturity or other settlement,
which is the principal amount of the contract adjusted by any discount or
premium at acquisition.
- The debt instrument cannot contractually be prepaid or otherwise settled
in such a way that the investor would not recover substantially all of its
initial investment, other than through its own choice.
The Board also discussed the classification and
measurement of convertible debt instruments from the issuer’s perspective that
qualify for the exception in paragraph 815-10-15-74(a) and do not require
separation under paragraph 470-20-25-12. The Board decided that those
convertible debt instruments should be measured at amortized cost in their
entirety. This decision would not affect the classification and measurement of
convertible debt instruments that require bifurcation under current U.S. GAAP.