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.

July 1, 2009 Board Meeting

FASB ratification of EITF consensus and consensuses-for-exposure. The Board considered and ratified the following consensus reached at the June 18, 2009 EITF meeting. Entities will be required to apply this new consensus in periods beginning on or after June 15, 2009, for share lending arrangements entered into in those periods. Entities will be required to apply this new consensus on a retroactive basis in periods beginning on or after December 15, 2009, for arrangements outstanding at the beginning of those periods.

Issue No. 09-1 , "Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance"

The Issue applies to an equity-classified share lending arrangement on an entity's own shares when executed in contemplation of a convertible debt offering or other financing. The share lending arrangement is required to be measured at fair value and recognized as an issuance cost associated with the convertible debt offering or other financing. If counterparty default is probable, the share lender is required to recognize an expense equal to the then fair value of the unreturned shares, net of the fair value of probable recoveries.

The Board also considered and ratified the following consensuses-for-exposure for a comment period beginning no later than July 7, 2009, and ending no later than August 14, 2009.

1. Issue No. 08-1 , "Revenue Arrangements with Multiple Deliverables." The consensus-for-exposure would amend EITF Issue No. 00-21, “Revenue Arrangements with Multiple Deliverables.” The most significant changes to Issue 00-21 would be as follows:
   
   
   1. An entity would allocate consideration to each deliverable in the arrangement using the relative selling price method. Use of the residual method would no longer be permitted.
      
   2. Selling prices used in applying the relative selling price method of allocation would be determined using vendor-specific objective evidence or third-party evidence of the selling price. Absent such evidence, the entity would use estimated selling price.

   The consensus-for-exposure also would expand the disclosure requirements for multiple-deliverable revenue arrangements to require an entity to provide both qualitative and quantitative information about the significant judgments made in applying the guidance and subsequent changes in those judgments that may significantly affect the timing or amount of revenue recognition.

2. Issue No. 09-3 , "Applicability of AICPA Statement of Position 97-2 to Certain Arrangements That Include Software Elements." The consensus-for-exposure would apply to multiple-element revenue arrangements that include tangible products and software. The consensus-for-exposure would remove from the scope of SOP 97-2, Software Revenue Recognition, the sale of a tangible product containing software components and nonsoftware components that function together to deliver the product's essential functionality. Issue 08-1 would then be used to allocate revenue to deliverables in an arrangement that includes such products.