FASB Issues FAS 147, Holds Roundtable on SPEs
by AccountingWeb on
The Financial Accounting Standards Board (FASB) issued Statement No. 147 on "Acquisitions of Certain Financial Institutions" and held a roundtable discussion on accounting for special purpose entities (SPEs).
- FAS 147. Statement 147 fills in one of the gaps left when FASB issued Statements No. 141, "Business Combinations," and No. 142, "Goodwill and Other Intangible Assets." The new standard revises portions of Statement 72, which was developed as a "practical solution" to avoid creating reported earnings from purchase accounting in times when interest rates were at historical highs and many financial institutions were reporting losses. An article written by FASB practice fellow Brian Degano answers frequently asked questions about the project.
- SPEs. Separately, on September 30, FASB held a roundtable discussion on accounting for special purpose entities. According to press accounts, opinion was divided on the need for a speedy resolution of the matter versus the need for a thorough review of the issues. Securities and Exchange Commission (SEC) Deputy Chief Accountant Jackson Day stressed the need for speed. But Stephen Brookshire, managing principal of Atlantic Financial Group, likened the standard-setting initiative to "taking a bazooka to bird-hunting." Other concerns focused on the proposed effective date of March 15, 2003, which coincides with SEC filing deadlines for calendar-year companies, along with the potential need to consolidate an SPE, then later deconsolidate it due to a change in investors. ("SEC: Imperative to finalize new SPE accounting rules by year-end," Wall Street Journal, September 30, 2002.)
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3 weeks 1 day ago by mucar1990