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Stock Option Expensing Subject of House Hearing

Robert Herz, chairman of the Financial Accounting Standards Board (FASB) strongly objected this week to proposed legislation that would place a three-year moratorium on the expensing of stock options. He said the action "would be in direct conflict with the expressed needs and demands of investors." "The moratorium would establish a potentially dangerous precedent," Herz said in testimony before a House panel.
A&A

FASB Agrees to Rethink Pension Rule Change

Under increasing pressure, the Financial Accounting Standards Board (FASB) agreed to take another look at its proposed rule that would change the way some pensions are valued which could have had a possible negative impact on some companies’ balance sheets. Industry groups decried the proposed rule change, which would have required companies to use an interest rate tied to a market index—a one-year Treasury bill, for instance—to place a value on their pension liabilities.
A&A

FASB Grapples With Valuation of Stock Options

How to place a value on stock options is just one of the issues the Financial Accounting Standards Board (FASB) is challenged with as it moved this week to allow companies to reverse stock option expenses on their financial statements when an employee later gives up the options. The Board is working to develop new stock option accounting rules. Most of corporate America is deeply concerned and adamantly opposed to the Board’s move last month to require the expensing of options.
A&A

FASB Approves Expensing of Stock Options

The debate on mandatory expensing of stock options moved center stage last week when the Financial Accounting Standards Board (FASB) voted unanimously to require companies to expense employee stock options. It could take up to a year before the final draft is released with the new rule taking effect sometime in 2004. In 1994 the board considered adopting the expensing method but encountered resistance from corporate groups as well as Congressional members. It seems likely that will happen again. Last month, 15 U.S.
A&A

SEC Formally Reaffirms FASB, Approves PCAOB

Responding to a requirement of the Sarbanes-Oxley Act, The Securities and Exchange Commission has reaffirmed that the Financial Accounting Standards Board has met the criteria needed to continue to be recognized as the accounting standard setting body.FASB Chairman Robert Herz said, "We appreciate the continued confidence and support of the SEC and look forward to working closely and effectively with the Commission and its staff, as well as with the new Public Company Accounting Oversight Board in ensuring quality fi
A&A

Tell The Truth, Unless it Hurts - Stock Option Accounting

The following is a guest editorial by, Raymond L. Dever, CPA (Retired)Tell the Truth, Unless it Hurts - Stock Option Accounting. Or, unless it is politically dangerous. "We can't stand by and let accountants wearing green eyeshades decide who is going to get the American dream," says Senator Barbara Boxer (D-California) before a Silicon Valley lobbying organization.
A&A

Stock Options And Pensions Added to FASB Agenda

Responding to requests from investors, financial analysts and other users of financial information, the Financial Accounting Standards Board (FASB) added to its agenda two projects that will seek to improve the accounting and disclosures relating to stock-based compensation and pension costs.Amongst other issues, the project on stock-based compensation will address whether to require that the cost of employee stock options be treated as an expense.
A&A

US Senators Urge FASB to Reconsider Stock Options Stance

A bi-partisan coalition of United States Senators, led by former accountant Sen. Mike Enzi (R-WY), is urging the Financial Accounting Standards Board to more fully consider the question of expensing stock options, and suggested that the deliberation process currently underway is “basically flawed.”The Federal Accounting Standards Board Invitation to Comment specifically stated that it was not interested in views on whether stock options granted to employees result in compensation expense for the issuing entity.
A&A

Pitt’s Final Days Reveal Move to Assert More Control Over FASB

An article in the Wall Street Journal ("FASB Recognition Stalled Amid Fight Over Control," February 21, 2003) reveals that in the weeks leading up to his departure, Harvey Pitt pushed for and failed in an attempt to establish greater SEC control over the Financial Accounting Standards Board.Mr. Pitt’s plan was for the SEC to hold tighter control over FASB, the make up of the membership of the Financial Accounting Foundation, the selection of the members of the FASB, and the standard setting agenda of the organization.
A&A

Help is on The Way For Real Estate Time-Share Reporting

Professionals dealing with real estate time sharing transactions will soon get additional reporting guidance by both the AICPA and the Financial Accounting Standards Board.The AICPA has released a Statement of Position (SOP), "Accounting for Real Estate Time-Sharing Transactions." The proposed SOP would provide guidance on a seller's accounting for real estate time-sharing transactions in financial statements prepared in conformity with generally accepted accounting principles (GAAP).
A&A

FASB Enrolls Investment Community in Standard Setting Process

To increase the investment community’s participation in the accounting standard setting process, the Financial Accounting Standards Board (FASB) has established a User Advisory Council. The FASB will host its first meeting of the User Advisory Council on Thursday, February 13, at the Grand Hyatt in New York City.The Council will assist the FASB in raising awareness of how investors and investment professionals, equity and credit analysts and rating agencies use financial information.
A&A

PCAOB Face Pay Cuts, FASB Dips Into Reserves

The federal government agreed to help out the Public Company Accounting Oversight Board (PCAOB) with emergency funding until the new fee-based system is in place. But members of the board may have to take pay cuts for awhile. The Financial Accounting Standards Board also faces funding delays and is coping by dipping into reserves.
A&A

FASB Issues FIN 46 to Curb Enron-Style Abuses

It took several decades and a crisis of unprecedented proportions to bring the issues to a head, but today's accountants have only weeks to come to grips with the new rules on accounting for special purpose entities (SPEs) like the ones that contributed to Enron's collapse.
A&A

FASB Releases FAS 148 on Stock Options

The Financial Accounting Standards Board (FASB) has released Statement No. 148 on "Accounting for Stock-Based Compensation—Transition and Disclosure." This statement provides alternative methods of transition for companies that choose to switch to the fair value method of accounting for stock options. Statement 148 also makes changes in the disclosure requirements for stock-based compensation, regardless of which method of accounting is chosen.
A&A

FASB Tightens Accounting Rules For Loan Guarantees

The Financial Accounting Standards Board
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FASB Issues 2nd Draft on Accounting for Stock Options

The Financial Accounting Standards Board (FASB) has issued another invitation to comment on stock-based compensation. This one asks for your views on accounting for the fair value of employee stock options.FASB's document provides you with background information in the form of a concise helpful explanation of the similarities of and differences between the international accounting proposal and one of the two types of accounting now permitted in the U.S.
A&A

Hit List Picked For Fast-Track FASB/IASB Convergence

The Financial Accounting Standards Board (FASB) has reached into its vast reservoir of U.S. accounting standards and drawn up a hit list of 17 topics targeted for fast track convergence with international standards. The winning topics in this lottery are not necessarily the U.S.
A&A

AcSEC Relinquishes Accounting Standard-Setting Role

The American Institute of Certified Public Accountants (AICPA) announced that its Accounting Standards Executive Committee (AcSEC) will stop issuing general purpose accounting statements of position and concentrate its focus instead on industry-specific accounting and auditing guidance. The decision, which was made several weeks ago, was also announced by Financial Accounting Standards Board (FASB) Chairman Robert Herz at a conference of financial executives in New York.
A&A

IASB and FASB Tout Their 'Norwalk Agreement'

Accounting standard-setters and regulators in the U.S. and Europe jointly announced an agreement to stamp out differences in accounting standards. The pact was reportedly made in Norwalk, Connecticut last month by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).
A&A

Results of 2002 Survey on FASB's Priorities

The Financial Accounting Standards Board (FASB) got an earful this year, when it conducted its annual survey on priorities. As in prior years, members of the Financial Accounting Standards Advisory Council (FASAC) and others were asked their views. But, this year, everyone was asked to start with a clean sheet of paper, rather than the usual list of projects to rubber stamp.

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