FASB

A&A

House Committee Votes to Restrict Expensing of Stock Options

A House committee has greatly narrowed the scope of a proposal requiring U.S. companies to count stock options as business expenses.The House of Representatives’ Financial Services Committee on Tuesday approved a bill that would require companies to count as an expense only the cost of options offered to their top five executives, Reuters reported.
A&A

FAF Chairman Responds to 'The Stock Option Accounting Reform Act'

Robert Denham, Chairman and President of the Financial Accounting Foundation (FAF), expressed grave concern over the approval of H.R. 3574 “The Stock Option Accounting Reform Act,” by the Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee of the Committee on Financial Services.“Advancing this bill in the legislative process harms the credibility of America's system for providing transparent and unbiased financial information to investors,” Denham said. “By inserting Congress into the setting of standards for accounting by publicly traded companies, H.R.
A&A

FASB Issues Rule on Accounting for Medicare Subsidy

Companies are barred from booking a federal Medicare subsidy as a one-time boost to their earnings under a new rule issued Wednesday.The Financial Accounting Standards Board’s (FASB) final guideline requires companies to record the amount of federal subsidy they expect to receive as an "actuarial gain," to be amortized into income over the average working life of their employees, the Wall Street Journal reported.
A&A

House Subcommittee Votes to Dilute Stock Option Rule

Congress may once again stymie the Financial Accounting Standards Board (FASB) efforts to require companies to show stock options as an expense on company financial statements. A decade ago Congress forced the accounting standards setting board to settle for footnotes in the financial statements addressing stock options. This time, Congress may end up requiring that only the options paid to a company’s top five executives be shown as an expense.The controversial FASB proposal was considered last week by a House Financial Services Subcommittee, taking up a bill sponsored by Rep.
Tax

Stock Options Accounting Legislation Clears House Subcommittee

On Wednesday, the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, chaired by Rep. Richard H. Baker (LA), approved legislation that would preserve broad-based employee stock option plans and improve American competitiveness.H.R. 3574, the Stock Option Accounting Reform Act, introduced by Rep. Baker on Nov. 21, was agreed to by a voice vote with two amendments.
A&A

FASB Considers Costs to Small Businesses in Stock Option Issue

When final rules are adopted requiring expensing of stock options, small businesses may get different treatment than big corporations, according to the chair of the Financial Accounting Standards Board.At a congressional hearing Tuesday, FASB Chairman Robert Herz defended the board's March recommendation for mandatory expensing, but noted that the board is concerned about a "cost-effective" approach to small businesses.
A&A

Congress Grapples with Stock Option Issue

Is history going to repeat itself? Will Congress move as it did 10 years ago to undercut the authority of the Financial Accounting Standards Board (FASB), which is authorized by the Securities and Exchange Commission to set U.S accounting standards?For the second time in a decade, Congress is taking up the mandatory expensing of stock options, a controversial recommendation by FASB, which could be a direct hit to the bottom lines of many U.S. companies who use the options as a form of employee compensation.
A&A

Oxley: Congress Belongs in Stock Option Debate

Stock options. Two little words that pack a big economic punch, so big that Congress is getting more involved in an ongoing debate on how companies should show the options on their financial statements.The term "stock options" refers to the practice of giving employees the option to buy or sell company stock at a fixed price in the future and is at the heart of a battle shaping up that pits Congress against the Financial Accounting Standards Board (FASB), which sets accounting standards for the private sector. Rep.
A&A

Executive Compensation Emerges as Number One Corporate Governance Issue

Executive compensation has emerged as the top corporate governance issue this proxy season. Compensation panels are being scrutinized at unprecedented levels and shareholders are voting "no" on them when a disconnect between pay and performance is observed."The perceived failure of boards of directors to self-regulate and curtail excessive executive compensation has increasingly angered shareholders and incited dialogue regarding legislation to control compensation," states Bill Ide, Sr.
A&A

FASB Issues Proposed Stock Option Rule

As expected, the Financial Accounting Standards Board moved yesterday to require employee stock option pay be shown as an expense on company financial statements, beginning next year, the Wall Street Journal reported.FASB has debated the issue for two years and the exposure draft issued yesterday was long awaited. Stock options, which give employees the right to buy company stock at a fixed price within a certain time period, have never been regulated or recognized as a company expense. They are reflected in the footnotes of the company’s financial statements.
A&A

As Stock-Option Rule Nears, Opponents Turn up Heat

The Financial Accounting Standards Board (FASB) is soon expected to require companies to expense stock options like other forms of compensation, but opponents are fiercely lobbying Congress to block the new rule.The anticipation of FASB action, which could come this week, has "galvanized the effort" said Jeffrey Peck, a lobbyist and consultant to the International Employee Stock Options Coalition.
A&A

FASB Establishes Small Business Advisory Committee

In an effort to increase involvement by the small business community in developing U.S. accounting standards, the Financial Accounting Standards Board (FASB) has established a Small Business Advisory Committee. Committee members will be a resource to the FASB in providing additional and ongoing input on accounting issues before the Board.
A&A

Big Four Accounting Firms Express Their Support of the FASB to Congress

On Wednesday, PricewaterhouseCoopers (PwC), along with the other "Big Four" accounting firms sent a joint letter to members of Congress regarding the independence of the Financial Accounting Standards Board (FASB).
A&A

FASB Stock Option Rules Subject of House Bill

If RSA Security Inc. had to record the stock options it gives to 80 percent of its workers as expenses, its $14 million profit in 2003 would have instead been a $21 million loss. If the Financial Accounting Standard Board (FASB) prevails with new stock option rules, that’s exactly what will happen to some companies.This month, FASB is expected to propose new rules to require options be shown as an expense as opposed to a footnote in financial reports, the Wall Street Journal reported.
A&A

FASB Sets New Rules for Cash-Balance Benefits

The Financial Accounting Standards Board (FASB) last week adopted a definition for cash-benefit pension plans, giving companies new rules for measuring these controversial retirement vehicles.As reported in the Wall Street Journal, the definition says, "A cash-balance pension plan is a defined-benefit pension plan that defines the promised employee benefit by reference to a notional account balance.
A&A

FASB Confirms Existing Rules on Medicare Accounting

The Financial Accounting Standards Board (FASB) on Wednesday cleared up some of the confusion surrounding accounting for the effects of the new Medicare law.The Medicare Act, signed into law in December, has sparked not only political arguments but also an accounting debate over how companies should book the amount of federal subsidy they expect to receive in their financial statements.FASB’s Wednesday vote confirmed that existing rules governing post-retirement benefit costs should be used.
A&A

‘Current Liability’ Rules Could Change Under FASB Plan

The Financial Accounting Standards Board (FASB) is considering a stricter definition of a "current liability," in a proposal to make U.S. rules more similar to international standards.The proposal, expected to be released within a few months, would require companies to use the balance-sheet date — not the date they issue their financial statements — as the only cutoff date for determining whether a liability is current or long-term.Current liabilities are obligations due within one year, while long-term, or noncurrent, obligations are payable over a longer time period.
A&A

IESOC Urges Field Testing of FASB’s Proposed Stock Options Rules

The International Employee Stock Options Coalition is asking the Financial Accounting Standards Board (FASB) to "field test" stock-option valuation models before issuing new statements covering the issue.The group sent a letter to FASB Chairman Robert Herz on Thursday that said, "Investors, issuers and all stakeholders in the financial reporting system would be well-served by such testing," Dow Jones Newswires reported.Currently, FASB does not require companies to expense stock options, but a new standard under consideration would require the options to be expensed the same way other typ
A&A

FASB Revises Accounting Guidance For Variable Interest Entities

The Financial Accounting Standards Board (FASB) has published a revision to Interpretation 46 ("46R") to clarify some of the provisions of FASB Interpretation No. 46, Consolidation of Variable Interest Entities, and to exempt certain entities from its requirements.
Community News

FASB Issues Accounting Standard to Improve Disclosures About Pension And Other Postretirement Benefit Plans

The Financial Accounting Standards Board (FASB) has issued FASB Statement No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefits, that improves financial statement disclosures for defined benefit plans. The project was initiated by the FASB earlier this year in response to concerns raised by investors and other users of financial statements about the need for greater transparency of pension information.

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