FASB is seeking comments as it mulls over the need for a project on accounting for insurance contracts. FASB also is deciding whether to undertake the project jointly with the International Accounting Standards Board (IASB).
If FASB were to take on the joint project, its objective would be to develop a common standard that would address recognition, measurement, presentation and disclosure requirements for insurance contacts. The project would provide guidance for both the issuer and the holder of an insurance contract. The IASB is working on a project that addresses these issues. In May 2007, it issued a discussion paper, Preliminary Views on Insurance Contracts, describing the main components of a proposed accounting model for insurance contracts.
Comments are due to FASB by Nov. 16. To view the invitation to comment, visit www.fasb.org/draft/ITC_Insurance_Contracts.pdf.
“We’re opening up another front in our war on complexity,” said SEC Chairman Christopher Cox in remarks to the SEC’s new Advisory Committee on Improvements to Financial Reporting in August (see interview with committee Chairman Bob Pozen, page 30). “Not only are financial statements difficult for investors to understand, but also companies incur excessive costs as a result of complying with voluminous and overly prescriptive accounting and reporting rules. Your job is to help end this destructive cycle and get our financial reporting system back to first principles.”
To read Cox’s complete statement, visit www.sec.gov/news/speech/2007/spch080207cc.htm .
The SEC published a concept release on allowing U.S. issuers, including investment companies, to prepare their financial statements using International Financial Reporting Standards (IFRS). The release describes the policy issues and provides a list of questions for public input. Comments are due by Nov. 13.
To view the release, go to www.sec.gov/rules/concept.shtml.