The SEC, in a report mandated by Congress, supports the continued use of fair value accounting standards while also making eight recommendations to improve application of the standards. The suggested changes include reconsidering accounting for impairments of financial instruments and developing more guidance for determining the fair value of investments
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TOPICS / ACCOUNTING & REPORTING
FASB financial accounting & reporting
FASB Issues Proposals to Improve Reporting for Financial Instruments
FASB issued two proposals intended to address concerns arising from the financial crisis relating to accounting for financial instruments. The comment period for proposed FASB Staff Position EITF 99-20-a, Amendments to the Impairment and Interest Income Measurement Guidance of EITF Issue No. 99-20, ends today. It is available at www.fasb.org/fasb_staff_positions/prop_fsp_eitf99-20-a.pdf.
Cox Signals No Major Shake-Up for Fair Value
SEC Chairman Christopher Cox, speaking this week at an AICPA conference, said investors have told the SEC that fair value measurement has increased transparency in financial reporting. But Cox signaled that the SEC would call for some additional guidance on fair value measurements. View highlights from Cox’s speech. Cox devoted a
More Guidance Expected on Fair Value
FASB Chairman Bob Herz says he’s interested in exploring additional disclosure rules that would make valuation techniques more transparent to users of financial statements. Herz and the FASB Board are awaiting the findings of the SEC’s congressionally-mandated fair value accounting study—due Jan. 2—which is expected to call for additional fair
FASB Delays Codification Launch to July
FASB has delayed the official launch of its FASB Accounting Standards Codification until July 1. FASB had expected to approve and make the codification authoritative in April. Prior to the July launch, FASB expects to address issues raised during a yearlong verification period that began on Jan. 15, 2008.
Test-Driving the Codification
UPDATE: FASB Delays Codification Launch to July In January, FASB released the FASB Accounting Standards Codification (ASC or codification). The codification simplifies the classification of accounting standards by restructuring all authoritative U.S. GAAP for nongovernmental entities into one online database under a common referencing system. The codification is a first
Highlights
The effects of such accounting standards on a financial institution’s balance sheet. The impacts of such accounting on bank failures in 2008. The impact of such standards on the quality of financial information available to investors. The process used by FASB in developing accounting standards. The advisability and feasibility of
Forecasting Post-Combination Earnings
The acquisition method of financial accounting for business combinations under FASB Statement no. 141(R), Business Combinations, requires the acquiring company to recognize and measure all identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquired company as of the acquisition date at their respective fair values. The assets
IFAC President: Financial Crisis Demonstrates Need for Common Standards
At a meeting of the International Federation of Accountants’ (IFAC) Board and Council last week in Rome, IFAC President Robert Bunting, a past AICPA chairman, said the global financial crisis has shown the close ties international markets share. He also emphasized the need for a common set of accounting and
Standard Setters Schedule Round Tables on Global Financial Crisis
FASB and the International Accounting Standards Board (IASB) announced details of three public round-table discussions to identify financial reporting issues highlighted by the global financial crisis. The discussions will be held in London on Nov. 14, in Norwalk, Conn., on Nov. 25 and in Tokyo on Dec. 3. The boards
141(R)’s Effect on Goodwill
In reading your article, “A New Day for Business Combinations,” (June 08, page 34) I had some questions regarding [FASB] statement 141(R). A client purchases a company for $20 million. The company has $10 million of tangible assets, mainly cash, receivables and some property. The purchase is highly leveraged and
Shaking Up Financial Statement Presentation
In April 2004, FASB and the International Accounting Standards Board (IASB) created a joint project on financial statement presentation. The project is part of the memorandum of understanding between the two bodies that set out a road map for convergence between IFRS and U.S. GAAP. The goal is to create
Noncontrolling Interest: Much More Than a Name Change
In December 2007, FASB adopted two new business combination standards: Statement no. 141(R), Business Combinations, and Statement no. 160, Noncontrolling Interests in Consolidated Financial Statements. Both culminated years of work directed at improving reporting for consolidated entities. An article in the June 2008 issue of the JofA (“A New Day
Highlights
The rescue package, the Emergency Economic Stabilization Act of 2008, allows the Treasury Department to buy up problem assets in an effort to improve the balance sheets of financial institutions and keep credit flowing. The final version of the plan passed by Congress and signed by President Bush on Oct.
Financial Reporting
The AICPA’s Accounting Standards Executive Committee issued an exposure draft of a proposed Audit and Accounting Guide, Gaming. The proposed guide addresses new accounting issues that have emerged over the years. It also includes guidance dedicated specifically to governmental gaming entities. Comments are due Dec. 9. The ED is available
SEC Releases “Mark-to-Market” Accounting Study Details
The SEC released preliminary details on its study on “mark-to-market” accounting, as authorized in October by section 133 of the Emergency Economic Stabilization Act of 2008 (EESA). The study is to be completed by Jan. 2 in consultation with the Treasury secretary and the Board of Governors of the Federal
FASB, IASB Publish Financial Statement Presentation Paper for Comment
FASB and the IASB published for public comment a discussion paper on financial statement presentation. The paper contains an analysis of issues in financial statement presentation and presents the boards’ initial thinking on addressing those issues. International Financial Reporting Standards and U.S. GAAP provide only limited presentation guidance. In addition, presentation
SEC to Study Fair Value Accounting’s Impact on Bank Failures
The $700 billion rescue package for the U.S. financial system approved by lawmakers in October calls on the SEC to study fair value accounting’s impact on recent bank failures and the quality of financial information available to investors. The study will be conducted in consultation with the Treasury secretary and
FASB Seeks to Clarify Rules for Assessing Future Viability
FASB issued exposure drafts of proposed statements on going concern and subsequent events. The proposals converge U.S. GAAP and IFRS and incorporate accounting guidance related to determining the viability of entities. The proposed statement on Going Concern would require management to consider all available information about the future when assessing
FASB Adds “Business Combinations” to Accounting Standards Codification
FASB added the topic “business combinations” to the FASB Accounting Standards Codification. The addition integrates various standards, including FASB Statement no. 141(R), Business Combinations; FASB Statement no. 109, Accounting for Income Taxes; FASB Interpretation no. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109; and various
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