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 a final standard.

April 8, 2009 Board Meeting

Emissions trading schemes. The Board did not reach any conclusions on the accounting questions related to initial recognition and measurement of tradeable offsets that are issued to an entity free of charge in a cap and trade emissions trading scheme. The Board noted that the accounting for assets and liabilities in an emissions trading scheme involves issues that are also being discussed in the joint conceptual framework project and the IASB project to amend International Accounting Standard (IAS) 37, Provisions, Contingent Liabilities and Contingent Assets. The Board directed the staff to conduct additional research to ensure that conclusions the Board may reach on this project are consistent with conclusions reached on those other two projects.

Reconsideration of Interpretation 46(R). The Board continued redeliberating the Exposure Draft, Amendments to FASB Interpretation No. 46(R), and reached the following decisions:

1. Power over specified assets. The Board decided to add the following sentence to paragraph 14 of the proposed amendments to Interpretation 46(R) for situations in which the power to direct the activities that most significantly impact a variable interest entity is held by multiple parties but the power is not shared (subject to change in drafting):

   If an enterprise concludes that power is not shared but a single activity or group of activities that most significantly impact the entity’s economic performance are performed by multiple parties and each party is performing the same activity or activities, the party with the power over the majority of the activity or activities is the primary beneficiary of the variable interest entity.

2. Examples. The Board decided to:
   
   
   1. Modify Example 1 so the transferor is not the equity holder and the special servicer. In addition, the example will state that the transferor does not hold a variable interest (even though it is the primary servicer). The special servicer will still be the equity holder.
       
   2. Modify Example 8 to more directly align its language with the language proposed at the March 18, 2009 Board meeting related to shared power. Although Example 8 is a nonfinancial structure (a hotel), the example will be changed to a situation in which both parties to the transaction are nonfinancial investors. Additionally, the example will include facts to illustrate the analysis that would be performed if a conclusion was reached that power was not shared.
       
   3. Modify Example 9 so the debt agreement includes a default provision such that if there is a default, then the financial investor can take possession of (and manage or sell) all the assets of the entity.