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Proposed FASB Staff Position (FSP) - Accounting for Registration Payment Arrangements

Monday, December 4, 2006

The FASB issued a proposed FSP that addresses an issuer’s accounting for registration payment arrangements. The FSP specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with FASB Statement No. 5, Accounting for Contingencies. The guidance in the FSP amends FASB Statement No. 133, Accounting for Derivate Instruments and Hedging Activities, and FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, to include scope exceptions for registration payment arrangements. A copy of the proposed FSP is available below. IMA’s Financial Reporting Committee submitted a comment letter that addressed all of the pertinent issues in the proposed FSP. A copy of the comment letter can be found on IMA’s website.


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