FASB

Practice

Cypress CEO Blasts GAAP, Urges Balance Sheet Integrity

In a paper released last week, T. J. Rodgers, chief executive officer of Cypress Semiconductor Corporation, blasted the Financial Accounting Standards Board (FASB) and generally accepted accounting principles (GAAP) for causing U.S. companies to move toward a second set of numbers known as proforma numbers.Mr. Rodgers cites a PricewaterhouseCoopers finding that 74% of semiconductor companies issue proforma earnings statements.
A&A

Lawmakers Advance Anti-Fraud Rules and FASB Act

On July 10, 2002, as capital market slides reflected a continuing erosion of investor confidence, lawmakers in both the House and Senate made progress on accounting reforms.
A&A

McKinsey Finds Big Investors Split Between IAS And GAAP

U.S. President George Bush has called for accounting standards to be responsive to the needs of investors. But results of a survey by McKinsey & Company announced the day before the President's ground-breaking speech to Wall Street show this may be easier said than done.McKinsey surveyed more than 200 institutional investors in 31 countries.
A&A

FASB Proposes Accounting Treatment For SPEs

On July 1, 2002, the Financial Accounting Standards Board released a draft of its proposed rules for consolidation of special purpose entities (SPEs), including the types that kept debt off Enron's balance sheet. The proposal explains that SPEs are used for all kinds of purposes, ranging from leasing, hedging, and securitization to research and development. The most troublesome SPEs from an accounting perspective are those that are controlled by a business through some means other than through clear-cut ownership of voting interests.
A&A

FASB Fights Reforms, Xerox Ignites Squabble Over GAAP

On June 26, 2002, the House Energy Committee heard testimony from the chairman of the Financial Accounting Standards Board (FASB) urging Congress to back-off, leave FASB alone, and stop trying to reform US generally accepted accounting principles (GAAP). The timing could not have been worse.
A&A

SEC Talks Tough on Changes in Store for FASB

The media may have called him the "wishy-washiest watchdog since Scooby-Doo," but Securities and Exchange Commission (SEC) Chairman Harvey Pitt is talking tough about reforming accounting standards.
A&A

FASB Releases Exposure Draft on Guarantees

On May 22, 2002, the Financial Accounting Standards Board (FASB) released an exposure draft (ED) of a proposed Interpretation entitled, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others."The accounting and disclosure requirements for guarantees were reconsidered in connection with FASB's post-Enron project on accounting for special purpose entities (SPEs).
A&A

The Facts About FASB's Funding Controversy

As part of post-Enron accounting reforms, lawmakers are considering government funding for the Financial Accounting Standards Board (FASB), the organization that sets U.S. accounting standards. This article explains the facts about FASB's funding and asks your input. To help you sort through the issues, below is a summary of the two main concerns, including explanations of FASB's current funding. The explanations incorporate insights provided by spokespersons for the American Institute of CPAs (AICPA) and Financial Accounting Foundation (FAF), the board that oversees FASB.
A&A

Congress Hears Five Ways GAAP Falls Short

At a May 14, 2002 hearing of a House Financial Services subcommittee on the issue of "Corporate Accounting Practices: Is There a Credibility GAAP?," lawmakers were briefed on a number of topics, including five areas in which generally accepted accounting principles (GAAP) fall short.
A&A

FASB Releases Flurry of Publications, Awaits Reform Bill

On May 1, 2002, as leaders of the House Energy Committee put the final touches on a radical reform bill to be titled the "Financial Accounting Standards Board Act," the standards board itself rushed to post a flurry of publications to its Web site. The Reform BillAlthough the reform bill is still subject to change, Reuters obtained a copy of the discussion draft of the proposed legislation.
A&A

FASB To Set 'Squeak-Through' Standards Over Protests

In a controversial move greeted with considerable skepticism by accounting firms and their clients, the Financial Accounting Standards Board (FASB) has changed the voting requirement for setting accounting standards. Standards may now be set by a simple majority vote of 4 out of 7 board members. Previously, the minimum requirement was a 5-2 supermajority vote.
A&A

FASB Changes Chairmen Amidst Turmoil and Criticism

The Financial Accounting Foundation (FAF), the organization that oversees the Financial Accounting Standards Board (FASB), announced a change in the head of the FASB. Chairman Ed Jenkins will retire on June 30, 2002, and PricewaterhouseCoopers Partner Robert H. Herz will become the fifth chairman in FASB's 29-year history. Mr. Herz's appointment puts an end to speculation that FAF might appoint a chairman from outside the Big Five.
A&A

Senate Bill of Rights To Address Audits, FASB, Options

On April 22, 2002, as the Financial Accounting Standards Board (FASB) prepared for a new chairman and the House of Representatives prepared for a vote on its leading accounting reform bill, Senator Carl Levin unveiled the Shareholders' Bill of Rights. Tougher and more comprehensive than the House bill, this new Senate bill will address audit reforms, accounting standard-setting, executive stock options, and more.Senator Levin is chairman of the Senate Permanent Subcommittee on Investigations.
A&A

Panel Wants SEC to Lead Accounting into Internet Age

On April 4, 2002, the Securities and Exchange Commission (SEC) hosted a roundtable in Chicago to find out how best to improve financial disclosures. The participants represented key occupations and associations that typically take a back seat in the setting of accounting standards. Their nearly unanimous conclusion: the SEC should take the lead in bringing accounting and financial disclosures into the Internet Age. How to Overcome ObstaclesThe panelists also gave the SEC some advice about how to overcome obstacles to needed reforms:Priority no.
A&A

FASB Endorses Radical Change in Funding

In a significant change for the accounting profession, the Financial Accounting Standards Board released on March 19, 2002 a statement by its chairman, Edmund Jenkins, saying the FASB will support legislation that would replace its private fu
A&A

FAF Issues Proposal to 'Streamline' FASB

As expected, the Financial Accounting Foundation (FAF) issued a request for comments on proposed changes designed to streamline the standard-setting process of the Financial Accounting Standards Board (FASB).
A&A

FASB Vows to Speed Standards, Keep Process Open

Recent Congressional hearings and legislative initiatives have zeroed in on the importance of increasing the independence of the Financial Accounting Standard Board (FASB) and speeding up its standard-setting process.
A&A

FASB Proposes A Change To Lease Accounting

As influential House Energy Committee Chairman Billy Tauzin called for a review of accounting rules “across the country and across corporate boards,” the Financial Accounting Standards Board (FASB) continued its relentless drive to strengthen the standards.
A&A

FASB Moves Forward on Accounting for SPEs

Under pressure to set accounting standards for the kinds of special purpose entities (SPEs) that kept debt off Enron's balance sheet, the Financial Accounting Standards Board (FASB) has tentatively decided on an approach and directed its staff to begin writing an exposure draft.The approach will be a blend of the Consolidated Policy-Modified Approach as of Sept.
A&A

Former SEC Chairmen Urge Congress to Free FASB

Former chairmen of the Securities and Exchange Commission (SEC) testified before the Senate Committee on Banking, Housing, and Urban Affairs on February 12, 2002 on the issues that have arisen as a result of the Enron collapse. A key topic was their shared frustration with the process for setting accounting principles. They urged Congress to find a way to free the Financial Accounting Standards Board (FASB) from the business pressures of constituencies and funding dilemmas.

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