Earlier today (Aug. 8, 2008) a number of Financial Executives International’s (FEI’s) technical committees filed comment letters with the Financial Accounting Standards Board, voicing concern on FASB's proposal to change disclosures of contingencies, including litigation contingencies, set forth in FASB’s Exposure Draft, Disclosure of Certain Loss Contingencies – an amendment of FASB Statements No. 5 and 141(R).
As noted in a cover letter signed by Christine DiFabio, Vice President, Technical Activities at FEI, the following letters were included in FEI’s comment letters on FAS 5:
A joint letter of FEI’s Committee on Corporate Reporting (CCR) and Committee on Government Business (CGB); and
A letter from FEI’s Committee on Private Companies (CPC)
The joint letter submitted by FEI’s Committee on Corporate Reporting (CCR) and Committee on Government Business (CGB), signed by CCR Chair Arnold Hanish and CGB Chair Dale Wallis, notes, “CCR and CGB (“the committees”) are very concerned about the implications the ED will have, if finalized in or near its present form, on the accounting and disclosures of loss contingencies related to litigation; particularly the prejudicial effects these changes will have on ongoing and threatened litigation.”
The high level of concern regarding FASB’s proposal to change contingency disclosures is evident in the fact that financial executives representing 31 member companies signed onto the CCR-CGB letter, as shown on Exhibit I to the letter.
The separate letter filed by FEI’s Committee on Private Companies (CPC) was signed by William Koch, chair of CPC’s Standards Subcommittee.
FASB is posting comment letters received on its FAS 5 proposal here ; as of 2pm EDT Aug. 8, there were 69 comment letters posted, dated thru Aug. 7, 2008; it is not unusual for a rush of comment letters to come in on the deadline day (today).
Yesterday, we noted some highlights from comment letters filed by the American Bar Association, Association of Corporate Counsel, and Willkie Farr’s Michael Young.
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