FASB Summary of January 3, 2002 Board Meeting Discussion
Derivatives Implementation Group
Summary of January 3, 2002 Board Meeting Discussion on Statement 133 Implementation Issues
Open Discussion: Derivatives Implementation. The Board discussed the application of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, by not-for-profit (NFP) organizations to split-interest arrangements. The Board decided not to amend Statement 133 to exclude from its scope the accounting by not-for-profit organizations for the embedded derivatives in split-interest arrangements that would otherwise require bifurcation and separate accounting as derivatives. Consequently, conforming changes will need to be made by the AICPA to the guidance in the AICPA Audit and Accounting Guide, Not-for-Profit Organizations, to reflect the requirements of Statement 133. The Board directed the staff to draft guidance for an implementation issue that explains the applicability of Statement 133 to split-interest arrangements of NFP organizations and provides examples of agreements that would and would not require separate accounting for the embedded derivative. With respect to the effective date of that tentative implementation issue, the Board directed the staff to indicate that the guidance would be effective for the financial statements of NFP organizations for fiscal years beginning after June 15, 2002.