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.
Disclosure Framework: Disclosure Review—Fair Value Measurement. The Board discussed potential changes to disclosure requirements for Topic 820, Fair Value Measurement, and made the following decisions to:
- Remove the following existing disclosure requirements:
- The policy for timing of transfers between levels
- The internal valuation processes for Level 3 fair value measurements
- The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy
- For private companies, the change in unrealized gains and losses for the period included in earnings (or changes in net assets) related to recurring Level 3 fair value measurements held at the end of the reporting period.
- Modify the following existing disclosure requirements:
- For private companies, no longer require a reconciliation of the opening balances to the closing balances of recurring Level 3 fair value measurements. However, those companies would be required to disclose transfers in and out of Level 3 of the fair value hierarchy and purchases of Level 3 assets.
- For investments in certain entities that calculate net asset value, require disclosure of the estimated timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated that information to the reporting entity, either directly or indirectly.
- Add the following disclosure requirement:
- The changes in unrealized gains and losses for the period included in other comprehensive income and earnings (or changes in net assets) for recurring Level 1, Level 2, and Level 3 fair value measurements held at the end of the reporting period. This addition would not apply to private companies.
Financial Statements of Not-for-Profit Entities. The Board continued its discussions from the February 25, 2015 meeting on the proposed Accounting Standards Update, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954)—Presentation of Financial Statements of Not-for-Profit Entities.
The Board decided that the overall expected benefits of the proposed financial reporting changes justify the perceived costs of preparing and using the information, subject to consideration of other input and information received through public exposure and related outreach. The Board also considered input received at the March 3, 2015 Not-for-Profit Advisory Committee meeting and decided to include a question in the forthcoming Exposure Draft to seek input on the presentation of equity transfers.
Additionally, the Board directed the staff to proceed with drafting the Exposure Draft of the proposed Accounting Standards Update for vote by written ballot. The Board expects to issue an Exposure Draft for public comment by mid-April.