In a
letter to President Bush, Financial Accounting Foundation Chairman
Robert E. Denham expressed concern “about recent efforts in the United
States and abroad that contemplate political solutions to perceived
flaws in certain accounting standards.” Denham cited political
pressures placed on the International Accounting Standards Board
(IASB) to urgently review and revise its standards, particularly
standards relating to mark-to-market accounting. The IASB broke with
its due process to make one such revision in response to pressure, the
letter states.
In the U.S., lawmakers mandated as part of the financial sector rescue package a study of what, if any, role mark-to-market accounting played in the present financial crisis. Denham makes no mention of the SEC study in his letter.
Overturning an accounting standard through a political process would compromise the credibility of financial reporting “at a time when the capital markets are under great duress and in need of greater transparency,” he states.
Denham wrote to Bush on Nov. 13 on the eve of a G-20 financial summit of leaders from 20 of the world’s richest nations. Denham asked that his letter be given to all summit participants. The letter is available at www.fasb.org/G20LetterNov1308.pdf.
FASB
issued a final FASB Staff Position (FSP), Disclosures by Public
Entities (Enterprises) about Transfers of Financial Assets and
Interests in Variable Interest Entities. The document increases
disclosure requirements for public companies for reporting periods
(interim and annual) that end after Dec. 15, 2008.
The FSP was designed to quickly improve disclosures by public entities and enterprises until the board finalizes and approves pending amendments to Statement no. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and FIN 46(R), Consolidation of Variable Interest Entities. The FSP amends Statement no. 140 to require public entities to provide additional disclosures about transfers of financial assets and variable interests in qualifying special-purpose entities. It also amends FIN 46(R) to require public enterprises to provide additional disclosures about their involvement with variable-interest entities.
The FSP is available at www.fasb.org/pdf/fsp_fas140-4andfin46r-8.pdf.
