Project Update

Other-Than-Temporary Impairments

Last Updated: April 23, 2009 (Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

Project Objective
*Due Process Documents
Decisions Reached at Last Meeting
*Summary of Decisions Reached to Date
*Next Steps
Board/Other Public Meeting Dates
Background Information
Contact Information

Project Objective

The objective of this project is to provide additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities.

*Due Process Documents

On April 9, 2009, the Board completed this project with the issuance of FASB Staff Position (FSP) FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments.

FSP FAS 115-2 and FAS 124-2 

Decisions Reached at the Last Meeting (April 2, 2009)

See minutes below.

*Summary of Decisions Reached to Date (as of April 2, 2009)

See final FSP.

*Next Steps

None.

Board/Other Public Meeting Dates

The Board meeting minutes 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 become final only after a formal written ballot to issue a final Statement, Interpretation, FSP, or Statement 133 Implementation Issue.

April 2, 2009

Board Meeting —Discussion of comment letters, additional constituent feedback, and redeliberations

March 16, 2009

Board Meeting—Discussion of proposed changes to the current other-than-temporary impairment guidance

Background Information

At the February 18, 2009 meeting, Chairman Herz announced the addition of new FASB agenda projects intended to improve the application guidance used to determine fair values under FASB Statement No. 157, Fair Value Measurements.   The projects were added in response to recommendations contained in the Securities and Exchange Commission’s recent study on mark-to-market accounting, as well as input provided by the FASB’s Valuation Resource Group, a group of valuation and accounting professionals who provide the FASB Board and staff with information on implementation issues surrounding fair value measurements used for financial statement reporting purposes.

At the March 16, 2009 meeting, Chairman Herz announced that the FASB also would address other-than-temporary impairment issues, in conjunction with the project intended to improve the application guidance used to determine fair values under Statement 157. Proposed FSP FAS 115-a, FAS 124-a, and EITF 99-20-b on other-than-temporary impairments (OTTI) is intended to provide greater clarity to investors about the credit and noncredit component of an OTTI event and to more effectively communicate when an OTTI event has occurred.

Contact Information

Kristofer Anderson
Valuation Fellow
keanderson@fasb.org

Adrian Mills
Practice Fellow
aemills@fasb.org

Diane Inzano
Practice Fellow
dcinzano@fasb.org