Action Alert No. 06-29
July 20, 2006

NOTICE OF MEETINGS

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

Wednesday, July 26, 2006, 8:00 a.m.

The Board meeting will begin at 8:00 a.m. instead of 9:00 a.m.

  1. Transfers of financial assets (estimated 60-minute discussion). The Board will continue to discuss the accounting for transfers of financial assets under FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. The Board will focus on three open issues related to rollovers of beneficial interests, participating interests, and transferability requirements. In addition, the Board will discuss whether it should address all of the issues related to the permitted activities of a qualifying special-purpose entity together, including the issues on servicer discretion.

  2. Postretirement benefit obligations, including pensions (estimated 75-minute discussion). The Board will continue redeliberations of its March 31, 2006 Exposure Draft, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. Specifically, the Board will discuss (a) whether to require measurement of plan assets and benefit obligations as of the date of the sponsor’s financial statements and (b) the effective date of a final Statement.

  3. Measurement of nonfinancial assets and nonfinancial liabilities in business combinations and impairment evaluations (estimated 60-minute discussion). The Board will discuss practice issues that have arisen with respect to the use of entity-specific assumptions, rather than market-participant assumptions, to measure certain nonfinancial assets and nonfinancial liabilities in business combinations and impairment tests. The Board will address considerations relating to the issuance of a proposed FSP that would permit the use of entity-specific assumptions in certain measurements of nonfinancial assets and nonfinancial liabilities that would otherwise be required to be measured at fair value.

  4. Conceptual framework: elements and recognition (estimated 75-minute discussion). The Board will consider whether a revised working definition of an asset and amplifying text, together with further examples illustrating their application, provide an adequate basis for moving forward with other aspects of this phase of the conceptual framework project.

  5. Revenue recognition (estimated 90-minute discussion). The Board will continue to discuss an approach under which an entity would recognize revenue when it obtains an unconditional right to consideration for performance to date. In particular, the Board will discuss how that approach would be applied to certain revenue contracts.

  6. Amendments to Statement 123(R): technical corrections (estimated 15-minute discussion). The Board will discuss whether to approve the issuance of a proposed FSP to address certain technical corrections of FASB Statement No. 123 (revised 2004), Share-Based Payment. The proposed FSP intends to amend (a) paragraph A240(d)(1) to exempt nonpublic entities from disclosing the aggregate intrinsic value of outstanding fully vested share options (or share units) and share options expected to vest, (b) paragraph A102 of Illustration 4(b) to revise the computation of the minimum compensation cost that must be recognized in the illustration to comply with paragraph 42 of the Statement, and (c) paragraph A170 of Illustration 13(e) to indicate that at the date that the illustrative awards were no longer probable of vesting, any previously recognized compensation cost should be reversed.

  7. 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.

OPEN EDUCATION SESSION

Thursday, July 27, 2006, 9:00 a.m.

The Board will hold an educational, non-decision-making session to discuss topics that are anticipated to be discussed at the August 2, 2006 Board meeting. Those topics will be posted to the FASB calendar four days prior to the education session.

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, or FSP.

July 12, 2006 Board Meeting

Postretirement benefit obligations, including pensions. The Board began redeliberations of its March 2006 Exposure Draft, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, in light of views communicated in respondents’ comment letters and the feedback received at the June 27, 2006, public roundtable. (A summary of the comment letter responses is now available.) The Board discussed the scope and objectives of the project and considered several implementation issues related to retrospective application of the proposed changes. The Board made the following decisions:

  1. The Board affirmed its decision to conduct the project in phases, enabling meaningful, near-term improvements in the financial reporting of pensions and other postretirement benefits, which will make balance sheets more complete, transparent, and understandable.

  2. The Board affirmed its decision to require an employer that is a business entity to:

    1. Recognize in its statement of financial position the overfunded or underfunded status of a defined benefit postretirement plan measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation would be the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation would be the accumulated postretirement benefit obligation.

    2. Recognize as a component of other comprehensive income, net of tax, the actuarial gains and losses and the prior service costs and credits that arise during the period but pursuant to FASB Statements No. 87, Employers’ Accounting for Pensions, and No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, are not recognized as components of net periodic benefit cost. Amounts recognized in accumulated other comprehensive income would be adjusted as they are subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of Statements 87 and 106.

  3. The Board decided that any transition asset or transition obligation remaining from the initial application of Statement 87 or 106 would be recognized as a component of other comprehensive income, net of tax, rather than as an adjustment to the opening balance of retained earnings (as was proposed in the Exposure Draft). Amounts recognized in accumulated other comprehensive income would be adjusted as they are subsequently recognized as components of net periodic benefit cost pursuant to the recognition and amortization provisions of Statements 87 and 106.

  4. The Board decided not to require retrospective application of the accounting change for all financial statements presented, deciding instead to require recognition of the funded status in the statement of financial position as of the effective date of the final Statement. The Board directed the staff to discuss with users and preparers of financial statements the benefits and costs of providing, in notes to the financial statements, the pro forma effect of the changes on the financial position of the entity as of the immediately preceding fiscal year-end. The Board will decide whether to require such a disclosure at a future meeting.

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through September. 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, August 2, 2006—FASB Board Meeting
Wednesday, August 2, 2006—FASB Education Session
Wednesday, August 9, 2006—FASB Board Meeting
Wednesday, August 9, 2006—FASB Education Session
Wednesday, August 16, 2006—FASB Board Meeting
Wednesday, August 16, 2006—FASB Education Session
Wednesday, August 23, 2006—FASB Board Meeting
Wednesday, August 23, 2006—FASB Education Session
Monday, August 28, 2006—Liaison Meeting with Edison Electric Institute and American Gas Association
Wednesday, August 30, 2006—FASB Board Meeting
Wednesday, August 30, 2006—FASB Education Session
Wednesday, September 6, 2006—FASB Board Meeting
Wednesday, September 6, 2006—FASB Education Session
Wednesday, September 6, 2006—p.m., Emerging Issues Task Force Meeting
Thursday, September 7, 2006—Emerging Issues Task Force Meeting
Tuesday, September 12, 2006—Liaison Meeting with the AICPA Accounting Standards Executive Committee
Wednesday, September 13, 2006—FASB Board Meeting
Wednesday, September 13, 2006—FASB Education Session
Tuesday, September 19, 2006—Liaison Meeting with Institute of Management Accountants
Wednesday, September 20, 2006—FASB Board Meeting
Wednesday, September 20, 2006—FASB Education Session
Thursday, September 21, 2006—Financial Accounting Standards Advisory Council Meeting
Wednesday, September 27, 2006—FASB Board Meeting
Wednesday, September 27, 2006—FASB Education Session
Friday, September 29, 2006—Liaison Meeting with the AICPA PCPS Technical Issues Committee



FASB Meetings Available by Audio Webcast and Telephone

To monitor available live meetings free of charge by audio webcast, access the link http://www.trz.cc/fasb/live.html. To monitor by telephone, call 1-800-846-4717. You will be charged $.45 per minute, and VISA, MasterCard, American Express, or Discover Card is required. To listen to a recording of the most recent Board meeting via webcast free of charge, access the link http://www.trz.cc/fasb/archive.html. To listen to a recording by telephone, for a charge of $.45 per minute, call 1-800-462-0393. Questions can be directed to 1-800-846-4630.

Handouts distributed to the audience at Board meetings are posted to our website one-half hour before the start of the meeting. A synopsis of each issue to be discussed at EITF meetings also is posted to this website.

Education sessions are not available by audio webcast or telephone, and no handouts are distributed to the audience.