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.
October 31, 2012 FASB Board Meeting
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
.Transition Guidance and
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
The Board decided that upon transition an entity would
disclose the following:
- The nature and reason for the change in accounting principle, including an
explanation of the newly adopted accounting principle.
- The method of applying the adoption.
- 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.
- 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.
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
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
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
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
The Board discussed the scope of Update 2011-11 and
tentatively decided that:
- The scope of the proposed Update would be limited to derivatives,
repurchase agreements and reverse repurchase agreements, and securities
lending and securities borrowing arrangements.
- 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.
- 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.