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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.
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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).
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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.
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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.
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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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FASB Releases Proposal for Revenue Recognition Project

The Financial Accounting Standards Board (FASB) has released for public comment a proposal for a new project on Issues Related to the Recognition of Revenues and Liabilities. In many respects, this is a “back-to-basics” project that will reexamine fundamental concepts. But don’t let the theoretical considerations deter you from reading this proposal.
A&A

Goodwill Write-offs: Paper Losses or Squandered Money?

First quarter earnings announcements of many companies bring news of huge one-time write-offs under the Financial Accounting Standards Board’s Statement No. 142, Goodwill and Other Intangible Assets. This is leading to controversy and changing performance measures.Huge write-offs and controversyFor media giant AOL-Time Warner Inc., the projected write-down for first quarter 2002 amounts to a breath-taking $40 to $60 billion.
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FASB Forges Ahead on Three New Frontiers

At its January 9, 2002 meeting, following a rash of well-publicized complaints about the slowness of the accounting standard-setting process, the Financial Accounting Standards Board (FASB) decided to forge ahead on three new frontiers. It tentatively agreed to: 1. Issue for public comment a prospectus for a major project to update the concepts and principles of revenue recognition. 2.
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Description of FASB Projects Discussed January 9, 2002

The following project descriptions were excerpted from materials made public at the FASB meeting on January 9, 2002. 1. Revenue recognition. The proposed project would have two principal goals: (1) enhancing the authoritative and conceptual guidance for recognizing revenues, and (2) refining the conceptual guidance for defining and recognizing liabilities. The FASB project would lead to the issuance of a new accounting standard on revenue recognition that would apply to business entities generally.

FASB Finds Terrorist Costs Not Extraordinary

Costs and expenses from the September terrorist attack on the U.S. are not to be treated as an extraordinary item, a task force from the Financial Accounting Standards Board has ruled.The decision was made in light of the prevailing economic conditions before the disaster. Task force member Dick Stock reportedly said that the downturn leading up to the atrocity, and the fact that the attack affected virtually every business, made the event "almost ordinary."
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FASB to Change the Rules of Bookkeeping

It has long been a practice of consumer products companies to pay an up-front fee to retailers for the privilege of having retailers carry their products.

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