Action Alert No. 08-40
October 2, 2008
NOTICE OF MEETINGS
OPEN BOARD MEETING
(Board
meetings are available by audio webcast and telephone.)
Wednesday, October 8, 2008, 9:00 a.m.
- Mergers and
acquisitions by a not-for-profit organization (estimated
1-hour discussion). The Board will continue its discussion and
decide whether to retain or modify the proposed requirements for (a)
initial recognition and measurement of acquisitions by not-for-profit
organizations and (b) subsequent accounting for any goodwill recognized
as a result of an acquisition.
- Open discussion. If necessary, the Board will allow time to
discuss minor issues with staff members on technical projects or
administrative matters. Those discussions are held following regular
Board meetings as topics come up.
Friday, October 10, 2008, 9:00 a.m.
Determining fair value in a market that is not active
(estimated 1-hour discussion). The Board will discuss comments
received on proposed FSP FAS 157-d, Determining Fair Value in a Market
That Is Not Active, and whether to proceed with issuing the FSP as
final.
OPEN EDUCATION SESSION
Wednesday, October 8, 2008, following the Board meeting
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.
OPEN MEETING OF THE FASB/IASB JOINT WORKING GROUP ON LEASE
ACCOUNTING
Tuesday, October 7, 2008, 9:00 a.m. to 5:00 p.m.
Representative members of the FASB and the IASB will meet with members
of the Joint Working Group on Lease Accounting to discuss a staff draft of
the Discussion Paper.
A copy of the full meeting agenda as well as agenda papers can be found
on the IASB website at http://www.iasb.org/Meetings/Leases+Working+Group+meeting.htm.
The meeting will be audio taped for later listening on the FASB and
IASB websites.
BOARD ACTIONS
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.
September 24, 2008 Board Meeting
Revenue
recognition. The Board discussed subsequent measurement of
performance obligations in contracts with customers. Specifically, the
Board discussed the nature of an onerous test in the customer
consideration approach to measuring performance obligations. The Board
also considered the IASB’s recent discussion on whether remeasurement of
performance obligations is needed in instances other than when a
performance obligation is deemed onerous.
The Board considered two approaches for an onerous test: one based on
the entity’s expected cost of performance and another based on expected
cost plus a margin. It tentatively decided that a performance obligation
is deemed onerous when the entity’s expected cost of performance exceeds
the carrying amount of the performance obligation. In that case, the
entity would remeasure the performance obligation at the amount of its
expected cost to satisfy the performance obligation. The Board noted that
the IASB tentatively decided that some performance obligations would need
to be remeasured at each financial statement date, rather than by
exception when deemed onerous. Performance obligations that may require
remeasurement might include those that are long term and have significant
variability of outcome. Such remeasurement would not affect the total
revenue reported for the contract.
The Discussion Paper to be issued in the fourth quarter of 2008 will
seek constituents’ input on which performance obligations may require
remeasurement at each financial statement date and on alternative
remeasurement approaches for those performance obligations.
Contingency
disclosures. The Board decided on a plan for redeliberations of
its Exposure Draft, Disclosure of Certain Loss Contingencies. The
Board directed the staff to prepare an alternative model that attempts to
address the concerns that certain constituents raised about the Exposure
Draft. This alternative model will be field tested along with the model in
the Exposure Draft. The staff expects that field testing will take place
during November and December 2008, and roundtable meetings will occur in
either early January or March 2009. Board redeliberations are expected to
begin in late March or April 2009. The Board also decided that any final
Statement on this topic will be effective no sooner than for fiscal years
ending after December 15, 2009.
Mergers and
acquisitions by a not-for-profit organization. The Board discussed
whether to require a different method of accounting for a merger of
not-for-profit organizations than that required for an acquisition and, if
so, how it should define a merger and clarify the proposed guidance. The
Board affirmed its prior tentative decision to distinguish between a
merger and an acquisition. The Board also decided to improve the
workability of the definition and its related guidance by:
- Clarifying the scope of the final Statement by explicitly scoping
out formations of joint ventures and making the merger definition more
robust.
- Including a discussion that (a) emphasizes that in a merger no one
party dominates various aspects of the merger transaction and (b)
describes factors that are helpful in discerning a merger from other
combination types.
The Board also directed the staff to develop case-based examples useful
in applying the final Statement.
In addition, the Board also discussed whether to retain or modify the
proposed requirements for (a) initial recognition and measurement of
acquisitions and (b) subsequent accounting for any goodwill recognized as
a result of the acquisition. That discussion will continue at the October
8, 2008 meeting.
Disclosures
about plan assets. The Board redeliberated proposed FSP FAS
132(R)-a, Employers’ Disclosures about Postretirement Benefit Plan
Assets. The Board decided to amend FASB Statement No. 132 (revised
2003), Employers’ Disclosures about Pensions and Other Postretirement
Benefits, to include:
- The entity’s objective in disclosing information about plan assets
is to provide users of financial statements with an understanding of:
- The major categories of assets held in an employer’s plan(s)
- How management makes investment allocation decisions, including
the factors that are pertinent to an investor’s understanding of
investment policies or strategies
- Significant concentrations of risk within plan assets.
- A list of examples of detailed categories of plan assets that would
include a category for investment funds (for example, mutual funds,
hedge funds, and commingled funds).
- A requirement that an entity disclose the significant investment
strategies for investment funds as major categories of plan assets.
The Board agreed that the effective date for the final FSP would be no
earlier than for fiscal years ending after December 15, 2009.
FASB ratification
of EITF consensuses and tentative conclusions. The Board
considered and ratified the consensus reached at the September 10, 2008
EITF meeting on Issue No. 08-5, "Issuer’s Accounting for Liabilities
Measured at Fair Value with a Third-Party Credit Enhancement."
The Board also considered and ratified consensuses-for-exposure reached
at the September 10, 2008 EITF meeting on Issues No. 08-6, "Equity Method
Investment Accounting Considerations," No. 08-7, "Accounting for Defensive
Intangible Assets," and No. 08-8, "Accounting for an Instrument (or an
Embedded Feature) with a Settlement Amount That Is Based on the Stock of
an Entity’s Consolidated Subsidiary."
Agenda
decision announcement: Applicability of FASB Interpretation No. 48 to
private entities. The FASB chairman announced that a project was
added to the Board’s agenda to consider whether a deferral of or any other
modifications to FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes, should be provided for private companies. That agenda
decision was made in response to requests from several constituents,
including the Private Company Financial Reporting Committee (PCFRC).
FUTURE OPEN MEETINGS
The following is a list of open meetings tentatively scheduled through
November. 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 15, 2008—FASB Board Meeting
Wednesday, October
15, 2008—FASB Education Session
Monday, October 20, 2008—FASB/IASB
Joint Board Meeting, Norwalk, CT
Tuesday, October 21, 2008—FASB/IASB
Joint Board Meeting, Norwalk, CT
Wednesday, October 22, 2008—FASB
Education Session
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
Wednesday, November 12, 2008—Emerging
Issues Task Force 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
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