Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

October 29, 2014 FASB Board Meeting

Accounting for Financial Instruments—Impairment. The Board continued redeliberations of the December 2012 proposed Accounting Standards Update, Financial Instruments—Credit Losses (Subtopic 825-15), specifically discussing: (1) disclosures about credit risk and the recognition of credit losses and (2) the scope of the final guidance.


The Board made the following decisions:
  1. The Board affirmed the provisions in the proposed Update that require an entity to disclose the factors that influenced management’s current expected credit losses, the changes in those factors, and the reasons for those changes.
  2. Consistent with the Board’s decision reached at the September 3, 2014 Board meeting to retain current generally accepted accounting principles (GAAP) for writeoffs of uncollectible receivables, the Board decided that an entity should disclose its policies for writing off uncollectible receivables.
  3. The Board affirmed the disclosure guidance in the proposed Update about an entity’s reasonable and supportable forecasts of credit losses. The Board decided not to explicitly require that an entity disclose the time period covered by the reasonable and supportable forecasts.
  4. The Board decided to retain the current GAAP disclosures requiring an entity to disclose its policies for accounting for nonaccrual financial assets, including policies for placing financial assets on nonaccrual status.
  5. The Board decided to clarify that the qualitative disclosures included in the proposed Update relating to collateralized financial assets would only apply to collateral-dependent financial assets.
  6. The Board affirmed the provision in the proposed Update that requires that an entity disclose past-due information for all financial assets within the scope of the current expected credit loss (CECL) model.
The Board also discussed disclosures related to available-for-sale debt securities and the roll forward disclosure requirements in the proposed Update, but did not make final decisions regarding these topics. The Board directed the staff to perform additional research regarding the definition of originations to be included in the roll forward disclosure.


The Board decided to remove the following types of financial assets from the scope of the CECL model:
  1. Loans made to participants by defined contribution employee benefit plans
  2. Policy loan receivables of an insurance entity
  3. Promises to give (pledge receivables) of a not-for-profit entity
  4. Related party loans and receivables between entities under common control
The Board decided to include financial guarantee contracts that are not accounted for as insurance or at fair value through net income in the scope of the CECL model.

Additionally, the Board affirmed that expected credit losses on reinsurance receivables of an insurance entity and loans made by a not-for-profit entity to meet its mission (programmatic loans) would be accounted for under the CECL model.

The Board directed the staff to perform further research on whether the disclosure provisions in the proposed Update, as subsequently modified, should apply to reinsurance receivables, programmatic loans, and financial guarantees.

Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The Board discussed the staff’s analysis of stakeholders’ feedback received on proposed Accounting Standards Update, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, and affirmed the proposed changes.

Presentation and Disclosure

The Board affirmed its decision to eliminate the concept of extraordinary items from generally accepted accounting principles (GAAP). The presentation and disclosure requirements in Subtopic 225-20 for items that are unusual in nature or infrequently occurring will be retained.


The Board decided to revise its previous decision and to allow entities an option to elect either prospective or retrospective application rather than requiring prospective application.

Transition Disclosures

The Board decided that the only required transition disclosure for an entity that prospectively applies the guidance would be to disclose both the nature and amount of an item included in income from continuing operations after adoption that relates to an adjustment of an item previously separately classified and presented as an extraordinary item before adoption, if applicable.

Effective Date and Early Adoption

The guidance will be effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The Board decided to permit early adoption provided that the guidance is applied from the beginning of the fiscal year of adoption.

Next Steps

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