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 an Accounting Standards Update.

May 23, 2013 FASB Board Meeting

Revenue recognition. The FASB continued redeliberating the revised Exposure Draft, Revenue from Contracts with Customers (the 2011 ED).

The Board discussed the consequential amendments of its tentative decision in January 2013 relating to transfers of assets that are not an output of the entity’s ordinary activities. The Board tentatively decided that the guidance in the revenue standard that relates to recognition, measurement (including the constraint), and existence of a contract would apply to sales or transfers to noncustomers of nonfinancial assets, including in substance nonfinancial assets (held directly or in a subsidiary) that do not constitute a business.

Insurance contracts. The FASB continued its discussions of the proposed insurance contracts standard.

The Board reviewed the costs and benefits of the decisions reached in the insurance contracts project as well as the effects of the proposed Accounting Standards Update on financial reporting complexity.

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

The Board also decided to hold public roundtable meetings following the comment letter period to consider the views of, and obtain information from, interested stakeholders about the proposed Update. The dates, times, and information about how to participate in a public roundtable will be announced separately at a later date.

Transfers and servicing: repurchase agreements and similar transactions. The Board discussed the feedback received on the proposed Accounting Standards Update, Transfers and Servicing (Topic 860): Effective Control for Transfers with Forward Agreements to Repurchase Assets and Accounting for Repurchase Financings. In light of that feedback, the Board assessed the following objectives for beginning redeliberations on the project:
  1. Objective 1—To address concerns related to repurchase-to-maturity transactions
  2. Objective 2—To address concerns arising from transfers of financial assets with contemporaneous agreements that convey significant risks to the transferor (regardless of the form of the transaction)
  3. Objective 3—To reassess the principles for derecognition for all transfers of financial assets.
The Board tentatively decided on Objective 2. Additionally, the Board tentatively decided to address that objective by retaining the current effective control model and requiring additional disclosures for transfers of financial assets with contemporaneous agreements that result in the transferor retaining risks associated with the transferred financial asset. The staff will develop a disclosure package consistent with Objective 2 for the Board’s deliberations at a future date.