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Action Alert No. 08-21
May 22, 2008

NOTICE OF MEETINGS

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

No Board meetings are planned for the week of May 26, 2008. The next scheduled Board meeting is Wednesday, June 4, 2008, and will be announced in next week’s issue of Action Alert.

OPEN EDUCATION SESSION

Wednesday, May 28, 2008, 9:00 a.m.

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.

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, FSP, or Statement 133 Implementation Issue.

May 14, 2008 Board Meeting

Revenue recognition. The Board discussed a draft of Chapter 5, "Measurement of the Contract," for the upcoming discussion paper on revenue recognition. The Board suggested a number of changes for both the structure and the content of the chapter. In addition, the Board voted on the two measurement approaches and expressed a preliminary view in favor of the customer consideration approach. The customer consideration approach (1) measures performance obligations at the price (or value of the consideration) promised by the customer at contract inception and (2) subsequently remeasures performance obligations only if they become onerous.

Reporting discontinued operations. The Board agreed to the following converged definition of discontinued operations:

      A component of an entity that has been (or will be) disposed of and meets the definition of an operating segment under FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, would be reported as a discontinued operation on the face of the financial statements.

The Board also decided to include newly acquired subsidiaries that meet the criteria to be classified as held for sale on acquisition in the above definition of discontinued operations. The Board also supported clarifying that the operating segment criterion is a classification criterion and not a measurement criterion.

To reflect the noncontrolling interests guidance in FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements, the Board decided to revise the tentative disclosure requirements for all components of an entity that have been (or will be) disposed of, including those reported as a discontinued operation. The following are the revised additional disclosure requirements for all components of an entity that have been (or will be) disposed of, including those reported as a discontinued operation:

1. The major classes of revenues and expenses, including impairments, interest, depreciation, and amortization

2. If a parent has one or more less-than-wholly-owned subsidiaries, net income or loss attributable to the parent

3. The major classes of cash flows (operating, investing, and financing)

4. The major classes of assets and liabilities

5. The nature of the disposal activities and the use of the proceeds from the disposal activities.

The Board felt further discussion was necessary to decide whether to include the proposed IASB Board disclosure exemption for newly acquired subsidiaries that meet the criteria to be classified as held for sale on acquisition. It was unclear to the Board how this exemption would interact with the disclosure requirements of FASB Statement No. 141 (revised 2007), Business Combinations; therefore, the Board directed the staff to perform additional research on this subject.

The Board decided that the amendments to FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, related to discontinued operations should be effective for financial statements issued for fiscal years beginning after December 15, 2009, and interim periods within those years. Earlier adoption would be permitted. The Board also decided that the amendments to Statement 144 related to discontinued operations should be applied retrospectively to all periods presented. The Board supported a 120-day comment period for the proposed FSP. The Board will further discuss the IASB Board disclosure exemption for newly acquired subsidiaries and other potential issues at a future Board meeting.

Agenda decision announcement. The FASB chairman announced that the Board’s project to consider whether assets held for sale should be measured at fair value instead of fair value less cost to sell, as currently required under FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, was removed from the agenda.  That decision was based on the results of staff analysis and the IASB’s decision to remove a similar project from its agenda.

FASB DOCUMENT AVAILABLE

Final FSP SOP 94-3-1 and AAG HCO-1, Omnibus Changes to Consolidation and Equity Method Guidance for Not-for-Profit Organizations, was issued on May 19, 2008, and is available on the FASB website.

FUTURE OPEN MEETINGS

The following is a list of open meetings tentatively scheduled through July. 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, June 4, 2008—FASB Board Meeting
Wednesday, June 4, 2008—FASB Education Session
Tuesday, June 10, 2008—Investors Technical Advisory Committee Meeting
Wednesday, June 11, 2008—FASB Board Meeting
Wednesday, June 11, 2008—FASB Education Session
Thursday, June 12, 2008—Emerging Issues Task Force Meeting
Monday, June 16, 2008—FAF/FASB Forum on High-Quality Global Accounting Standards: Issues and Implications for U.S. Financial Reporting, New York City
Wednesday, June 18, 2008—FASB Board Meeting
Wednesday, June 18, 2008—FASB Education Session
Thursday, June 19, 2008—Liaison Meeting with Financial Executives International, Stamford, CT
Tuesday, June 24, 2008—Financial Accounting Standards Advisory Council Meeting
Wednesday, June 25, 2008—FASB Board Meeting
Wednesday, June 25, 2008—FASB Education Session
Friday, June 27, 2008—Small Business Advisory Committee Meeting
Thursday, July 3, 2008—FASB Education Session
Wednesday, July 9, 2008—FASB Board Meeting (tentative)
Wednesday, July 9, 2008—FASB Education Session
Wednesday, July 16, 2008—FASB Board Meeting
Wednesday, July 16, 2008—FASB Education Session
Wednesday, July 23, 2008—FASB Board Meeting
Wednesday, July 23, 2008—FASB Education Session
Wednesday, July 30, 2008—FASB Board Meeting
Wednesday, July 30, 2008—FASB Education Session

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