Accounting standards

The Securities and Exchange Commission has published its long-delayed roadmap for the transition from U.S. generally accepted accounting principles to International Financial Reporting Standards.

A completely revised Form 990 will require an overhaul of internal policies and procedures for most tax-exempt organizations, according to Joyce Underwood, director of nonprofit taxation at BDO Seidman's Institute for Nonprofit Excellence.

Once again this year, the headline for the Alternative Minimum Tax is another one-year fix with no permanent solution. The Emergency Economic Stabilization Act of 2008 raised the AMT exemption amount for 2008 to $69,950 for joint filers and $46,200 for single filers. This represents another inflation-adjusted extension of the exemption amount designed to preserve the status quo and keep an additional 21 million taxpayers from being subject to the AMT in 2008. And, once again, without further action, the AMT exemption amount reverts to its pre-2001 level in 2009 unless further congressional action is taken.

In the current financial turmoil, what might help is a more presentable presentation of financial statements.

The Securities and Exchange Commission has charged Bernard L. Madoff and his company, Bernard L. Madoff Investment Securities LLC, with securities fraud for perpetrating an alleged multi-billion-dollar Ponzi-style fraud on their advisory clients. The SEC alleged that Madoff himself had described his firm as "a giant Ponzi scheme" that paid returns to certain investors out of principal from other investors, and that he had told two of his firm's senior employees last week, "It's all just one big lie." (According to The Wall Street Journal, the two senior employees were Madoff's sons.) The commission also said that Madoff had estimated that the losses from the fraud were at least $50 billion. "We are alleging massive fraud," said SEC Director of Enforcement Linda Chatman Thomsen. The commission noted that Madoff's company had $17 billion in assets at the beginning of 2008, according to regulatory filings, but that "virtually all assets of the advisory business are missing" now. According to a Bloomberg News report, Madoff's entire company was audited by a three-person accounting firm, Friehling & Horowitz, out of a tiny office in a New York city suburb -- a circumstance that so alarmed a hedge fund advisor that it warned clients away from investing with Madoff. Madoff, a former chairman of Nasdaq, was arrested by federal agents last Thursday morning, and released on $10 million bail, according to his lawyers. At the SEC's request, a federal judge appointed a receiver to secure the firm's accounts and assets.

The Securities and Exchange Commission has scheduled a vote for next Wednesday on whether to begin requiring companies to file financial statements in an interactive data format.

The Financial Accounting Standards Board has issued new standards that increase the disclosure requirements that public companies need to make about their financial asset transfers and variable-interest entities.

International Accounting Standards Board Chairman Sir David Tweedie said that the U.S. Financial Accounting Standards Board would still continue to play an important role in the standard-setting process, even after the transition to International Financial Reporting Standards in the U.S.

The College for Financial Planning plans to add renewal requirements to some of its professional designations starting next spring.

Accountants and banking industry officials hoping for looser financial reporting standards in response to the economic downturn received a reality check from the keynote speakers at the American Institute of CPAs’ National Conference on Current SEC/PCAOB Developments.

Accountants in the U.S. are increasingly starting to prepare for the transition to International Financial Reporting Standards, according to a new survey by the American Institute of CPAs.

The Financial Accounting Standards Board plans to introduce a new official accounting standards codification on July 1 that will supersede other sources, including the AICPA.

Securities and Exchange Commission Chief Accountant Conrad Hewitt intends to leave the agency in January.

XBRL US plans to soon publish an upgraded version of the Extensible Business Reporting Language interactive data tags for U.S. generally accepted accounting principles and is making the latest draft available for public review.

The American Bankers Association has written to Treasury Secretary Henry Paulson calling on regulators to make several immediate reforms to mark-to-market and fair value accounting rules before banks have to file their year-end financial statements.

Companies in the U.S. and Europe generally favor the move to International Financial Reporting Standards, but European companies are much more skeptical about the process.

The Public Company Accounting Oversight Board has approved a $157.6 million budget for calendar year 2009, a $13 million increase from the $144.6 million it approved for 2008.

Companies that are the subjects of Securities and Exchange Commission enforcement actions for financial fraud are more than twice as likely to go bankrupt as those that are not, according a study by Deloitte Forensic Center.

For those who couldn’t find the proposed roadmap released by the SEC when they went to the Commission’s site last week, don’t blame yourself. You need an actual roadmap to find it.

In the last of a series of roundtable discussions of mark-to-market accounting before issuing a congressionally mandated study, a panel of accounting experts told the Securities and Exchange Commission about the challenges of valuing assets in a rapidly sinking market.