At its July 30, 2008, weekly meeting the Financial Accounting Standards Board decided that the proposed amendments to Statement of Financial Accounting Standards (SFAS) No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and FASB Interpretation (FIN) No. 46(R), (revised December 2003), Consolidation of Variable Interest Entities, would be effective for fiscal years beginning after November 15, 2009, according to Action Alert No. 08-32.

The decision reversed the Board's determination from its June 11 meeting regarding the transition and effective date.

However, the Board also decided to separately issue an FASB Staff Position (FSP) that would require additional disclosures as soon as possible.

The Board clarified that the initial consolidation of a variable interest entity as a result of the initial application of the proposed amendments to FIN No. 46(R) would require an enterprise to initially measure all assets and liabilities at fair value. Any difference would be recorded as a cumulative-effect adjustment to retained earnings and recorded as of the beginning of the first fiscal year in which the proposed amendments are initially applied.

The Board decided that many of the disclosures approved for the proposed amendments to SFAS No. 140, and FIN No. 46(R) at its June 4 meeting will be included in a separate FSP.

In addition, the Board decided that the proposed FSP will require a nontransferor enterprise that holds a significant variable interest in a qualifying special-purpose entity to make certain disclosures required by the proposed amendments to the FIN No. 46(R) disclosures. The Board decided that the proposed FSP will be effective as soon as possible, but no later than the first interim reporting period in 2009. The Board also decided that the proposed FSP will only be applicable to public companies and that the exposure period for the proposed FSP will be 30 days.