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.
Discussion paper—technical agenda. The Board recommended that the following potential financial reporting topics be included in an agenda Discussion Paper that will be issued in the first half of 2016:
- Financial Performance Reporting (including the Performance Statement, Other Comprehensive Income, Cash Flow Statement, and Segment Reporting)
- Distinguishing Liabilities from Equity
- Intangible Assets
- Pensions and Other Postretirement Employee Benefit Plans.
- Inventory and Cost of Sales
- Simplifying the Measurement of Asset Retirement Obligations.
Simplifying the Measurement of Asset Retirement Obligations
The Board decided not to add a project on Simplifying the Measurement of Asset Retirement Obligations to its agenda.
Liabilities & Equity—Targeted Improvements
The Board also decided to remove Simplification of EITF Issue No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” originally included in Phase 2 of the Liabilities and Equity—Targeted Improvements project, from its agenda. However, the Board decided to keep Accounting for Instruments with Down-Round Features within that same project on the agenda.
Financial statements of not-for-profit entities (phase 1). The Board continued its Phase 1 redeliberations on the proposed FASB Accounting Standards Update, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities, focusing on the following topics:
- Netting of external and direct internal investment expenses against investment return
- Disclosure of netted investment expenses
- Expenses by nature and analysis of expenses by function and nature
- Enhanced disclosures about cost allocations and improved guidance on management and general activities.
The Board affirmed the proposal to require the netting of external and direct internal investment expenses against investment return. The Board also directed the staff to provide implementation guidance to illustrate what activities constitute direct internal investing activities.
Disclosure of Netted Investment Expenses
The Board decided not to require that not-for-profit entities (NFPs) disclose internal salaries and benefits that are netted against investment return. The Board affirmed its decision that NFPs are no longer required to disclose any other investment expenses that are netted against investment return.
Expenses by Nature and Analysis of Expenses by Function and Nature
The Board affirmed the proposal to require all NFPs to disclose expenses by natural classification. The Board also directed the staff to explore whether to exclude certain business-like NFPs from the current requirement to report expenses by function before considering whether to require an analysis of expenses by function and nature.
Enhanced Disclosures about Cost Allocations and Improved Guidance on Management and General Activities
The Board affirmed the proposal to require NFPs to provide enhanced disclosures about the method(s) used to allocate costs among program and support functions. The Board also affirmed the proposal to refine the FASB Accounting Standards Codification® definition of management and general activities and to provide additional implementation guidance to better depict the types of costs that can be allocated among program and/or support functions and those that should not be allocated.