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.

September 25, 2012 FASB Board Meeting

Leases. The FASB discussed nonpublic entity issues relating to the lessee’s incremental borrowing rate, lessee disclosures, and related party leases.

Lessee Incremental Borrowing Rate

The Board tentatively decided that nonpublic entities should be provided a practical expedient to use a risk-free discount rate, with a term comparable to that of the lease term, as an accounting policy election for all leases. If an entity elects to use a risk-free discount rate, that fact should be disclosed.

Lessee Disclosures

The Board tentatively decided to exempt nonpublic entities from the requirement to provide a reconciliation of the opening and closing balance of the liability to make lease payments.

The Board affirmed the previous decision, for both public and nonpublic entities, to disclose a maturity analysis of future contractual commitments associated with services and other non-lease components that are separated from a lease contract.

Related Party Leases

The Board tentatively decided not to provide specific guidance on recognition and measurement for related party leases. The Board tentatively decided to emphasize the requirements for related party disclosures with, at a minimum, a link to related party guidance.

Next Steps

The staff plans to solicit feedback from the Private Company Financial Reporting Committee and the Private Company Council to determine questions for the invitation to comment section in the Revised Exposure Draft on Leases. The plan is to publish the Revised Exposure Draft in the first quarter of 2013.