Financial Reporting

Tax

HealthSouth Agrees to $445 Million Settlement

HealthSouth Corp. announced on Wednesday that it will pay $445 million to settle several lawsuits that were filed against the company and some of its former directors after an accounting scandal.HealthSouth will pay $215 million in common stock and warrants, and its insurance carriers will pay $230 million in cash, the company said.

States Must Report Health Care Liabilities for Retired Employees

State and local governments, long generous to employees with promises of health care in retirement, often in exchange for pay increases, are struggling to estimate these costs for financial statement purposes, according to new rules issued by the Government Accounting Standards Board (GASB).
A&A

Letter Summarizes SEC Views on Stock Options

The Office of the Chief Accountant of the Securities and Exchange Commission (SEC) on Tuesday issued a public letter to the accounting industry summarizing the staff’s views regarding the accounting for stock options in the historical financial statements of public companies.Advertisement
Community News

OFHEO Head Wants Congress to Act on New Rules for Fannie and Freddie

James Lockhart, director of the Office of Federal Housing Enterprise Oversight (OFHEO), the federal watchdog for Fannie Mae and Freddie Mac, the mortgage giants, said in prepared remarks to the American Enterprise Institute that if Congress does not act now on a bill to create stronger regulations for the companies, “the enterprises and their shareholders will continue to confront uncertainty,” MarketWatch reports.
A&A

FASB enhances guidance for measuring fair value

The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements, providing enhanced guidance for using fair value to measure assets and liabilities. More than 40 current accounting standards within generally accepted accounting principles (GAAP) require or permit entities to measure assets and liabilities at fair value.
A&A

Going Into Effect September 15

Two pronouncements, FAS 155: Accounting for Certain Hybrid Financial Instruments and FAS 156: Accounting for Servicing of Financial Assets by the Financial Accounting Standards Board (FASB) become effective September 15, 2006.

Candidates for Missouri State Auditor Trade Charges of Incompetence

Democrat Susan Montee and Republican Sandra Thomas, opposing candidates for Missouri state auditor, accused each other in a series of charges and countercharges this week of failing to exercise their responsibilities as auditors of their home counties.Advertisement

Class Action Securities Lawsuits: Winners and Losers

A wave of stock option backdating litigation against public companies who issued the options and the executives who benefited by exercising them, recently began hitting the American judicial system.
A&A

BWise Supports COSO Guidelines for Smaller Public Companies

BWise, a leading provider of compliance and enterprise risk management software, on Monday announced support for new guidelines from the Committee of Sponsoring Organizations of the Treadway Commission (COSO), entitled Internal Control over Financial Reporting – Guidance for Small Public Companies.Advertisement
Tax

Capitalization of Tangible Assets Regulations Proposed

Last Friday, the U.S. Treasury Department and the Internal Revenue Service (IRS) issued proposed regulations clarifying the treatment of expenditure incurred in selling, acquiring, producing or improving tangible assets.

Accounting, Economic Experts Call Expensing Stock Options Improper Accounting

A University of California (UC), Berkley management journal became the focus in reopening the debate on stock option expensing when it published a position paper calling on the Securities and Exchange Commission (SEC) to repeal the Financial Accounting Standards Board’s (FASB) new standard requiring the expensing of employee stock options.Advertisement

Fannie Mae Update: Years to Recovery

Fannie Mae announced earlier this month in its second quarter filing with the Securities and Exchange Commission (SEC) that it was on schedule to file restated results for the years 2001 through 2004 by the end of this year, but it acknowledged that two more accounting errors have been discovered, one of which will lead to an unspecified gain on a previously estimated $2.4 billion loss on mortgage commitments.

Defining the 7 Elements of Governmental Financial Statements

The Governmental Accounting Standards Board (GASB) has proposed its fourth Concepts Statement Elements of Financial Statement, defining the seven elements of governmental financial statements.
Tax

LIFO Effect on Oil Company Profits Draws New Scrutiny

Last week’s drop in oil prices resulting from the terrorist plot against airliners bound for the U.S. is likely to prove temporary, as economists predict continued escalation in global demand for fuel. And U.S.

Towards a Better Understanding of the Financial Statement Auditor Reports

The American Institute of Certified Public Accountants (AICPA), the American Accounting Association (AAA), and the International Auditing and Assurance Standards Board (IAASB) have joined forces to launch a research initiative that will provide a better understanding of users’ perceptions of the financial statement audit and the auditor’s report.

More SOX Relief for Smaller Companies, Foreign Private Issuers

The Securities and Exchange Commission (SEC) has issued two releases granting further relief from compliance with Section 404 of the Sarbanes-Oxley Act of 2002 (SOX) to smaller public companies and many foreign private issuers.Advertisement
Community News

Financial Statement Manipulation

Accounting rules that define the limits with which corporate America prepares their financials are described as too many numbers, hard to understand with vague wording and legalese, according to the CFA Inquirer.

Report Links Spreadsheets to Risk of Compliance Failure

A recent survey of financial executives reveals the 92 percent of all public companies use spreadsheets for critical accounting activities in their revenue reporting processes, increasing the likelihood of compliance failures and financial restatements. These findings should be concerning because the risks introduced by spreadsheets go against basic compliance principles.The report, “Enterprise Systems and Revenue Recognition: The Missing Link”, was sponsored by Softrax Corp. and conducted by RevenueRecognition.com and IDC.
A&A

IRS Announces New Tip Reporting Program

The Internal Revenue Service (IRS) has released formal guidance on its new tip reporting procedure, the Attributed Tip Income Program (ATIP). ATIP is a three-year program that does not require employers to meet with the IRS to determine tip rate or eligibility. Employers will participate on an annual basis, however, participation by employers and employees is voluntary and does not require a signed agreement with the IRS.

AICPA, SEC Honchos to Co-Keynote XBRL Meeting

In what may propel needed increased market awareness of eXtensible Business Reporting Language (XBRL) and reinforce the fact that the accounting profession has led the development of that Internet-based technology, Securities and Exchange Commission (SEC) Chairman Christopher Cox and American Institute of Certified Public Accountants (AICPA) President Barry Melancon are the co-keynote speakers at the next XBRL International conference.

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