EXECUTIVE SUMMARY A FASB ED ON ACCOUNTING FOR the retirement of long-lived assets may have a significant impact on the balance sheets of electric utilities with nuclear power plants. Such companies face $33 billion in decommissioning costs, which currently are not fully reflected on their financial statements. UTILITIES OPERATE IN
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Accounting & reporting
Technology
E-Business Tops Tech Priorities for CPAs Representatives of AICPA technology committees gathered in Tucson, Arizona, to identify the 10 most important technological challenges and opportunities facing CPAs in 2000. Throughout its lively three-day discussion, the group was unanimous on one point in particular: You can’t duck these issues. Confront and
Financial Reporting
Online Financial Reports Show Problems and Promise Although Web-based financial reports seem to shed immediate light on public companies’ activities and performance, investors should make sure they not only know what they’re looking at, but also see all they should. At issue, according to a study commissioned by the IASC,
Financial Reporting
Special Report: The Battle Over Pooling of Interests In an effort to improve financial reporting and increase harmony between U.S. GAAP and international accounting standards, FASB introduced a controversial proposal that would require companies to reveal more of the costs associated with their mergers and acquisitions (M&A). However, some in
Banking / Financial Reporting
Washington Furor Over Loan Loss Reserves Are banks with generous loan loss reserves practicing conservative accounting or earnings manipulation? That’s the heart of a Washington, D.C., brouhaha that prompted a House subcommittee to hold a heated hearing on accounting for loan loss reserves. The differences between groups on both sides
Financial Reporting / Technology
AICPA Establishes a Language for Electronic-Based Financial Reporting The AICPA recently laid the foundation for a bridge that will allow CPAs to move more readily from a paper to an electronic economy. Using XFRML (extensible financial reporting markup language), the AICPA high tech task force developed a prototype that will
How to Select the Right Accounting Software
JofA Looks at Accounting Software This is the first of three articles. This month we will examine how each product handles customization, the importance of a vendor’s financial stability, programs’ ability to deliver the type of financial reporting your company or client requires and their capacity for converting numerical data
A Glimpse of the Future
EXECUTIVE SUMMARY LENDERS, INVESTORS AND MANAGEMENT FREQUENTLY depend on CPA-prepared prospective financial statements to answer questions and to help them make decisions about a company’s future. Such statements are helpful in evaluating start-up companies, mergers and acquisitions and expanding businesses. THE CURRENT AUTHORITY ON PROSPECTIVE FINANCIAL statements is SSAE no.
Employee Benefits/Financial Reporting
New ED on Benefit Plan Investment Disclosures The AICPA employee benefit plans committee and AcSEC issued an exposure draft of a proposed statement of position, Accounting for and Reporting of Certain Employee Benefit Plan Investments and Other Disclosure Matters, for public comment. The comment period, which began in mid-May, runs
What Constitutes Control?
EXECUTIVE SUMMARY FASB ISSUED A REVISED ED SEEKING TO DEFINE what constitutes control of an entity. Under current rules, the condition for a controlling financial interest is ownership of a majority voting interest–unless control is temporary or does not rest with the owner of the majority voting interest. FASB’s goal
When Should Advertising Be Capitalized?
EXECUTIVE SUMMARY THE QUESTION OF WHEN TO CAPITALIZE ADVERTISING costs has long presented a problem for CPAs. While the easy solution is for companies to expense advertising as it is incurred, both the IRS and FASB say in some circumstances it should be capitalized. THE MOST FORMIDABLE BARRIER A COMPANY
Insurance and Reinsurance Without Risk Transfer
EXECUTIVE SUMMARY TO MEET THE NEED FOR GUIDANCE WHEN deposit accounting applies to insurance and reinsurance contracts, AcSEC issued SOP 98-7, Deposit Accounting: Accounting for Insurance and Reinsurance Contracts That Do Not Transfer Insurance Risk . The statement is effective for financial statements for fiscal years beginning after June 15,
It’s Time to Implement Segment Disclosures
EXECUTIVE SUMMARY SOME COMPANIES MAY HAVE OVERLOOKED the potential financial reporting impact of FASB Statement no. 131, which must be applied to 1998 financial statements. The statement requires companies to report financial and other information about their operating segments. STATEMENT NO. 131 IS LIKELY TO RESULT in companies reporting more
Segment Information: What Early Adopters Reported
EXECUTIVE SUMMARY AS THEY PREPARE THEIR 1998 FINANCIAL STATEMENTS, most companies are only now implementing FASB Statement no. 131. Examining the segment disclosures of companies that implemented the statement early may help companies with their compliance efforts. OF THE U.S. COMPANIES INCLUDED IN THE Business Week Global 1,000, 14 are
At War — Disclosure of Measurement Uncertainties
EXECUTIVE SUMMARY THE FINANCIAL REPORTING COMMUNITY is concerned about the lack of adequate disclosures about measurement uncertainties in GAAP financial statements. Some standards issued by FASB and AcSEC are complex, confusing and difficult to apply. Paradoxically, companies may be required to make extensive disclosures when there is little uncertainty and
The Decision on Derivatives
EXECUTIVE SUMMARY AFTER SEVERAL YEARS OF DELIBERATION , FASB has issued Statement no. 133, Accounting for Derivative Instruments and Hedging Activities. In an effort to keep up with the rapidly changing global financial markets, the statement applies to all derivatives, even those that have not yet been developed. STATEMENT NO.
FASB 132: What Companies Must Disclose
EXECUTIVE SUMMARY TO IMPROVE EMPLOYERS’ FINANCIAL STATEMENT disclosures of pension and other postretirement benefits, the FASB issued Statement no. 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits, in February 1998. The statement fine-tunes requirements in previous FASB statements and brings uniformity to disclosure requirements. STATEMENT NO. 132 REQUIRES EMPLOYERS
Corporate Spin-Offs
EXECUTIVE SUMMARY CORPORATE SPIN-OFFS HAVE BECOME POPULAR ways for companies to release shareholder value and achieve other business purposes. The transaction involves the pro rata distribution of a controlled corporations stock to the distributing corporations shareholders without their having to surrender any stock in the distributing corporation. Since the Tax
How Companies Report Income
EXECUTIVE SUMMARY WITH ITS ISSUANCE OF STATEMENT NO. 130 , Reporting Comprehensive Income, the FASB is moving closer to the all-inclusive method of income determination. The statement is effective for fiscal years beginning after December 15, 1997. AN ENTERPRISE REPORTS comprehensive income—nonowner changes in equity—to reflect all of the changes
Plain paper dies, but options remain.
Plain Paper: Gone But Not Forgotten On October 13, 1997, the American Institute of CPAs accounting and review services committee (ARSC) voted to withdraw Proposed Statement on Standards for Accounting and Review Services (SSARS), Assembly of Financial Statements for Internal Use Only , and concluded that CPAs should not be
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