Action Alert No. 08-42
October 16, 2008


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

Monday, October 20, 2008, 10:30 a.m.

  1. Conceptual framework: elements and recognition (estimated 90-minute discussion). The Boards will consider how they might improve the clarity of the proposed definition of an asset and of a liability, making it more understandable to the Boards’ constituents.

  2. Consolidations (estimated 2-hour discussion). The staff will present an overview of the main similarities and differences between the proposed FASB Statement, Amendments to FASB Interpretation No. 46(R), and the proposed new IFRS on consolidation. The Boards will consider how to conduct the projects jointly.

  3. Derecognition (estimated 90-minute discussion). The staff will provide an overview of potential derecognition models. The Boards will consider how this project can be conducted jointly.

  4. Fair value measurement (estimated 45-minute discussion). The staff will provide an update on the IASB’s fair value measurement project, noting any differences between the IASB’s tentative decisions to date and FASB Statement No. 157, Fair Value Measurements, and any potential opportunities to clarify the guidance in Statement 157. The staff also will provide an update on the IASB Expert Advisory Panel activities.

Tuesday, October 21, 2008, 9:00 a.m.

  1. Financial instruments with characteristics of equity (estimated 90-minute discussion). The Boards will discuss which approach for distinguishing equity instruments from other financial instruments to use as a starting point for future deliberations.

  2. Financial instruments: complexity (estimated 1-hour discussion). The staff will present a summary analysis of the comment letters received on the Discussion Paper, Reducing Complexity in Reporting Financial Instruments, as well as on the FASB Exposure Draft, Accounting for Hedging Activities.

  3. Emissions trading schemes (estimated 1-hour discussion). The Boards will begin considering the main accounting issues at inception of emissions-related cap and trade and baseline and credit schemes. The staff will present different views on how to address those issues. The discussion is informational, and no Board decisions are expected.

  4. Liabilities (estimated 90-minute discussion). The Boards will discuss the initial recognition of liabilities with uncertainties (other than litigation), with a particular focus on the use of threshold or probability weighted amounts. The staff also will discuss IASB plans for and timing of IAS 37 redeliberations relating to contingencies arising from litigation.


Wednesday, October 22, 2008, 9:00 a.m.

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.


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 8, 2008 Board Meeting

Mergers and acquisitions by a not-for-profit organization. The Board continued its September 24, 2008 discussion on whether to retain or modify the proposed requirements for (1) initial recognition and measurement of acquisitions by not-for-profit organizations and (2) subsequent accounting for any goodwill recognized as a result of the acquisition.

Initial recognition and measurement—The Board decided that when a not-for-profit organization acquires an organization, business, or nonprofit activity that is expected to be predominantly supported by contributions and returns on investments and the amount for the liabilities assumed (and any consideration paid) exceeds the assets acquired, that excess amount should be recognized as a separate charge in the statement of activities rather than as goodwill. In other circumstances, that excess amount should be recognized as goodwill.

The Board also decided that if the amount of the assets acquired exceeds the liabilities assumed (and any consideration paid), the provisions of the final Statement should not require a distinction as to whether the transaction is a contribution received or bargain purchase.

In addition, the Board affirmed its decision that a noncontrolling interest in an acquiree should be measured at fair value on the date of acquisition.

Subsequent accounting for goodwill—The Board decided that a not-for-profit organization that recognizes acquired goodwill as an asset should subsequently account for it following the guidance in FASB Statement No. 142, Goodwill and Other Intangible Assets.

At a future meeting, the Board plans to discuss disclosures pertaining to mergers and acquisitions, the transition guidance and effective date of the final Statement, and other issues that may arise during drafting.

October 10, 2008 Board Meeting

Determining fair value in a market that is not active. The Board discussed the comments received on proposed FSP FAS 157-d, Determining the Fair Value of a Financial Asset in a Market That Is Not Active, which would clarify the application of FASB Statement No. 157, Fair Value Measurements. The Board affirmed its decision to limit the scope of the FSP to financial assets. The Board also affirmed that the final FSP will be effective upon issuance. Prior periods for financial statements that have not been issued would comply with the guidance in the final FSP.

Based on the comments received, the Board also decided to make the following clarifications to the FSP:

  1. Clarify that when distinguishing between an active market and an inactive market, practitioners should (a) look to the market for a particular asset or class of assets being measured rather than the overall market and (b) consider the factors that characterize an inactive market, such as a decline in the volume and level of activity, prices that are not current, and prices that vary substantially

  2. Include a discussion about disorderly markets and the distinction between distressed markets and distressed transactions

  3. Emphasize that significant judgment is needed when determining if a particular transaction is an indicator of fair value

  4. Clarify that the use of contractual cash flows using the discount rate adjustment valuation technique in the example would not change the application of EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets," when determining whether a particular instrument is subject to other-than-temporary impairment.

The Board directed the staff to proceed with a draft of a final FSP for vote by written ballot.


The following documents are available on the FASB website:

Final FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (October 10, 2008).

Discussion Paper, Preliminary Views on Financial Statement Presentation (October 16, 2008). Comments are requested by April 14, 2009.


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.

Wednesday, October 29, 2008—FASB Board Meeting
Wednesday, October 29, 2008—FASB Education Session
Wednesday, November 5, 2008—FASB Board Meeting
Wednesday, November 5, 2008—FASB Education Session
Tuesday, November 11, 2008—Investors Technical Advisory Committee Meeting
Wednesday, November 12, 2008—FASB Board Meeting
Thursday, November 13, 2008—Emerging Issues Task Force Meeting
Wednesday, November 19, 2008—FASB Board Meeting
Wednesday, November 19, 2008—FASB Education Session
Tuesday, November 25, 2008—FASB Board Meeting
Tuesday, November 25, 2008—FASB Education Session
Wednesday, December 3, 2008—FASB Board Meeting
Wednesday, December 3, 2008—FASB Education Session
Wednesday, December 10, 2008—FASB Board Meeting
Wednesday, December 10, 2008—FASB Education Session
Friday, December 12, 2008—Small Business Advisory Committee Meeting
Monday, December 15, 2008—Financial Accounting Standards Advisory Council Meeting
Wednesday, December 17, 2008—FASB Board Meeting
Wednesday, December 17, 2008—FASB Education Session
Tuesday, December 23, 2008—FASB Board Meeting
Tuesday, December 23, 2008—FASB Education Session