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.
February 9, 2011 FASB Board MeetingInsurance
contracts. The Board discussed how to proceed with this project in
light of the feedback it has received from stakeholders through comment letters
on the FASB Discussion Paper, Preliminary Views on Insurance Contracts,
and related outreach activities.
The Board decided to continue this
project, affirming the objective of developing standards of accounting for
insurance contracts that would improve existing U.S. GAAP and converge with
International Financial Reporting Standards. The Board will pursue those
objectives by deliberating the issues in this project jointly with the
properties. The Board reaffirmed its previous decision that the
investment properties guidance would only apply to entities that meet the five
criteria the Board has previously developed. The Board decided that the business
activities and business purpose criteria should describe the qualifying entities
as those that invest in real estate for total return. The revised criteria
The Board decided to allow an entity with investments in
both property and other types of real estate investments (such as mortgage
receivables or mortgage-back securities) to qualify under the investment
properties guidance. The Board will continue to discuss whether certain real
estate entities owned by a single owner (for example, a pension plan) would
qualify under the investment properties guidance.
- Business Activities. The entity’s substantive activities relate
to investing in real estate.
- Business Purpose. The express business purpose of the entity is
to invest in real estate for total return including an objective to realize
capital appreciation. The entity has potential strategies for realizing
capital appreciation including selling a property to maximize its total
return. The entity’s business purpose is not to hold real estate properties
- Use in the production or supply of goods or services or for
- Rental income only; or
- Sale in the ordinary course of business.
- Unit Ownership. Ownership in the entity is represented by units
of investments, such as shares or partnership interests, to which
proportionate shares of net assets can be attributed.
- Pooling of Funds. The entity has one or more unrelated investors
that hold significant ownership interests in the entity.
- Reporting Entity. The entity can be but does not need to be a
impairment assessments. The Board continued to evaluate alternative
ways of identifying potential goodwill impairments that might be more
cost-effective than the existing fair value approach (step one of the current
two-step impairment assessment process). The Board directed the staff to further
assess, through outreach, the cost-effectiveness of an approach that would use
qualitative factors to assess whether it is more-likely- than-not that goodwill
is impaired. The Board also decided to include public entities within the scope
of this project.