FASB financial accounting & reporting

TOPICS / ACCOUNTING & REPORTING

May 1, 2007

Avoiding FASB 123(R) Pitfalls

EXECUTIVE SUMMARY FASB Statement no. 123(R), Share-Based Payment, poses a potential dilemma for companies with net operating losses (NOLs) that award nonqualified stock options (NQSOs) as compensation. If a company’s allowable tax deduction for stock option compensation exceeds the related book expense, it can realize an

May 1, 2007

Employee Benefits

In a staff position document, FASB amended several statements to conform with pension-reporting requirements of Statement no. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. FASB Staff Position FAS 158-1 also revised implementation guidance for Statement no. 158 and made technical revisions to the statement itself. Statement

May 1, 2007

Financial Reporting

A second, related FASB exposure draft is Not-for-Profit Organizations: Goodwill and Other Intangible Assets Acquired in a Merger or Acquisition. Both are part of a FASB project on business combinations. The AICPA issued Interpretation no. 29, Reporting on an Uncertainty, Including an Uncertainty About an Entity’s Ability to Continue as

May 1, 2007

Extraordinary Items Share Exclusive Company

EXECUTIVE SUMMARY Material gains and losses are classified as “extraordinary” on the income statement when they are both “unusual” and “infrequent.” Extraordinary items are reported at the bottom of the income statement, net of their tax effects. FASB Statement no. 145 significantly shortened the list of

April 1, 2007

Highlights

FASB issued a standard that gives companies the option to report selected financial assets and liabilities at fair value. Statement of Financial Accounting Standards no. 159, The Fair Value Option for Financial Assets and Financial Liabilities, is designed to reduce complexity in accounting for financial instruments and

April 1, 2007

A Road Map for Share-Based Compensation

EXECUTIVE SUMMARY Since FASB Statement no. 123(R) began requiring companies to recognize an expense equal to the grant-date fair value of options awarded as compensation, there has been a significant change in share-based payments to employees. Companies are taking a fresh look at the alternatives available to

April 1, 2007

Frontline Reaction to FASB 123(R)

EXECUTIVE SUMMARY The issuance of FASB Statement no. 123(R) forced companies to make several important decisions about their use of stock options as a compensation tool, to select the right valuation model and minimize the impact on financial reporting and public disclosure. A survey showed companies

March 1, 2007

Financial Reporting

The commission’s amendment will align the reporting of equity awards in the Summary Compensation Table and the Director Compensation Table to the amounts that are disclosed in the financial statements under Statement no. 123(R), which requires recognition of the costs of equity awards over the period in which an employee

February 1, 2007

Changes in Accounting for Changes

EXECUTIVE SUMMARY Companies have always faced a major issue of how to reflect changes in accounting methods and error corrections in financial statements. In 2005 FASB issued Statement no. 154, Accounting Changes and Error Corrections. The new rules are effective for fiscal years ending after December

September 1, 2001

Say Good-Bye to Pooling and Goodwill Amortization

EXECUTIVE SUMMARY NEW FASB STANDARDS prohibit the pooling-of-interests method of accounting for business combinations and require a purchase accounting method that does not allow goodwill amortization. The standards are a radical change, and management accountants, auditors and financial executives must understand and work with a very different accounting process.

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