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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.
A&A

Restatements: Differentiating Between Bad and Necessary

Regulators are trying to help investors understand the difference between "bad restatements" and ones issued simply due to accounting policy changes.The Securities and Exchange Commission (SEC) is undertaking a public relations effort to show that not all restatements are bad. The SEC believes that the education may be necessary in light of a possible accounting rule change that would require restatements, according to the Wall Street Journal.The Financial Accounting Standards Board (FASB), the private-sector body that writes U.S.
A&A

FASB Close to New Pension Reporting Rule

Companies will be required to report their pension assets and investment strategies under a new rule being considered by the Financial Accounting Standards Board (FASB).One major change is that companies will be required to describe their pension holdings — reporting on the proportion of stocks, bonds, real estate, private equity and other investments, the FASB decided last Wednesday.
A&A

FASB Defers FAS 150 Provisions Related to Mandatorily Redeemable Noncontrolling Interests

Provided by PricewaterhouseCoopers, CFOdirect NetworkAt Wednesday's Financial Accounting Standards Board meeting, the Board decided to defer the provisions of paragraphs 9 and 10 of FAS 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity, (and related guidance in the appendices) as they apply to mandatorily redeemable noncontrolling interests.
A&A

Stock Option Expensing to Become Mandatory in 2005

The Financial Accounting Standards Board met on October 29 to put some of the final touches on its decisions towards mandating expensing of stock options just like any other compensation - an issue which has been steadily gaining momentum for over ten years.
A&A

FASB Defers Date For Accounting Guidance on Variable Interest Entities

At its Board meeting on October 8, the FASB decided to defer to the fourth quarter from the third quarter the implementation date for Interpretation No. 46, Consolidation of Variable Interest Entities, issued earlier this year. This deferral only applies to variable interest entities that existed prior to February 1, 2003.
A&A

FASB Proposes Improvements to Pension Accounting

The Financial Accounting Standards Board (FASB) has issued an Exposure Draft, Employers’ Disclosures about Pensions and Other Postretirement Benefits that would improve 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.
A&A

FASB to Propose Additional Disclosure for Acquisitions

The Financial Accounting Standards Board plans to take up the issue of accounting for acquisitions. Several issues associated with disclosure of transactions relating to acquisitions were decided last month and reported in a recent FASB Action Alert.The Board has proposed that, among other items of disclosure, companies provide separate disclosure of revenue and net income of acquired companies, if practicable, for at least the period from the date of acquisition to the end of the fiscal year of acquisition.
Practice Management

FASB Addresses, Delays Stock Option Rule Setting

The Financial Accounting Standards Board met yesterday to address a myriad of complicated issues surrounding the expensing of stock options. The definitive decision reached at the end of the meeting: delay the issuance of rules by 6-9 months.FASB has been under pressure from a number of groups, including Congress, to define how companies should expense stock options granted to employees. The sticky point, everyone agrees, is honing in on an appropriate valuation method. The widely used Black-Scholes method has often been criticized as an imperfect tool to value options.

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