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 an Accounting Standards Update.

September 27, 2012 FASB Board Meeting

FASB ratification of EITF tentative conclusions. The Board ratified the following consensuses reached at the September 11, 2012 EITF meeting.

Issue 12-A, "Not-for-Profit Entities: Classification of the Sale Proceeds of Donated Financial Assets in the Statement of Cash Flows"

A not-for-profit (NFP) should classify cash receipts resulting from the sale of donated financial assets that upon receipt were directed without any NFP imposed restrictions for sale and were converted nearly immediately into cash as operating cash flows. However, if the donor restricted the use of the donated financial assets to a long-term purpose, then the cash receipts from sale of such donated financial assets should be classified as a financing activity.

The amendments resulting from this consensus are effective prospectively for fiscal years, and interim periods within those years, beginning after June 15, 2013. Retrospective application to all prior periods presented upon the date of adoption is permitted. Early adoption from the beginning of the fiscal year of adoption is permitted.

Issue 12-C, "Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution"

When a reporting entity recognizes an indemnification asset (in accordance with Subtopic 805-20, Business Combinations—Identifiable Assets and Liabilities, and Any Noncontrolling Interest) as a result of a government-assisted acquisition of a financial institution and subsequently a change in the cash flows expected to be collected on the indemnification asset occurs (as a result of a change in the cash flows expected to be collected on the indemnified asset), the reporting entity should recognize the change in the measurement of the indemnification asset on the same basis as the indemnified assets. Any amortization of changes in value of the indemnification asset should be limited to the lesser of the term of the indemnification agreement and the remaining life of the indemnified assets.

For public and nonpublic entities, the amendments resulting from this consensus are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted.

The amendments should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted acquisition of a financial institution.

Issue 12-E, "Accounting for Fair Value Information That Arises after the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs"

The amendments resulting from this consensus supersede paragraph 926-20-35-18 and Subtopic 926-855, Entertainment—Films—Subsequent Events, thereby eliminating the rebuttable presumption that the conditions leading to the write-off of unamortized film costs after the balance sheet date existed as of the balance sheet date. The amendments also eliminate the requirement that an entity incorporate into the fair value measurement used in the impairment test the effects of any changes in estimates resulting from the consideration of subsequent evidence if the information would not have been considered by market participants at the measurement date.

For SEC filers, the amendments are effective prospectively for impairment assessments performed on or after December 15, 2012. For all other entities, the amendments are effective for impairment assessments performed on or after December 15, 2013. In addition, earlier application is permitted, including for impairment assessments performed as of a date before the issuance of the Accounting Standards Update if, for an SEC filer, the entity's financial statements for the most recent annual or interim period have not yet been issued or, for all other entities, have not yet been made available for issuance.

The Board also approved the following consensuses-for-exposure reached at the September 11, 2012 EITF meeting and decided to expose them for public comment for a period of 60 days.

Issue 11-A, "Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity"

When a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a consolidated foreign entity, the parent would be required to apply the guidance in Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, to release any related cumulative translation adjustment into earnings. Accordingly, the cumulative translation adjustment would be released into net income only if such sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided.

For an equity method investment that is a foreign entity, the partial sale guidance in Section 830-30-40 still applies. As such, a pro rata portion of the cumulative translation adjustment would be released into net income upon a partial sale of such an equity method investment. However, that treatment would not apply to an equity method investment that is not a foreign entity. In those instances, the partial sale would have to represent the complete or substantially complete liquidation of the foreign entity that contains the equity method investment in order for the cumulative translation adjustment to be released into net income.

The sale of an investment in a foreign entity includes both (1) the loss of a controlling financial interest in a foreign entity (that is, irrespective of any retained investment) and (2) an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date (sometimes also referred to as a step acquisition). Accordingly, the cumulative translation adjustment would be released into net income upon the occurrence of those events.

The consensus-for-exposure would not require any additional recurring disclosures. Reporting entities would need to comply with the disclosure requirements in Topic 810, Consolidation, Topic 830, and other relevant Codification Topics, as applicable.

The amendments resulting from this consensus-for-exposure would be applied prospectively to (1) a sale or transfer of a subsidiary or group of assets that is a nonprofit activity or a business within the scope of paragraph 810-10-40-3A within a consolidated foreign entity after the effective date, (2) a sale of ownership interests in a foreign entity after the effective date, and (3) a business combination achieved in stages. Prior periods would not be adjusted. Early adoption would be permitted from the beginning of an entity’s fiscal year of adoption to account for the release of the cumulative translation adjustment in the same manner for all disposition and deconsolidation events within that fiscal year.

Issue 12-G, "Accounting for the Difference between the Fair Value of the Assets and the Fair Value of the Liabilities of a Consolidated Collateralized Financing Entity"

The fair value of the financial assets and financial liabilities of a collateralized financing entity would be measured consistently with the guidance on financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk in Topic 820, Fair Value Measurement. The guidance proposed in the consensus-for-exposure limits the scope of the initial measurement guidance in this Issue to reporting entities that initially consolidate a collateralized financing entity and the subsequent measurement guidance to reporting entities that are required to elect or have elected a fair value option under Topic 825, Financial Instruments, to subsequently account for all eligible financial assets and financial liabilities of the collateralized financing entity at fair value. This Issue would define a collateralized financing entity as an entity that holds debt instruments, issues beneficial interests only in those debt instruments that have recourse to the debt instruments held by the collateralized financing entity, and has no equity.

The consensus-for-exposure would not require any additional recurring disclosures. Reporting entities would need to comply with the disclosure requirements in Topic 810, Topic 820, and other relevant Codification Topics, as applicable.

The amendments resulting from this consensus-for-exposure would be applied using a modified retrospective approach to only those consolidated collateralized financing entities that exist at the date of adoption. Adjustments to the financial assets and financial liabilities of those consolidated collateralized financing entities would be made to all relevant prior periods presented upon the date of adoption, beginning from the fiscal year in which FASB Statement No. 167, Amendments to FASB Interpretation No. 46(R) (codified by Accounting Standards Update No. 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities), was initially adopted. Reporting entities also would be permitted to apply the amendments retrospectively to all prior periods beginning from the fiscal year in which Statement 167 was initially adopted. Early adoption would be permitted.