Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

Wednesday, November 1, 2017 FASB Board Meeting

Insurance: targeted improvements to the accounting for long-duration contracts. The Board redeliberated the amendments in the proposed Accounting Standards Update, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. The topics were presentation, disclosures, and market risk benefits.

The Board decided the following:


  1. Market risk benefits should be presented separately in the statement of financial position, and changes in fair value should be presented separately in the statement of operations, except for changes in instrument-specific credit risk, which should be presented separately in other comprehensive income
  2. The adjustment relating to updating the liability for future policy benefit measurement assumptions should be presented separately in the statement of operations.
  1. The following additional disclosures should be required:
        a.Information about gross premiums
        b.Information about techniques used to determine unobservable rates
        c.Premium deficiency testing methodology and results.
  2. The following proposed disclosures should be removed:
        a. Information about objectives, policies, and processes for managing
            risks, including information about hedging activity
        b.Ranges and weighted averages of inputs or assumptions (other than
            discount rates) used in liability measurement
        c. Weighted-average rates earned from the investment of policyholders’
            account balance deposits
        d. Information used to conclude that no additional liability should be
            recognized for universal life-type contracts.
  3. To affirm all other proposed disclosures.
  4. The proposed frequency of the following disclosure requirements should be reduced to at least annually:
        a. Information about assumptions, changes in assumptions, and the
            effect of those changes
        b. The nature of capitalized costs
        c. The entity’s accounting policy for sales inducements.
  5. The proposed transition disclosure requirements should be replaced. An entity should be required to disclose:
        a. A rollforward of the pre-adoption transition date balances to
            post-adoption transition date balances
        b. Qualitative and quantitative information about the effect of transition
Next Steps

The Board will discuss the effective date at a future meeting. Also, the staff will perform additional outreach to gather feedback on the recent changes to the disclosure requirements.

Disclosure framework—Board’s decision process. The Board discussed issues related to the proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements.

The Board decided the following:
  1. The Concepts Statement would retain Appendix A,Decision Questions to Be Considered in Establishing Disclosure Requirements, with additional introductory language.
  2. Information about the potential effects of changes in (a) general economic conditions or market factors or (b) entity- or sector-specific factors on a line item should be removed from the chapter as disclosures that the Board should consider in establishing disclosure requirements.
  3. Future-oriented information is acceptable for disclosure when it is information about estimates and assumptions used as inputs to measurements; it is not acceptable when it is information about the effect of specified future changes in existing conditions on specific line items.
  4. The discussion of information about existing plans and strategies should be limited to those that affect recognition and measurement.
  5. The Concepts Statement would retain the concepts on interim disclosures.
  6. Information about past events and current conditions and circumstances that can affect an entity’s cash flows and information about the reporting entity are suitable for notes.
  7. The discussion of the assessment of cost should not be expanded.
  8. The concepts on the notes to financial statements, subject to decisions made in redeliberations, are substantially complete.
Next Steps

The staff will draft the chapter and distribute that draft for external review. Following external review, the staff will bring back any additional issues. Also, the staff plans to redeliberate issues on materiality at a future meeting.

Codification improvements—elimination of U.S. steamship entities (Topic 995). The Board redeliberated the amendments in the proposed Accounting Standards Update, Technical Corrections and Improvements to Topic 995, U.S. Steamship Entities: Elimination of Topic 995. The Board made the following decisions.

Elimination of Topic 995

The Board affirmed its decision to supersede Topic 995, U.S. Steamship Entities.

Effective Date

The Board decided that the effective date will be for annual and first interim periods beginning after December 15, 2018, for all entities.

Transition Guidance

The Board decided that the amendments in the Update should be applied on a modified retrospective basis. Additionally, entities should disclose the amounts and types of temporary differences for which a deferred tax liability had not been previously recognized. The Board decided that early adoption is permitted for all entities, including adoption in an interim period.

Next Steps

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