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A&A

FEI Outlines Top Financial Reporting Challenges for 2005

Financial Executives International has identified the top 10 financial reporting challenges for 2005. These challenges will impact the way companies manage their businesses, report their financial results, and compensate their employees. The challenges include:Stock option expensing. The Financial Accounting Standards Board (FASB) has mandated that all stock compensation be expensed beginning June 30, 2005 for most public companies. Smaller public companies and private firms have until the first annual reporting period after Dec.
A&A

AICPA Issues Statement on Accounting for Real Estate Time-Sharing Transactions

The Accounting Standards Executive Committee (AcSEC) of the American Institute of Certified Public Accountants has issued a Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions.AcSEC issued the SOP to address diversity in practice caused by a lack of guidance specific to real estate time-sharing transactions.
A&A

FASB: Companies Must Expense Options

The Financial Accounting Standards Board (FASB) on Thursday, published FASB Statement No. 123 (revised 2004), Share-Based Payment. Statement 123(R) will provide investors and other users of financial statements with more complete and neutral financial information by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued.
A&A

SEC's Chief Accountants Statement on FASB's Action

On Thursday, the Financial Accounting Standards Board (FASB) issued its Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (Statement 123R), which addresses the accounting for employee stock options. The Commission's Chief Accountant, Donald T. Nicolaisen, issued the following comments on Statement 123R:The issuance of Statement 123R represents another important improvement in US generally accepted accounting principles. It will result in more comparable information in financial statements provided to investors.
A&A

FASB Rules that Companies Must Expense Stock Options

In a long-awaited and sure-to-be controversial move, the Financial Accounting Standards Board ruled yesterday that companies have to begin expensing for stock options given to employees as part of compensation packages. The issuance of Statement 123R represents another important improvement in US generally accepted accounting principles. It will result in more comparable information in financial statements provided to investors, SEC's Donald T. Nicolaisen said in a statement.
A&A

FASB Issues Rule to Conform To International Standard

The Financial Accounting Standards Board (FASB) has issued FASB Statement No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4.
A&A

FASB Delays Action on Rule

The Financial Accounting Standards Board (FASB) has removed from this week's agenda a discussion on a new rule that finance companies have said might force them to write down a bigger portion of debt securities that are held for sale, Bloomberg reported. The rule is unlikely to be pushed forward until 2005, since the board that sets U.S.
Tax

FASB Says Companies Should Book Tax Break as Deduction

Companies that benefit from a new tax break should book it as a “special deduction” against taxable income over time.That recommendation came from the Financial Accounting Standards Board (FASB) Wednesday, and U.S. companies are likely to greet the news warmly because it means they won't take a one-time hit on earnings, Dow Jones Newswires reported. Companies will not need to immediately adjust their deferred income-tax balances based on the new, lower rate.The tax break is included in the “American Jobs Creation Act of 2004” that President Bush signed into law on Oct. 22.
Community News

Financial Accounting Foundation Names Donald M. Young to the FASB

The Financial Accounting Foundation has announced that Donald M. Young, currently Managing Director of Young & Company, a provider of consulting and research services for technology and private equity clients and former Managing Director with PaineWebber/UBS from 1998 to 2003, was named a member of the Financial Accounting Standards Board (FASB) effective January 1, 2005. Mr.
A&A

FASB Delays Rule on Stock-Options Expensing

U.S. accounting rule-setters on Wednesday postponed implementation of a requirement that companies expense employee stock options.The seven-member Financial Accounting Standards Board unanimously agreed to a six-month delay in the options expensing rule — from Jan. 1, 2005 to June 15, 2005. Technology companies, along with Securities and Exchange Commission's top accountant, have promoted a delay.
A&A

Wall Street Firms Take Issue with FASB's Fair-Market Standard

Several financial-services firms-including Citigroup and JP Morgan Chase & Co.-are asking the Financial Accounting Standards Board (FASB) to take another look at a requirement that would change the way companies calculate the fair-market value of assets and liabilities, Dow Jones Newswires reported.Currently, derivatives and trading securities are the types of debt that would be covered by the rule.
A&A

Banks Cheer FASB's Delay of Rule on Writing Down Debt

The Financial Accounting Standards Board (FASB) on Wednesday delayed a rule that would force companies to reduce the value of debt securities because of rising interest rates.The new guideline called for financial services firms to recognize certain losses in their bond holdings each quarter, even if the losses are caused only by higher interest rates, the Wall Street Journal reported.The delay is "a sigh of relief" to banks, said Donna Fisher, the director of tax and accounting at the American Bankers Association.
A&A

FASB May Delay Rule Change on Debt Securities

The Financial Accounting Standards Board (FASB) may delay a rule change that would require financial institutions to reduce the value of debt in their bond holdings when interest rates fluctuate.The proposal would force banks and financial institutions to record declines in the value of mortgage-backed securities in their income statements even if the losses are caused only by rising interest rates rather than falling credit quality, the Wall Street Journal reported.The proposed requirement is part of a group of guidelines called EITF 03-1, which are designed to clarify when companies mu
A&A

FASB Will Allow Companies to Decide How to Value Stock Options

The Financial Accounting Standards Board (FASB) took a big step toward finalizing a rule on expensing stock options Wednesday by agreeing to let companies choose their own method for calculating value.FASB had previously singled out one approach as the preferred method for estimating the fair value of stock options.
A&A

Equity Wins Out Over Liability in FASB Debate Over Options

The Financial Accounting Standards Board (FASB) on Wednesday ruled out the possibility that stock-option pay could be treated as a liability.The decision ends the debate between the liability advocates and those who believe stock-option pay should be classified as equity.Wall Street analysts have argued that employee options are an economic liability because the actual cost to shareholders is the difference between the strike price of the options versus the higher stock price when the options are exercised, the Associated Press reported.
A&A

FASB Addresses Merger Reserve Liability Funds

Under new rules proposed by the Financial Accounting Standards Board (FASB), companies would have to expense merger-related costs as they happen, rather than using one-time reserve funds, the Wall Street Journal reported.In some cases, companies that dip in later to improve their earnings picture have used the reserve funds improperly. Reserve liabilities are often set up at the time of merger and are used for expenses such as firing staff or closing the factories of the acquired company, the Journal reported.FASB, which writes U.S. accounting rules through the authority of the U.S.
A&A

CPA Candidates, Educators can get Access to Free Professional Literature

The Uniform CPA Examination consists of multiple-choice questions and condensed case studies called simulations. Within the simulations, candidates must do an online search of professional literature databases to answer questions. Here are some ways that candidates, students, educators, and schools can get access to helpful online resources. CPA exam candidates can get a free six-month subscription to professional literature used in the computerized CPA Examination. This online package includes AICPA Professional Standards, FASB Current Text, and FASB Original Pronouncements.
A&A

FASB Begins Final Draft of Stock Options Expensing Rule

Despite opposition, the Financial Accounting Standards Board is moving ahead with a rule that would require companies to book stock options as a business expense.The accounting rule-maker decided last week to begin the final draft of the rule, which was first proposed in March and sparked a deluge of response, the Wall Street Journal reported. Supporters, which include the Securities and Exchange Commission, say the rule would give a truer picture of the company’s finances.
A&A

FASB's Plan Could Mean ‘Major Hit’ to Earnings

Update: 7-28-04 - second paragraph: Multinational corporations may be looking at a big increase in reported liabilities and a deep cut to profits if a change in deferred-tax accounting is adopted by the Financial Accounting Standards Board.The FASB staff is expected on Tuesday to recommend further study of the feasibility of requiring companies to book a liability for taxes payable on profits earned and held overseas, the Wall Street Journal reported. Increasing companies’ reserves for tax liabilities, which would be a result of the requirement, would chip away at earnings.
A&A

House Limits Stock Option Expensing to Top 5 Officers

A much-discussed proposal to require public companies to treat all stock options as business expenses has been put on hold by the House of Representatives.In a 312-111 vote Tuesday, the House approved a bill that delays new rules pending an economic study, the Wall Street Journal reported. The move rejects the recommendation of the independent Financial Accounting Standards Board and supports technology companies that objected to the proposal.The bill would not prevent companies from treating stock options as expenses if they wish – that’s no change from the current rules.

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