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Highlights from recent FASB meetings

  • FASB meeting Image

Oct 09, 2015

This week, the FASB held two meetings. At its October 5, 2015, meeting, the Board discussed its projects on revenue recognition and income taxes. At its October 7, 2015, meeting, the Board discussed hedging, the disclosure framework, and leases.

Revenue recognition — Identifying performance obligations and licenses

The FASB discussed feedback received on its proposed Accounting Standards Update (ASU) Identifying Performance Obligations and Licensing, which would amend certain aspects of its May 2014 revenue standard (ASU 2014-09). The Board (1) affirmed most of the proposed amendments, (2) made tentative decisions related to the identification of performance obligations and licenses, and (3) directed its staff to begin drafting a final ASU. For more in­for­ma­tion, see De­loitte’s related journal entry and the meeting minutes on the FASB’s Web site.

Accounting for income taxes

The FASB discussed feedback received on two proposed ASUs: (1) Intra-Entity Asset Transfers and (2) Balance Sheet Classification of Deferred Taxes. The Board directed the staff to further research issues raised in response to feedback on the first proposal. The Board’s tentative decisions about the second proposal concerned the transition method (prospective or retrospective application), transition disclosures, and the effective date (for public business entities, annual periods beginning after December 15, 2016, with earlier adoption permitted). The FASB also directed its staff to begin drafting a final ASU related to the second proposal. For more in­for­ma­tion, see Deloitte’s related journal entry and the meeting minutes on the FASB’s Web site.

Financial instruments — Hedging

The FASB made tentative decisions related to (1) excluded components in cash flow hedges, (2) net investment hedges, (3) the use of total coupon or benchmark coupon cash flows in fair value hedges of benchmark interest-rate risk, and (4) designation of a contractually specified component of a nonfinancial item as the hedged risk when features limit the entity’s exposure to the contractually specified component. For more in­for­ma­tion, see the meeting minutes on the FASB’s Web site.

Disclosure framework — Disclosure review: fair value measurement

The FASB tentatively decided to propose changes to the disclosure requirements related to Level 3 measurement uncertainty. In addition, the Board decided that the comment period for the proposed changes would be 75 days or would last until February 29, 2016, whichever period is longer. For more in­for­ma­tion, see the meeting minutes on the FASB’s Web site.

Leases

The FASB discussed the feedback received on a fatal flaw draft of its final guidance on accounting for leases and made tentative decisions related to (1) the recognition of initial direct costs in a sales-type lease, (2) the lessor’s presentation of its net investment in a lease, (3) the accounting for lease modifications that extend the term of a lease, and (4) when a lessee would be required to reassess lease classification. In addition, the FASB decided not to propose alternative requirements for private companies and not-for-profit organizations. For more in­for­ma­tion, see De­loitte’s related journal entry and the meeting minutes on the FASB’s Web site.

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