Accounting standards

The Financial Accounting Standards Board has provided new flexibility to allow banks and other financial institutions to reprice their assets during the credit crisis by amending its standard on fair value measurements.The FASB Staff Position clarifies the application of FASB Statement No. 157 in an inactive market and provides an illustrative example to demonstrate how the fair value of a financial asset is determined when the market for that asset is inactive.

One (and possibly the only) positive result of the financial crisis is that market value accounting has been brought to the public's attention.Unfortunately, most discussions of this issue have generated much more heat than light. For instance, we've noted that many who criticize value-based accounting don't begin to understand its advantages over other asset and liability measures. We want to explain the theory behind it, which is how we came to be convinced that all the trouble of switching to values will be worthwhile. This perspective has helped us see that most criticisms of market value are transparent attempts to deflect blame away from managers who made poor investment decisions.

Accounting schools are scrambling to stay ahead of the IFRS curve.

The Private Company Financial Reporting Committee discussed FIN 48, fair value and other matters at its latest meeting.

The Financial Accounting Foundation advised President Bush and other U.S. and world leaders attending the G-20 summit to safeguard fair value accounting and the independent standard-setting process in a strongly worded letter.

The Securities and Exchange Commission charged network security company Blue Coat Systems and its former CFO, Robert P. Verheecke, with allegedly backdating stock option grants and reporting false financial information, and he has settled the charges for $185,000.

The Center for Audit Quality defended the use of fair value accounting in a letter to the Securities and Exchange Commission as the standard comes under attack from banking interests.

International Accounting Standards Board Chairman Sir David Tweedie said he nearly resigned before giving in to pressure from European regulators to modify fair value accounting standards to allow banks to reclassify their assets.

The International Accounting Standards Committee Foundation has written a letter to President Bush asking him and other world leaders to respect fair value accounting and the standards-setting process.

The American Institute of CPAs has written to the Securities and Exchange Commission urging it to allow the Financial Accounting Standards Board to continue to set standards for mark-to-market accounting.

President-elect Barack Obama is looking for a new chairman of the Securities and Exchange Commission to replace departing chair Christopher Cox.

The Securities and Exchange Commission is expected to publish the long-delayed roadmap for transitioning to International Financial Reporting Standards on Friday.

The American Institute of CPAs’ Fall Council meeting in October focused on the state of the economy, a proposal to internationalize the CPA credential, distinguished service awards and welcoming the upcoming year’s new chairman of the board.

The Securities and Exchange Commission and the North American Securities Administrators Association said they would waive for nine months the initial set-up and annual renewal fees paid by investment adviser firms to join their registration system.

The International Accounting Standards Board has issued educational guidance from an expert advisory panel on the controversial issue of fair value measurement when markets become inactive.

American Institute of CPAs president and CEO Barry Melancon defended fair value accounting standards at a securities industry conference, but admitted the standards could be improved.

Fair value under fire Financial crisis spurs debate over standardAs the financial community scrambles to regain the trust of investors angered by the Wall Street crisis, fair value accounting continues to come under fire.

The financial rescue plan approved by Congress included many extensions of expiring tax credits and deductions that helped it win passage in the House, but it also left out some tax issues that will surely be bones of contention for the next Congress."It's safe to predict that not much will happen in a lame duck session," said Tom Ochsenschlager, vice president of taxation at the American Institute of CPAs.

In what can be seen as a cruel irony in the midst of the current financial crises, the Financial Accounting Standards Board has issued a proposed staff position - 144-d, Amending the Criteria for Reporting a Discontinued Operation.The proposal, issued as an exposure draft, redefines "discontinued operation" and matches a simultaneous proposal issued by the International Accounting Standards Board. The proposals also establish identical new disclosure requirements. The new definition would no longer include certain subsidiaries and asset groups.

Optimism among CFOs about the U.S. economy and their own companies fell precipitously in the third quarter, according to a new survey.