FASB Summary of July 30, 2003 Board Meeting Discussion

FASB: Summary of July 30, 2003 Board Meeting Discussion

Derivatives Implementation Group

Summary of July 30, 2003 Board Meeting Discussion on Statement 133 Implementation Issues

Financial instruments: derivatives implementation. At its July 30, 2003 meeting, the Board discussed the comments received on Statement 133 Implementation Issue No. A23, “Prepaid Interest Rate Swaps,” and did not object to the staff’s posting of Implementation Issue A23, as revised consistent with the staff’s recommendations, on the FASB website as cleared guidance. The effective date for Implementation Issue A23 is the first day of the first fiscal quarter beginning after the date that the cleared guidance is posted on the website, with early application permitted for all contracts entered into or substantively modified on or after August 1, 2003. If an entity had been accounting for a contract entered into prior to the effective date as a derivative in its entirety under Statement 133 Implementation Issue No. A9, “Prepaid Interest Rate Swaps,” but, under the guidance in Implementation Issue A23, that contract would not be a derivative in its entirety, the entity should continue accounting for that contract as a derivative in its entirety.