Despite calls for more time, the Financial Accounting Standards Board will proceed with planned disclosure requirements around off-balance-sheet activity to take effect for fiscal periods ending after Dec. 15, 2008. That means calendar-year companies will be expected to begin making the new disclosures in their 2008 financial statements.

FASB determined at its regular meeting this week that it will make some changes and proceed to a final vote on FSP FAS 140-e and FIN 46(R)-e, Disclosures about Transfers of Financial Assets and Interests and Variable Interest Entities, with a final verdict soon to follow. The measure is intended to draw out more information about where entities may have invisible or opaque risks in off-balance-sheet entities while FASB and the International Accounting Standards Board work further on amending standards to make more comprehensive accounting changes.

The projects have been in the works for some time, but they took on a new level of urgency when sub-prime mortgages began failing at alarming rates last year, raising questions about where risky mortgage-backed financial instruments were hiding in complex securitization structures. FASB stepped up the pace on its work to revise Financial Accounting Statement No. 140: Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities and to revise Financial Interpretation No. 46R: Consolidation of Variable Interest Entities.

FASB slogged through nearly two dozen questions and concerns raised in relation to the disclosure requirements, establishing final requirements that members agreed would be meaningful to investors, yet also achievable for entities under a tight implementation timeline. The determinations addressed sticky issues around defining “continuing involvement” in an off-balance-sheet entity, the scope of disclosures that would be required for entities that have continuing involvement, fair-value disclosures in FAS 140, disclosures for secured borrowings, and disclosures regarding any gain on sale.