At its board meeting earlier today, FASB redeliberated Proposed FSP FAS 140-e and FIN 46(R)-e, Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities, and voted to make the new disclosure requirements effective for fiscal periods ending after Dec. 15, 2008, with earlier application encouraged. In addition, language will be included to clarify that if the FSP is adopted in a period other than an annual reporting period, it will apply to the initial interim period and each annual reporting period thereafter.
FASB staff noted that most commenters on the proposed FSP asked that it not be effective until 1Q 2009. However, FASB staff stated they believe the modifications voted on today (prior to the vote on the effective date) would address certain concerns with the proposed requirements, and facilitate making the FSP effective essentially at year-end.
A total of over 20 issues were discussed today regarding changes to (or decisions not to change) disclosure requirements in the proposed FSP, outlined on pdf pages 26-35 of today’s board handout. Further details will likely be provided in the FASB Summary of Board Decisions which FASB began posting this year the day of or the day following board meetings, found in FASB’s News Center.
FASB staff member Pat Donoghue said the staff’s plan is to make the changes agreed to this week, and send it out to external reviewers (fatal flaw review) by Monday, asking for a one week turnaround. Staff then plans to get pre-ballot draft to the board during Thanksgiving week, and expects to issue the FSP no later than December 15 (including production time, according to Donoghue). The FSP discussed by FASB today relates to disclosures only.
Separately, FASB will redeliberate its proposed amendments to FAS 140 and FIN 46R (including the removal of QSPEs) which were proposed in the form of Exposure Drafts (EDs) entitled Proposed Statement, Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140, and Proposed Statement, Amendments to FASB Interpretation No. 46(R). The effective date proposed on those broader amendments is 2010 (technically: as of the beginning of a reporting entity’s first fiscal year that begins after November 15, 2009); and the comment deadline on the broader amendments is Nov. 14.
Hear the latest on FASB, SEC and IASB developments at next week’s FEI conference: Current Financial Reporting Issues. See the agenda and registration info at www.financialexecutives.org/cfri.
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