With the comment deadline falling yesterday, FASB has received at least a dozen comment letters so far on Proposed FSP FIN 48-d, Application Guidance for Pass-through Entities and Tax-Exempt Not-for-Profit Entities and Disclosure Modifications for Nonpublic Entities. The proposed FSP provides guidance for pass-through and not-for-profit entities to apply FIN 48, Accounting for Uncertainty in Income Taxes. Public companies adopted FIN 48 already, private companies received a number of deferrals so that FASB could respond to calls to provide further guidance on applying FIN 48 to pass-through entities.
When our blog post went to press, there were 11 comment letters posted on FASB's website. Additionally, FEI's Committee on Private Companies (CPC) Standards Subcommittee filed a comment letter earlier today (which is in the process of being posted to FASB's website; it is possible additional letters may be filed by others as well). The FEI CPC letter expresses the committee's appreciation for FASB's efforts with respect to private companies, supports the proposed FSP's reduced disclosure requirement, and recommends adding some clarifying language to the FSP.
Based on a quick review of the comment letters posted earlier today, some constituents (e.g. Comment Letter 3, AICPA PCPS TIC) generally believe the Proposed FSP provides sufficient guidance, others (e.g. Comment Letter 2, Ernst & Young, and the FEI CPC letter) believe there should be further clarification, and another letter (Comment Letter 11, Illinois Society of CPAs) reiterates that organization's prior call that private co's (also called 'non-issuers') follow FAS 5 rather than FIN 48.
Public companies began applying FIN 48 a couple of years ago. Private companies have been granted a series of deferrals of FIN 48, most recently on Dec. 30, 2008, when FASB issued FSP FIN 48-3, which deferred the effective date for private co's to the annual financial statements for fiscal years beginning after December 15, 2008, and it is to be applied as of the beginning of the entity's fiscal year. (Of note: Comment Letter 6, filed by PricewaterhouseCoopers states: "The FASB has proposed that the FSP be effective for all entities currently applying the provisions of FIN 48 upon its issuance. It is unclear how significant of an impact the guidance may have on entities already applying FIN 48. Given the expected issuance of the FSP in June 2009, we recommend that it be effective for periods ending after September 15, 2009 to allow entities time to appropriately consider and apply the guidance.")
Herz To Speak At National Press Club
In other news, FASB announced today that FASB Chairman Robert Herz will speak at the National Press Club in Washington, DC on June 26. According to FASB's press release: "Mr. Herz will provide his insights on the challenges created by the financial crisis—particularly regulatory reform—in a speech entitled History Doesn’t Repeat Itself, People Repeat History—Front-Line Thoughts and Observations on Creating a Sounder Financial System."
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