Financial reporting

The International Accounting Standards Committee Foundation's XBRL Team has released the near-final version of the IFRS Taxonomy 2008, translating International Financial Reporting Standards into Extensible Business Reporting Language.

BDO Consulting said it is forming a corporate advisory practice to provide strategic and financial consulting services to companies in distress.

CCH has introduced an online resource, FAS 157 Manager, designed to help accountants deal with the complexities of Financial Accounting Standard Statement No. 157 on fair value measurements.

On January 24, 2002, I gave a presentation, at the Large- and Medium-Sized Firms Practice Management Committee of the New York State Society of CPAs, entitled "Like the Energizer Bunny, the Enron Mess Keeps Going and Going." It seems I was right as Citigroup just settled a lawsuit in which it agreed to pay $1.66 billion to the Enron Bankruptcy Estate, which had filed bankruptcy and fraud claims against Citigroup in the United States Bankruptcy Court in New York.

Baruch College's Zicklin School of Business plans to introduce an executive master's degree program with a specialization in financial statement analysis and securities assessment, aimed at working professionals.

It’s often said that small business is the engine of the U.S. economy. If so, family businesses are of the high-performance, whisper-quiet, finely tuned kind, humming along at an impressive clip — even if there might be a few bumps ahead. But to stay on track and avoid breakdowns, family businesses would do well to schedule regular tune-ups with their financial professionals.That’s the snapshot of today’s family businesses that emerges from the 2007 Family Business Survey conducted by Massachusetts Mutual Life Insurance Co. in conjunction with the Family Firm Institute, and the Cox Family Enterprise Center at the Kennesaw State University Coles College of Business.

CFP BOARD REVISES ETHICSThe CFP Board of Standards has adopted a revised version of its Standards of Professional Conduct, which sets forth the ethical standards for CFP professionals.

The Financial Accounting Foundation’s board of trustees has voted to approve a range of sweeping changes in the oversight, structure and operations of the FAF and its two standards-setting boards — the Financial Accounting Standards Board and the Governmental Accounting Standards Board.The FAF plans to expand the number and breadth of investors, accounting, business, financial and government organizations and entities invited to nominate FAF trustees. Final authority for all the appointments will remain at the discretion of the board of trustees, who are responsible for the oversight, administration and finances for both of the standard-setting boards.

The Treasury Department has released its blueprint for overhauling the regulatory structure of the financial markets in an effort to cope with the crisis in the mortgage and credit markets.

R.R. Donnelley & Sons and Edgar Online have launched TryXBRL.com, a Web site that allows users to view and analyze financial statements tagged in Extensible Business Reporting Language from over 12,000 publicly traded companies.

New research from MassMutual Financial Group has revealed a surprising contrast in consumers’ confidence about retirement preparedness and their actual savings behavior that could help shape the next generation of retirement savings solutions. The study, conducted by Massachusetts Mutual Life Insurance Company (MassMutual), included responses from more than 17,000 individuals participating in some 2,300 employer-sponsored retirement savings plans administered by MassMutual’s Retirement Services Division. In examining the relationship between savings confidence and actual savings behavior, the study found that those who saved more and were active in managing their retirement savings actually were less confident in their retirement security and the retirement decisions they make compared to individuals with lower savings rates. A key finding showed that those who are more active in managing their retirement savings (79 percent) are also more eager for help and information about investments and investing versus those who are less active (47 percent). According to retirement experts at MassMutual, working with a financial professional may provide the kind of help these individuals want, as well as to help alleviate anxiety they may have regarding their investments for retirement. “Rather than just track what people are actually doing in terms of retirement savings, we are also deeply interested in the ‘Why,’” says Ian Sheridan, corporate vice president and chief marketing officer for MassMutual’s Retirement Services Division. “Our research shows that what individuals say and what they actually do are, at times, explicitly different.” Sheridan goes on to say that participants in the study were categorized as low, medium, and high savers based on their annual deferral rates of salary into a 401(k) savings plan. Low savers were those who deferred less than 4.0 percent, medium-savers between 4.0 percent and 7.99 percent, and high savers deferred 8.0 percent or more of their salaries. Individuals with the highest deferral rates said they enjoyed managing their finances more than the low and medium savers (57 percent of high savers versus 49 percent of medium and low savers). But, this fact notwithstanding, MassMutual said that those who take an active role in saving more and making investment decisions still lack confidence about those investment decisions and their financial security as they approach retirement. This is evidenced by the following findings:

Accounting firm BDO Seidman said corporate executives and board members should be prepared to address various questions about the effect of the credit market crisis on their companies at their upcoming annual shareholder meetings.

The Financial Accounting Standards Board has issued a statement intended to improve financial reporting on derivative instruments and hedging activities.

The International Accounting Standards Board has issued a discussion paper, "Reducing Complexity in Reporting Financial Instruments," intended to be the first step in developing principles-based standards that are less complicated than existing standards for reporting on derivatives and other investments.

As we all know from all of the hoopla, there are some 77 million Baby Boomers headed toward retirement. As a result, every facet of corporate pension plans will now be subject to deep analysis and probably change. Keep in mind that the decline in defined benefit plans and the rise in defined contribution plans, along with increased longevity of one’s life, have started to create a growing risk among employees about their retirement benefits. The Conference Board has just issued a report, Pensions and Retirement Conference, which delved into this topic and noted that as retirement benefits are redesigned for today’s retirees, it’s become unclear whether employer programs can support long-term financial security. “The changing definition of retirement raises controversial questions, especially from a societal point of view. What is the responsibility of the corporation to provide a safe and secure retirement for its employees? The evolving social contact between employees and employers has resulted in many issues that plan sponsors, policymakers, and academics need to resolve.” In short, the report is asking employees, who it believes should be seen as consumers, not investors, to take on significant risks that they haven’t a clue on how to manage. For one, the report sees a pension and retirement dilemma. It notes that many experts disagree over whether the new rules for defined benefit plans (see “Pension Protection Act of 2006”) will help stabilize the system or encourage more companies to curtail their plans. Keep in mind that as more companies discontinue their defined benefit plans, they’ll need to change their overall retirement programs so that they work more effectively for employees. You’ve then got a twofold risk here: (1) Employees could outlive their retirement income and experience a significant decline in their standard of living. Many people simply underestimate their life expectancy and overestimate how much money they can draw from savings. (2) Employees are investing more than they should in equities, due in part to the limited options for their defined contribution monies, inflation, and market volatility. Then, you have to take a gander at redefining retirement along with mitigating risk. Remember, today’s aging Baby Boomers are the best educated, healthiest, and longest-living group to ever entire retirement. According to Anna Rappaport, senior fellow on pensions and retirement for the Board, when surveyed, seven out of 10 people in this population say that they want to continue working in retirement. Given these new parameters, she notes that new definitions and innovative employment options must be created for this phase of life. She calls it the “third age.” Finally, she points out that policymakers, employers, and individuals need to rethink how retirement fits into the way people actually live their lives. For further information or to request a copy of the report, e-mail courter@conference-board.org.

Accounting firm Berkowitz Dick Pollack & Brant said its $50,000 contribution would help provide four-year college scholarships for 30 low-income at-risk children in Florida.

Sen. Joseph Lieberman, I.-Conn., has written a letter to the Internal Revenue Service asking for an explanation of its investigation of a speech by Sen. Barack Obama, D-Ill., at the United Church of Christ.

Seymour Mann, co-founder of Mann Frankfort Stein & Lipp Advisors, which later became UHY Advisors TX, has died at the age of 87, only a few weeks after announcing his retirement from the firm he co-founded in 1971.

When it comes to financial or retirement planning or wealth management, no two clients are even remotely alike. Each comes with a different level of existing investments or retirement plans; each has different life goals and a different appetite for risk.Sorting out these variables in a basic analysis of the client’s position is the first step toward crafting a cohesive and effective plan. Unfortunately, no single software package or tool kit can easily handle the full range of analysis that may be required, so the planner will generally require several different kinds of tools.

AICPA RELEASES ADVISOR GUIDEThe American Institute of CPAs and Fiduciary360 have published the U.S. edition of a handbook for investment advisors. Prudent Practices for Investment Advisors identifies 23 practices for advisors to follow. The book helps them manage risk by providing a recommended “checklist” for carrying out investment decisions with prudence and due diligence. The book was reviewed and edited by the Fiduciary Task Force of the AICPA Personal Financial Planning Executive Committee.