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 a final standard.

February 26, 2009 Board Meeting

Mergers and acquisitions by a not-for-profit organization. The Board discussed certain issues that arose during the drafting of the final Statement on not-for-profit entity mergers and acquisitions.

The Board decided that the final Statement will include guidance clarifying the following:

  1. At the merger date, a newly merged entity must carry forward the merging entities’ classifications and designations of their assets and liabilities as necessary to subsequently apply other GAAP unless:

    1. The merger results in a modification of a contract in a manner that would change those previous classifications or designations.

    2. Reclassifications are necessary to conform the accounting policies of the merging entities.

  2. At the merger date, a newly merged entity may not elect the fair value option for a financial asset or financial liability under FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities.

  3. A not-for-profit acquirer within the scope of the AICPA Audit and Accounting Guide, Health Care, should present a charge in its statement of activities for goodwill not recognized as an asset within the performance indicator.

The Board also decided to (1) revise the transition provision for previously recognized goodwill to eliminate the need to apply the support test at a reporting unit level when assessing whether an acquiree is expected to be predominantly supported by contributions and returns on investments, (2) clarify the accounting for previously recognized intangible assets other than goodwill acquired in a purchase accounted for under APB Opinion No. 16, Business Combinations, (3) include guidance about the meaning of predominantly in the standard section rather than the basis for conclusions, and (4) incorporate the decisions made by the Board during redeliberations of proposed FSP FAS 141(R)-a, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies.