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Highlights from the FASB’s July 29 meeting

  • FASB meeting Image

Jul 31, 2015

At its July 29, 2015, meeting, the FASB discussed its projects on (1) the conceptual framework, (2) the disclosure framework, (3) disclosures about hybrid financial instruments that contain bifurcated embedded derivatives, (4) revenue recognition, and (5) balance sheet classification of debt.

  • Conceptual framework: presentation and measurement— The FASB discussed how to describe certain measurement concepts and made tentative decisions regarding presentation, which included:
    • The definitions of revenues, expenses, gains, and losses would be retained.
    • The proposed chapter related to presentation in FASB Concepts Statement No. 8, Conceptual Framework for Financial Reporting, would acknowledge that (1) “existing standards require or permit classifying some items of comprehensive income in other comprehensive income and later reclassifying them into net income” and (2) “there is no conceptual basis for determining which items qualify for that treatment.”
    • The Board would "[c]larify that FASB Concepts Statement No. 5, Recognition and Measurement in Financial Statements of Business Enterprises, does not preclude allocating cash receipts between categories in the cash flow statement based on estimates.”
    See the meeting minutes on the FASB's Web site for more information.
  • Disclosure framework: entity’s decision process — The FASB tentatively decided to add materiality guidance to chapter 3 of Concepts Statement 8 and FASB Accounting Standards Codification Topic 235, Notes to Financial Statements. In addition, the Board directed the staff to prepare a proposed Accounting Standards Update (ASU) and a proposed amendment to chapter 3 of Concepts Statement 8 for a vote by written ballot. See Deloitte's related journal entry and the meeting minutes on the FASB's Web site for more information.
  • Disclosures about hybrid financial instruments that contain bifurcated embedded derivatives — The FASB decided to remove this project from its technical agenda in response to comment-letter feedback indicating that the proposed amendments in the exposure draft would not significantly improve the transparency and decision-usefulness of information about hybrid financial instruments with bifurcated embedded derivatives. See the meeting minutes on the FASB's Web site for more information.
  • Revenue recognition: principal versus agent — The FASB tentatively agreed not to undertake any standard-setting activities related to whether an entity that is a principal in a revenue transaction should estimate gross revenue when it does not know the price the intermediary charged to the end customer. The Board directed the staff to prepare a proposed ASU for a vote by written ballot. See Deloitte’s related journal entry and the meeting minutes on the FASB's Web site for more information.
  • Simplifying the balance sheet classification of debt — The FASB made tentative decisions related to scope, subjective acceleration clauses, waivers of debt covenant violations, recurring disclosures, and transition. In addition, the Board directed the staff to prepare a proposed ASU for a vote by written ballot. See Deloitte’s related journal entry and the meeting minutes on the FASB's Web site for further details.

For more in­for­ma­tion, see the ten­ta­tive Board de­ci­sions on the FASB’s Web site.

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