Pooling Issue Heats Up
Pooling is supposed to be a thing of the past next year, but accounting professionals from various industries are gathering around the issue. Professionals from companies such as PricewaterhouseCoopers and General Electric talked to the Financial Accounting Standards Board (FASB) last Thursday to make a plea for pooling-of-interests accounting.
Although FASB is willing to listen to corporations, the organization remains unimpressed with current suggestions. The rulemaking body’s focus is on ending the abuse that accompanies pooling for those companies looking to increase company value during a merger.
Accounting professionals argue that pooling should be kept for all-stock deals where the two merging companies are approximately the same size. FASB remains unfazed by the many suggestions that have come out of the recent New York and San Francisco hearings.
"Even though we've been trying, I don't think I've personally heard anything that provides us with a basis to make a distinction [for mergers of equals] yet," FASB Chairman Edmund L. Jenkins said during a break in the proceedings.
It is unlikely that the Board will change its mind. Under current guidelines, an acquirer must meet a dozen strict criteria before it is able to use pooling. However, several companies last year weren’t stopped from employing the method. The Board fears that if pooling is an option, it will become a “one size fits all” solution for companies “squeezing” into the criteria.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.