On its immediate agenda, the Financial Accounting Standards Board (FASB) plans to release the final Statement 133 Implementation Issue No. E23, Clarification of the Application of the Shortcut Method, later this month. After releasing the exposure draft last summer, the FASB will address the following in its final guidance:
- Swaps that have a non-zero fair value at inception; e.g., the difference between the transaction price (zero) and the fair value price (exit price, as defined by SFAS 157) is solely attributable to a bid-ask spread.
- Hedged items that have a settlement date subsequent to the swap trade date.
The Board declined to re-deliberate any additional items, and designated the effective date of the final Issue for hedging relationships on or after January 1, 2008. For a project update, click here.
Also this quarter, the FASB plans to discuss “whether the recognition provisions in Statement 141R should be applied to assets acquired outside of a business combination,” according to the project update of FAS 2, which focuses on acquired in-process research and development (IPR&D). The Staff expects to issue a proposed FSP during Q1 2008.
During the same time, the Board will discuss FAS 144 and “whether fair value is the appropriate measurement attributable for assets held for sale” as opposed to “fair value less cost to sell,” as currently required. (Update available here). But it has removed from its current agenda the proposed FSP FAS 144-c, Classifying and Accounting for a Depreciable Asset as Held-for-Sale When an Equity Method Investment is Obtained; the update does not provide further explanation.
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