SUMMARY OF BOARD DECISIONS
Summary of Board decisions 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 are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue an Accounting Standards Update.
September 15, 2010 FASB/IASB Joint Videconference Board MeetingBalance sheet—offsetting. The Boards discussed whether, and when, offsetting of financial assets and liabilities on the statement of financial position provides useful information or is appropriate.
The Boards concluded that the following factors may be helpful in determining when offsetting provides useful information or is appropriate and that these factors should be considered in determining the basis for offsetting of financial assets and liabilities on the statement of financial position:
- Whether the parties need to have the ability to offset or settle net
- Whether the parties need to demonstrate an intent to settle net
- Whether the amounts owed under the respective contracts should be settled on the same date or have the same maturity or be settled simultaneously
- Whether the asset and liability should have the same underlying risk
- Whether offsetting should be based on bilateral or multilateral netting arrangements.
Fair value measurement. The Boards discussed the comment letters received on the FASB’s Exposure Draft of proposed amendments to Topic 820, Fair Value Measurements and Disclosures, and the IASB’s reexposure of the measurement uncertainty analysis disclosure. The comment deadline was September 7, 2010.
The Boards also discussed the preliminary project plan. In October 2010, the Boards will resume their discussions on the issues raised in the comment letters. The Boards plan to issue a common fair value measurement standard in the first quarter of 2011.
The Boards did not make any technical decisions at this meeting.
Emissions trading schemes. The Boards discussed the initial accounting issues in a cap and trade scheme. Specifically, the Boards discussed whether purchased allowances and allowances allocated by the scheme administrator meet the definition of an asset and should be recognized as such in the statement of financial position. The Boards also discussed whether an obligation meeting the definition of a liability exists when an entity is allocated the allowances.
The Boards tentatively decided that purchased and allocated allowances should be recognized as assets.
The Boards tentatively decided that the allocation of allowances creates an obligating event that meets the definition of a liability and should be recognized as such in the statement of financial position.
At future Board meetings, the Boards will discuss the issues of measurement and presentation (including netting) and whether a right to future allocations can be recognized as an asset.
Accounting for financial instruments: impairment. The IASB staff presented an overview of the feedback received on the IASB’s Exposure Draft, Financial Instruments: Amortised Cost and Impairment. Additionally, the FASB staff presented an overview of feedback received to date on the proposed impairment guidance in the FASB Exposure Draft, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities. This meeting was informational; no decisions were reached.