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.

May 27, 2009 Board Meeting

Improving disclosures about fair value measurements. The Board discussed a proposal that would require additional information about fair value measurements used in financial statements and reached the following tentative decisions:

  1. Level of disaggregation. FASB Statement No. 157, Fair Value Measurements, currently requires separate disclosures for each major category of assets and liabilities, which is often interpreted in current practice to be equivalent to a line item in the statement of financial position. The Board decided that the level of disaggregation generally should be greater than the line items for assets and liabilities in the statement of financial position. Additional guidance on disaggregation will be discussed at a future Board meeting.  

  2. Inputs.  Paragraph 32(e) of Statement 157 requires a discussion of the valuation techniques used to measure fair value. The Board decided to clarify that this discussion should include descriptive disclosures about significant inputs for both Level 2 and Level 3 estimates.

  3. Effect of reasonably possible alternative inputs. For Level 3 estimates, entities should disclose any significant effect of reasonably possible alternative inputs and how the effect was calculated.

  4. Transfers between levels. Entities should disclose any significant transfers between Levels 1, 2, and 3 during the reporting period and the reasons the transfers were made.

The Board directed the staff to undertake field visits to obtain feedback from preparers about the operationality of the proposed disclosures, particularly those relating to the level of disaggregation and the effect of reasonably possible alternative inputs for Level 3 estimates.

The Board’s goal is to issue a final standard that would be effective for annual and interim periods ending after December 15, 2009.