At its meeting yesterday, the FASB tentatively decided to:

• Require entities to apply the guidance in the ASU on repurchase (“repo”) agreements and similar transactions in the following manner:
  • For repo-to-maturity transactions and repo financings involving repo-to-maturity transactions that are outstanding as of the beginning of the first reporting period in which the guidance is effective, entities should record a cumulative-effect adjustment to beginning retained earnings as of the beginning of that period.
  • For all other repo agreements and similar transactions, the ASU should be applied prospectively when those transactions are entered into or modified after the effective date.
• Require entities to disclose, as of the beginning of the first reporting period in which the guidance becomes effective, a description of the accounting change and the effect on the balance sheet.
• Not allow early adoption of any final ASU.
• Give the staff permission to draft a proposed ASU.
• Expose the proposed ASU for public comment, with a comment deadline of March 29, 2013.

The Board expects to issue the proposed ASU in December 2012.