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 8, 2009 Board Meeting

Measuring liabilities under Statement 157. The Board discussed the feedback received on proposed FSP FAS 157-f, Measuring Liabilities under FASB Statement No. 157. (See the meeting handout for the comment letter analysis.) The Board made the following decisions:

1. The Board decided to clarify that at initial recognition of the liability at fair value, the reporting entity should not adjust the price of the liability when traded as an asset for circumstances in which the asset includes a restriction preventing its transfer.
   
   
2. The Board decided to clarify that after initial recognition of the liability at fair value, changes in fair value of an asset due to changes in a restriction preventing the transfer of the asset should be considered when measuring the fair value of the liability.
   
   
3. The Board affirmed its decisions about liability restrictions, changes in the liability restrictions, principal market, and bid/ask spread.
   
   
4. The Board decided to clarify the need to consider the principles of FASB Statement No. 157, Fair Value Measurements, when using an entry price technique.
   
   
5. The Board decided that guidance on determining an appropriate market risk premium for an asset retirement obligation under FASB Statement No.143, Accounting for Asset Retirement Obligations, is outside the scope of the final Accounting Standards Update.
   
   

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

Applicability of Interpretation 48 for private entities. The Board discussed the feedback received on proposed FSP FIN 48-d, Application Guidance for Pass-through Entities and Tax-Exempt Not-for-Profit Entities and Disclosure Modifications for Nonpublic Entities, and made the following decisions:

1. The Board affirmed that nonpublic entities and public tax-exempt not-for-profit entities are required to apply the standards of accounting for uncertain tax positions.

2. The Board affirmed its decision not to provide a definition of an income tax.

3. The Board decided not to address the interaction of the proposed guidance with EITF Issue No. 95-9, “Accounting for Tax Effects of Dividends in France in Accordance with FASB Statement No. 109.”

4. The Board decided that nonpublic entities would not be required to disclose the following:
   
   
   1. The total unrecognized tax benefits at the balance sheet dates when the disclosure requirements of paragraph 21(a) of Interpretation 48 are not presented
   2. The fact that the change in accounting for uncertain tax positions had no material effect on the entity’s financial statements.
      
      
5. The Board decided that nonpublic entities would be required to disclose the following:
   
   
   1. The total amount of interest and penalties recognized in the statement of operations
   2. The nature of uncertainties and events that are reasonably possible of occurring in the next 12 months that would cause a significant change in the amounts of unrecognized tax benefits
   3. A description of tax years that remain subject to examination by major jurisdiction.
      
      
6. The Board decided to modify paragraph 26(a) of the proposed FSP to replace the term credit with similar wording to avoid misinterpretation of the guidance.
   
7. The Board decided to clarify that references in the standards to pass-through entities include other entities taxed in a manner similar to pass-through entities, such as real estate investment trusts and registered investment companies.
   
   
8. The Board decided that the final Accounting Standards Update will be effective for periods ending after September 15, 2009.

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

Agenda decision: disclosure framework. The FASB chairman announced the addition of a new agenda project aimed at establishing an overarching framework intended to make financial statement disclosures more effective, coordinated, and less redundant. The project was added in response to requests and recommendations received from several constituents, including the Investors Technical Advisory Committee (ITAC) and the SEC Advisory Committee on Improvements to Financial Reporting (CIFR). The project objective is not intended to be “additive.” Rather, it will focus on developing a framework for improved GAAP disclosures. The Board expects to issue a Discussion Paper on preliminary views in the first half of 2010.