Action Alert No. 07-04
January 25, 2007


(Board meetings are available by audio webcast and telephone.)

Tuesday, January 30, 2007, 1:00 p.m.

  1. Financial statement presentation (estimated 45-minute discussion). The Board will discuss principles for disaggregated information in the statement of comprehensive income.

  2. Postretirement benefit obligations, including pensions (estimated 15-minute discussion). The Board will discuss comments received on proposed FSP FAS 158-a, “Conforming Amendments to the Illustrations in FASB Statements No. 87, No. 88, and No. 106 and to the Related Staff Implementation Guides,” and decide whether to issue that proposed FSP as final.

  3. Agenda decision: allowance for losses (estimated 60-minute discussion). The Board will discuss whether to add to its agenda a project on allowance for credit losses related to financing receivables, which includes loans and finance leases pursuant to FASB Statement No. 13, Accounting for Leases.

  4. Agenda decision: implementation of AICPA SOP 05-1 (estimated 30-minute discussion). The Board will discuss issues raised by constituents at the January 8, 2007 roundtable discussion on the implementation of AICPA SOP 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts, and decide whether to add a project on this topic to its agenda.

Wednesday, January 31, 2007, 9:00 a.m.

  1. Convergence—income taxes (estimated 30-minute discussion). The Board will discuss two issues. The Board will first discuss proposed clarifications of a previous decision on the accounting for temporary differences arising from asset acquisitions other than a business combination. The Board will then discuss whether to eliminate the exception to deferred tax recognition for goodwill that is not tax deductible.

  2. Business combinations (estimated 30-minute discussion). The Board will discuss whether to affirm or modify the changes to the accounting for deferred income taxes in a business combination that were proposed in the June 2005 FASB Exposure Draft, Business Combinations.

  3. Statement 133 Implementation Issue—clarification of the application of the shortcut method (estimated 45-minute discussion). The Board will decide whether to issue a proposed Statement 133 Implementation Issue on the clarification of the application of the shortcut method. The proposed Implementation Issue will address several practice issues that have emerged related to the interpretation of certain provisions of paragraph 68 of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. Those issues primarily relate to the following circumstances:

    1. The hedged item has a fair value that is not equal to its par value at the inception of the hedging relationship.

    2. The application of the shortcut method at the trade date when the hedged item is accounted for at the settlement date.

    3. The hedged item is subject to principal pay-downs prior to maturity.

    4. The interpretation and application of paragraph 68(e).

  4. 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.


Wednesday, January 31, 2007, 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.


Thursday, February 1, 2007, 9:00 a.m. – 12:00 p.m. and 1:30 p.m. – 4:30 p.m.

The FASB and IASB will hold roundtable discussions on measurement in conjunction with their joint conceptual framework project.  (Additional roundtables were held in Hong Kong, PRC on January 16 and 17 and will be held in London, UK on January 29, 2007.)

The objective of these roundtables is threefold:

  1. To hear the views of representative IASB and FASB constituents on measurement early in the measurement phase of the conceptual framework project. The discussion around this objective will be unstructured. Any views on measurement that constituents wish to express are welcome.

  2. To discuss whether the list of measurement issues identified in the plan for the measurement phase of the conceptual framework project is appropriate and substantially complete.

  3. To discuss whether the initial inventory of potential measurement bases prepared by the project staff and the terminology associated with that inventory is substantially complete and understandable.

Observers—The roundtables will be open to observation by the press and public and will be audio taped for later listening on the IASB and FASB websites. As space for observers may be limited, those who would like to observe a roundtable session are asked to register by clicking on this observer link.


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, or FSP.

January 17, 2007 Board Meeting

Agenda request—delay of Interpretation 48 effective date. The Board added a project to its agenda to provide implementation guidance for the phrase “the tax matter is ultimately settled through negotiation or litigation” in paragraph 10(b) of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes. The Board asked the staff to develop that implementation guidance for consideration at a future meeting. Also, the Board decided not to delay the effective date of Interpretation 48.

Computational guidance for computing diluted earnings per share under the two-class method. The Board decided to issue a proposed FSP to provide computational guidance for diluted earnings per share (EPS) when applying the two-class method pursuant to FASB Statement No. 128, Earnings per Share. The proposed FSP would provide constituents with guidance on the computation of diluted EPS under the two-class method in situations in which an entity’s capital structure includes common stock, participating securities, and potential common stock.

The Board also decided that:

  1. The guidance in the final FSP should be applied as follows:

    1. The effective date should be the first reporting period beginning after the date the FSP is posted to the FASB website.

    2. All prior-period EPS data presented should be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform to the provisions of the FSP.

  2. The proposed FSP should be exposed for a 60-day comment period.

The Board directed the staff to proceed to draft a proposed FSP for vote by written ballot.


The following is a list of open meetings tentatively scheduled through March. 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.

Monday, February 5, 2007—Liaison Meeting with National Investors Relations Institute
Wednesday, February 7, 2007—FASB Board Meeting
Wednesday, February 7, 2007—FASB Education Session
Tuesday, February 13, 2007—FASB Board Meeting
Tuesday, February 13, 2007—FASB Education Session
Thursday, February 15, 2007—Joint Working Group Meeting on Lease Accounting, London
Wednesday, February 21, 2007—FASB Board Meeting
Wednesday, February 21, 2007—FASB Education Session
Wednesday, February 28, 2007—FASB Board Meeting
Wednesday, February 28, 2007—FASB Education Session
Wednesday, March 7, 2007—FASB Board Meeting
Wednesday, March 7, 2007—FASB Education Session
Wednesday, March 14, 2007—FASB Board Meeting
Wednesday, March 14, 2007—FASB Education Session
Thursday, March 15, 2007—Emerging Issues Task Force Meeting
Tuesday, March 20, 2007—Financial Accounting Standards Advisory Council Meeting
Wednesday, March 21, 2007—FASB Board Meeting
Wednesday, March 21, 2007—FASB Education Session
Tuesday, March 27, 2007—Not-for-Profit Roundtable Meeting
Wednesday, March 28, 2007—FASB Board Meeting
Wednesday, March 28, 2007—FASB Education Session