Research Projects

In addition to the major projects and application and implementation projects discussed above, the Board has research projects on its agenda. Through research projects, technical issues are studied for the purpose of developing the nature and scope of potential major projects. Current research projects are discussed below.

• Accounting for Insurance Contracts
  (Updated May 30, 2008)

  On August 2, 2007, the FASB issued an Invitation to Comment, An FASB Proposal: Accounting for Insurance Contracts by Insurers and Policyholders. That Invitation to Comment includes a Discussion Paper issued in May 2007 by the IASB, Preliminary Views on Insurance Contracts, setting forth its preliminary views on the main components of an accounting model for an issuer’s rights and obligations (assets and liabilities) under an insurance contract. The FASB has not discussed, deliberated, or reached any tentative conclusions about the IASB’s preliminary views. The FASB issued the Invitation to Comment to gather information from its constituents to help decide whether there is a need for a project on accounting for insurance contracts. The Invitation to Comment also asks whether the FASB should undertake this project jointly with the IASB.

  The Discussion Paper presents the IASB’s preliminary views on the main components of an accounting model for all contracts that meet its definition of an insurance contract. The principal focus of the preliminary views is the measurement of insurance liabilities. The FASB's Invitation to Comment asks whether the IASB's preliminary views would be a suitable starting point for a joint project.

  If the FASB were to take on this joint project, its objective would be to develop a common, high-quality standard that would address recognition, measurement, presentation, and disclosure requirements for insurance contacts. The project would provide accounting and reporting guidance for both the issuer and the holder of an insurance contract, although the preliminary views do not address accounting and reporting by the policyholder.

  Other questions posed by the Invitation to Comment include whether the scope of the proposed project should include accounting by policyholders and how the proposed project should interact with other major FASB/IASB joint projects that address similar issues, for example, the conceptual framework and revenue recognition projects.

  The FASB encourages its constituents to respond to both the Invitation to Comment and the IASB’s request for comments on its Discussion Paper. The comment period for both ended November 16, 2007. Use the links below to view the individual comment letters received by the FASB In response to its Invitation to Comment or a summary of those comment letters.

  Insurance Contracts Comment Letters

  Summary of Insurance Contracts Comment Letters

  The FASB held an Insurance Forum in May 6, 2008 to discuss, among other things, the comment letters received on the FASB’s Invitation to Comment on a Proposed Insurance Contracts Project and the IASB’s Discussion Paper. The FASB plans to make an agenda decision in the third quarter of 2008.

  For additional and current information concerning the IASB’s preliminary views use the link below. In late October 2007, the IASB staff posted on the IASB’s insurance contracts webpage a link to a set of questions and answers relating to the service margins paragraphs of the Discussion Paper Preliminary Views on Insurance Contracts. The comment letters received by the IASB on its Discussion Paper also are available via the link below.

  IASB Insurance Contracts Project Update

  CONTACT INFORMATION

  Jeffrey Cropsey
  Project Manager
  jdcropsey@fasb.org

  
  
• Share-Based Payment
  (Updated October 18, 2006. Current as of April 30, 2007.)

  The Board has on its agenda a long-term project to develop comprehensive guidance on the accounting for share-based payment arrangements. The first phase of that project, which focused primarily on the accounting for certain share-based payment transactions with employees, concluded with the December 2004 issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. Future phases of the project will reconsider the accounting for employee stock ownership plans in AICPA Statement of Position 93-6, Employers’ Accounting for Employee Stock Ownership Plans, and the accounting for share-based payment transactions with nonemployees in Statement 123(R). The Board does not expect to commence this phase until it completes (or makes substantial progress toward completing) its project on Financial Instruments: Liabilities and Equity.

  
  
• Financial Instruments
  (April 30, 2008)

  
  

• Consolidations: Policy and Procedure
  (Updated March 13, 2008)

  The Board has on its agenda a long-term project to develop comprehensive guidance on accounting for affiliations between entities, including reconsideration of ARB No. 51, Consolidated Financial Statements. The IASB also has an active project on its agenda to reconsider its guidance in this area. In April 2004, the IASB and the FASB agreed that an objective of both their projects is the development of a common, high-quality standard on consolidation policy. The objective of this research project is to identify and develop plans for the next steps in achieving the Board’s long-term objectives, including plans for coordinating the activities of the FASB with those of the IASB. The Board began those staff research and planning activities in late 2005. Currently, the FASB staff is monitoring the progress of the IASB project on consolidations. The IASB project is expected to yield a Discussion Paper in the second half of 2008, at which time the FASB will consider whether to issue an Invitation to Comment based on the IASB document.

  IASB Consolidations Project Update

  
  
• Effect of a Transfer of Seller Financing on Profit Recognition under Statement 66 and Other Amendments
  (Updated September 24, 2007)

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