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.

October 31, 2012 FASB Board Meeting

Accounting for financial instruments: impairment. The Board discussed the remaining issues related to the Current Expected Credit Loss model. The Board decided that the proposed Update, taken as a whole, would reduce financial reporting complexity relating to the measurement of expected credit losses. The Board also decided that the comment letter period for the proposed Update would be the later of (1) 120 days from the exposure date of the proposed Update or (2) April 30, 2013.

The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot.

Accounting for financial instruments: classification and measurement.

Transition Guidance and Disclosures

The Board decided that an entity would apply the tentative model to all outstanding instruments as of the effective date and record a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first reporting period in which the guidance is effective.

The Board decided that upon transition an entity would disclose the following:

  1. The nature and reason for the change in accounting principle, including an explanation of the newly adopted accounting principle.
  2. The method of applying the adoption.
  3. The effect of the adoption on any line item in the statement of financial position, if material, as of the beginning of the first period for which the guidance is effective. Presentation of the effect on financial statement subtotals is not required.
  4. The cumulative effect of the change on retained earnings or other components of equity in the statement of financial position as of the beginning of the first reporting period in which the guidance is effective.
Early Adoption

The Board decided not to permit early adoption of the tentative model, except for the requirement to present separately in other comprehensive income the changes in fair value that result from a change in a reporting entity's own credit risk for financial liabilities that are designated under the proposed fair value option and thus measured at fair value through net income (FVNI). Specifically, an entity would be permitted to early adopt this separate presentation requirement for only those hybrid financial liabilities that would continue to qualify and be measured at FVNI under the tentative model as if the entity had early adopted the proposed conditional fair value option requirement, which permits an entity to measure the hybrid financial liability at FVNI in order to avoid bifurcation and separate accounting for an embedded derivative feature. The Board decided to include a question in the Exposure Draft asking for feedback on this proposal.


The Board decided to reexpose the tentative model for public comment. The comment period for the Exposure Draft will be determined at a future meeting.

Effective Date

The Board will discuss the effective date during final deliberations on the tentative model after considering the feedback received on the Exposure Draft. However, the Board decided to include a question for nonpublic stakeholders in the Exposure Draft to seek feedback on a delayed effective date for nonpublic financial and nonpublic nonfinancial entities beyond what will be required of public entities.

Balance sheet offsetting—a scope clarification of ASU No. 2011-11 The chairman announced that a project was added to the Board's agenda to address implementation issues related to the scope of Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210):  Disclosures about Offsetting Assets and Liabilities. The Board discussed the scope of Update 2011-11 and tentatively decided that:
  1. The scope of the proposed Update would be limited to derivatives, repurchase agreements and reverse repurchase agreements, and securities lending and securities borrowing arrangements.
  2. Entities would be required to provide the disclosure requirements, for all periods presented, in annual and interim reporting periods beginning on or after January 1, 2013, consistent with Update 2011-11.
  3. The proposed Update will have a 25-day comment period.
The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot.