Financial Reporting


The SEC staff advised the AICPA Center for Public Company Audit Firms (CPCAF) that it will not object if public companies retrospectively modify the presentation of discontinued operations within their statement of cash flows to correct an error as long as such changes are made in the next periodic report filed after February 15, 2006. In a speech at the December 2005 AICPA Annual Conference on SEC and PCAOB Current Developments, Joel Levine, associate chief accountant of the SEC Division of Corporation Finance, said that while certain presentation formats are inconsistent with FASB Statement no. 95, Statement of Cash Flows, companies can revise their presentations on a one-time basis without referring to the correction of an error. Additional information is available at www.aicpa.org/CPCAF , where interested firms also can learn more about the center and apply for membership.

The SEC offered to expedite its review of registration statements and annual reports from companies that participate in a test group as part of its voluntary program for filing mandatory financial reports in XBRL format. And the Federal Financial Institutions Examinations Council—the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp. (FDIC), the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision—said in a white paper, “Improved Business Process Through XBRL: A Use Case for Business Reporting” ( www.xbrl.org/us/us/ffiec%20white%20paper ), that XBRL improves data quality, increases productivity and efficiency and boosts return on investment and net income. The FDIC implemented a Web-based system that employs XBRL to collect, validate and distribute quarterly bank financial reports, requiring all financial institutions to use it starting in October 2005.

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