Action Alert No. 08-18
May 1, 2008
NOTICE OF MEETINGS
OPEN BOARD MEETING
meetings are available by audio webcast and telephone.)
Wednesday, May 7, 2008, 9:00 a.m.
framework: elements and recognition (estimated 1-hour
discussion). The Board will discuss (a) how to distinguish between a
liability and a business risk and (b) the principle of a stand-ready
obligation and whether it can be applied to noncontractual situations.
whether instruments granted in share-based payment transactions are
participating securities (estimated 1-hour discussion).
The Board will redeliberate some of the decisions reached at the March
5, 2008 Board meeting on proposed FSP EITF 03-6-a, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, based on issues that arose during
drafting. The Board will discuss consideration of share-based payment
awards not expected to vest, the effective date, and transition.
- 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, May 7, 2008, 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.
OPEN FASB INSURANCE INDUSTRY FORUM
meeting is available by audio webcast and telephone.)
Tuesday, May 6, 2008, 8:30 a.m. – 12:45 p.m.
The Board will meet with representatives of several insurance industry
representational organizations, representatives from the user community
specializing in the insurance industry, and others to discuss
matters of mutual interest such as the FASB Invitation to Comment, An
FASB Agenda Proposal: Accounting for Insurance Contracts by Insurers and
Policyholders, Including the IASB Discussion Paper, Preliminary Views
on Insurance Contracts.
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.
April 21, 2008 FASB/IASB Joint Board Meeting
Understanding. In February 2006, the IASB and the FASB issued a
Memorandum of Understanding (MoU) that described a joint work plan to
expedite global convergence in accounting standards and established a
series of milestones to be reached by 2008.
Most of those milestones have now been reached or are due to be reached
during 2008. As a result, there is little remaining guidance on the
prioritization of projects on the FASB and IASB’s active agenda in the
medium to long term.
A number of jurisdictions have announced their intention to adopt or
converge with IFRSs in the next five years. The chairmen of the IASB and
the FASB agreed that the timeline contained within the existing MoU should
be updated. Doing so will help to direct the work plan of the two Boards
through to at least 2011. The two chairmen asked a small team made up of
representatives from the IASB and the FASB to produce a paper on the
subject for discussion at the joint board meeting.
The two Boards discussed that paper at their joint meeting and accepted
the broad principles recommended in it. The Boards directed the staff to
develop details for consideration in the technical plan update session at
the IASB’s Board meeting in June. It is the intention that an updated work
plan will be published after that meeting.
recognition. In July 2007, as part of the “Proactive Accounting
Activities in Europe” initiative, the European Financial Reporting
Advisory Group (EFRAG), the Deutsche Rechnungslegungs Standards Committee
(DRSC) and the Conseil National de la Comptabilité published a discussion
paper, Revenue Recognition—A European Contribution.*
The paper’s objective was to stimulate debate on revenue recognition in
Europe and to develop European views to be considered by the IASB and the
FASB in their joint project on revenue recognition. Representatives of the
EFRAG and DRSC presented an overview of the discussion paper to the joint
No decisions were made. The overview can be found in the observer notes
for the session.
*The paper is available at http://www.efrag.org/projects/detail.asp?id=55
framework: objectives and qualitative characteristics and reporting
entity. The Boards continued to discuss the implications of
adopting the entity perspective. This issue arose during the drafting of
due process documents for the objective of financial reporting phase
(Phase A) and the reporting entity phase (Phase D) of the framework
project. The Boards affirmed their decision to adopt the entity
perspective, in which the entity’s perspective is used in providing
financial information about the entity’s business to its capital
providers. This is in contrast to the proprietary perspective, in which
the proprietor’s perspective is used in providing information about the
proprietor’s business to the proprietor.
The Boards noted that they have not completed their initial
deliberations in other phases of the framework project, such as defining
the elements of financial statements (in Phase B of the project).
Therefore, fuller implications of the decision to adopt the entity
perspective on other phases will be analyzed in those phases, in due
course, and communicated to constituents at that time. These implications
need not be addressed before finalizing and publishing the Exposure Draft
for Phase A for public comment. An explanation of the decisions reached
and the implications not yet deliberated will be included in the bases for
conclusions in both the Exposure Draft for Phase A and the Discussion
Paper for Phase D.
In addition, the Boards discussed a sweep issue arising from comments
on a draft Discussion Paper on the reporting entity phase relating to
parent-only financial statements. The Boards tentatively agreed that, in
- A parent entity should always present consolidated financial
- The presentation of parent-only financial statements should not be
precluded at the conceptual level, provided that they are included in
the same financial report as the consolidated financial statements.
The Boards also noted that some presentation issues, for example, how
to present information about particular subsidiaries, such as discontinued
operations, will be dealt with at the standards level.
April 22, 2008 FASB/IASB Joint Board Meeting
Meeting of IASB, FASB, and CRUF. The Corporate Reporting Users’
Forum (CRUF) made a presentation at the joint board meeting. Observations
were made on the Boards’ joint agenda, with suggestions for priorities and
topics that the Boards should address. No decisions were made.
FASB and IASB—standard setters’ responses to credit crisis. The
Boards discussed the steps they were taking in response to the credit
crisis. When there are significant business failures, or a loss of
confidence in markets, it is appropriate to examine whether improvements
can be made to the system in which those businesses operate. Just as
securities regulators, banking supervisors, and others have been assessing
their roles in the crisis, it is appropriate that the Boards review the
requirements of IFRS and U.S. GAAP.
The FASB is moving to eliminate the concept of a qualifying
special-purpose entity and amend FASB Interpretation No. 46 (revised
December 2003), Consolidation of Variable Interest Entities, to
place more emphasis on qualitative, and therefore less reliance on
quantitative, factors in assessing control. Part of that project, which
the FASB expects to complete before the end of this year, is a review of
disclosure requirements related to securitizations and off-balance-sheet
The IASB is giving urgency to several areas where it thinks IFRS
financial reporting could be improved—fair value measurement; financial
instruments; consolidations and derecognition; disclosures about
off-balance-sheet items; and disclosures about fair value measurements.
The IASB had already undertaken a significant amount of work on the fair
value measurement and consolidations and derecognition projects prior to
the advent of the current crisis. The exposure draft being developed by
the consolidations project staff will include any enhancements to IFRS 7,
in relation to the disclosure of information about off-balance-sheet risks
and fair value measurement, that the IASB thinks would be helpful.
The Boards agreed that they should work together to align their
disclosure requirements. The Boards also agreed to assess whether the
IASB’s consolidations project could become a joint project.
FASB DOCUMENT AVAILABLE
Final FSP FAS
142-3, Determination of the Useful Life of Intangible
Assets, was issued on April 25, 2008 and is available on the FASB
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
June. 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, May 14, 2008—FASB Board Meeting
Wednesday, May 14,
2008—FASB Education Session
Wednesday, May 21, 2008—FASB Board
Wednesday, May 21, 2008—FASB Education Session
22, 2008—Liaison Meeting with Healthcare Financial Management
Wednesday, May 28, 2008—FASB Education
Wednesday, June 4, 2008—FASB Board Meeting
4, 2008—FASB Education Session
Tuesday, June 10, 2008—Investors
Technical Advisory Committee Meeting
Wednesday, June 11, 2008—FASB
Wednesday, June 11, 2008—FASB Education
Thursday, June 12, 2008—Emerging Issues Task Force
Monday, June 16, 2008—FAF/FASB Forum on High-Quality Global
Accounting Standards: Issues and Implications for U.S. Financial
Reporting, New York City
Wednesday, June 18, 2008—FASB Board
Wednesday, June 18, 2008—FASB Education Session
June 19, 2008—Liaison Meeting with Financial Executives International,
Tuesday, June 24, 2008—Financial Accounting Standards
Advisory Council Meeting
Wednesday, June 25, 2008—FASB Board
Wednesday, June 25, 2008—FASB Education Session
27, 2008—Small Business Advisory Committee