Thursday, December 23, 2010

Seidman Appointed FASB Chairman; FEI Applauds Appointment

Earlier today, the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board, named Leslie F. Seidman Chairman of the FASB. The appointment is effective immediately. Seidman had been serving as Acting Chairman of the FASB since the retirement of former FASB Chairman Bob Herz at the end of September. Read the FAF press release.

Financial Executives International issued the following statement applauding the appointment of Seidman as Chairman of the FASB:

"It is with great pleasure that FEI congratulates Leslie F. Seidman in her permanent appointment as Chair of the FASB. Ms. Seidman has been well regarded as a consensus builder over her several years with this important organization, bringing critical hands on experience in standards application. We believe that Ms. Seidman has done a remarkable job since taking on the role as Acting Chair in the fall of 2010. We are confident that she is well suited to lead the rest of the Board and work with organizations such as FEI to ensure the development of high quality accounting tandards during this critical time for global standard setting."
See FEI's press release.

Tuesday, December 21, 2010

FEI, Others Offer Condolences On Sudden Passing Of IFRS Foundation Chair, Tommaso Padoa-Schioppa

Tommaso Padoa-Schioppa, Chairman of the IFRS Foundation Board of Trustees, passed away suddenly on Saturday, December 18.

As reported in the New York Times in an article by Eric Sylvers yesterday:

Padoa-Schioppa, an economist and former Italian finance minister who was one of the driving forces behind the creation of the European Union’s single currency died Saturday in Rome. He was 70. Franco Bruni, a friend and professor of international monetary economics at Bocconi University here, said Mr. Padoa-Schioppa died from a heart attack suffered during a dinner he had organized for 100 friends
The IFRS Foundation Trustees issued this statement on December 19 regarding Padoa-Schioppa's sudden passing, including remarks of IFRS Foundation vice-chairmen Tsuguoki (Aki) Fujinuma and Robert Glauber, IASB Chairman Sir David Tweedie, and IFRS Foundation COO Tom Seidenstein. Among others offering their condolences were the Monitoring Board of the IFRS Foundation, the Financial Accounting Foundation (which oversees the FASB), and Financial Executives International (FEI).

FASB, IASB Receive Over 200 Comment Letters on Leasing Proposals

December 15 marked the comment letter deadline on FASB's Proposed Accounting Standards Update - Leases (Topic 840) and IASB's Exposure Draft: Leases.

Included among the over 200 comment letters received by FASB and the IASB on their proposed leasing standard(s) is a joint letter sent by FEI and five other professional associations on the IASB proposal. The letter, signed by President and CEO Marie Hollein, was addressed to Sir David Tweedie, chairman of the IASB, with a copy to Leslie Seidman, Acting Chairman of the FASB. In addition to FEI, the other organizations signing onto the letter were: the Equipment Leasing & Finance Association, the Finance & Leasing Association, the Japan Leasing Association and the U.S. Chamber of Commerce. Read more in the joint comment letter.

Separately, two FEI committees sent their own comment letters to FASB on its leasing proposal: FEI's Committee on Corporate Reporting, (FEI CCR letter) and FEI's Committee on Private Company Standards (FEI CPC-S letter).

Friday, December 3, 2010

Give A Little Bit

(Video credit: Rodger Hodgson (one of the original co-lead singers of Supertramp) performing "Give a Little Bit" live during Ottawa Bluesfest, 7/10/10, posted by 'Endlisnis' on YouTube. Song begins 2:08 into the video)

As accountants, finance professionals, legal and compliance professionals, and regulation-watchers, we tend to have our own way of thinking about things like:

But, there's another side to risks and uncertainties in our everyday world, outside our offices and in our communities, that relates to the uncertainty some people have over where their next meal will come from, whether they'll have a roof over their head that night, and other issues that gravely threaten their well-being, sometimes, seemingly, without a place to turn.

This is where, in addition to community and not-for-profit organizations struggling to meet these needs, some companies and associations encourage their employees (members) to voluntarily reach out to 'give a little bit' of time and/or financial resources to help those in need.

Numerous accounting and law firms, public and private companies, educational institutions, state societies of CPAs, bar associations, and other professional associations, encourage their employees and members to do volunteer work for the community throughout the year and especially during the holiday season.

We note below a voluntary initiative by FEI staff, along with a couple of other examples. Although you - our blog readers - tend to be the strong but 'silent type,' we invite you to post a comment noting what your organization is doing to encourage employee voluntarism of the financial kind or in-kind variety (e.g. pro bono work). You don't have to be highly specific if you need to maintain confidentiality, but we are looking to provide a forum to share ideas. Or, if you prefer, email me a brief blurb about what your firm/organization is doing, for consideration in a follow-up post.

FEI "Dress Down For A Good Cause"

Rudy Katzenberger, Manager, Accounting at FEI, and chair of FEI's Staff Activities Committee, explained that the idea for "Dress Down for a Good Cause" came as a follow-on to last year's voluntary clothing collection for the Market Street Mission, whose motto is 'meals, shelter, hope.'

"Having moved our office back to our Morristown Roots, we wanted to give something back to the community as a voluntary staff initiative," he said. "It also provides a 'bonding experience' for our staff to join together for a good cause, to help those in need."

"Dress Down for a Good Cause" invites FEI staff members to make voluntary donations of $5 a week from Thanksgiving through the end of the year, and for each week a donation is made, that staff member may 'dress down' (e.g. wear jeans to the office) on a particular day of the workweek.

Additional information about FEI can be found at , and additional information about the Market Street Mission can be found at .

Robert Half International Supports Boys and Girls Clubs
Joel Dibble, Public Relations Director, Financial Staffing Brands, Robert Half International, shared with us:

Robert Half International offices across the country are hosting holiday toy drives to benefit Boys & Girls Clubs and other nonprofit organizations. Please visit the Robert Half Facebook page for the list of participating offices. If you would like to donate a new unwrapped toy, please bring it to your local Robert Half International branch, or call the local contact to arrange a toy pick-up by an RHI representative

Eastern Michigan University - Academic Service Learning
Prof. Zafar Khan of Eastern Michigan University shared with us that in addition to promotining active faculty and staff participation in their local United Way program, EMU has a unique program called Academic Service Learning, described in brief as "a teaching methodology that utilizes community service as a means of helping students gain a deeper understanding of course objectives, acquire new knowledge, and engage in civic activity."

Happy Holidays to all of our readers. If you received this blog post from a 'friend' and would like to receive our blog by email, please send an email to and write in the Subject line: Sign Up.

How Many GAAPs Will We Have in 2012? Blue Ribbon Panel to Finalize Rec's on Pvt Co Std-Setting to FAF Next Week

As the SEC continues its consideration of whether to permit - or require - U.S. public companies to file their financial statements using International Financial Reporting Standards published by the International Accounting Standards Board, vs. the longstanding practice of using U.S. Generally Accepted Accounting Principles published by the Financial Accounting Standards Board, private companies, the users of their financial statements, their auditors, lenders and others, as well as standard-setting bodies, have raised the question of how private company GAAP should look in a potentially post-IFRS world.

IFRS for Small and Medium Sized Enterprises (IFRS for SMEs) was published by the IASB a couple of years ago to as a standalone set of IFRS to better meet the needs of private companies and users of their financial swtatements. (In plain English, I will loosely define 'private companies' as used in IFRS for SMEs as companies that are not listed on public stock exchanges and do not have 'public accountability' such as banks and other financial institutions; refer to the IFRS for SMEs document for the precise definition of entities that fall in the scope ofo SMEs.)

Canada, which is on its way to adopting IFRS (i.e., public companies adopting IFRS as of Jan. 1, 2011; see related FEI Canada Research Foundation report on IFRS readiness published Aug. 2010) decided to issue a separate set of standards for private companies.

In the U.S., the FASB-AICPA Private Company Financial Reporting Advisory Committee - which is meeting this week, recommended to the Financial Accounting Foundation (FAF - overseer of the FASB) that the future of financial reporting for private companies in the U.S., including the related standard-setting model, be considered, particularly in light of the potential move to IFRS for public companies. Here is the agenda for this week's PCFRC meeting, which includes a joint meeting with FASB's Small Business Advisory Committee.

Blue Ribbon Panel on Private Co's ToFinalize Rec's to FAF
As previously reported (see FAF press release, and FEI blog post), at its October, 2010 meeting, the Blue Ribbon Panel indicated a preference for a new standard-setting model for private company generally accepted accounting principles, with a separate private company standards board. The new board, like the Financial Accounting Standards Board and the Governmental Accounting Standards Board, would be under the oversight of the Financial Accounting Foundation.

At next week’s (December 10) Blue Ribbon Panel Meeting (as noted at the conclusion of their October minutes):
“the panel members would be reviewing and discussing a draft report with the panel’s majority recommendation and minority views. [Mr. Anderson, Chair of the
Blue Ribbon Panel and Chairman and CEO of audit firm Moss Adams], Mr. Atkinson
[NASBA Chair], Mr. Melancon [AICPA President and CEO] and Ms. Polley [FAF
President and CEO] agreed that further discussion of the logistics and
operationality of the separate private company board would be needed at the
December meeting before the recommendation(s)/report could be finalized and
issued in January to the FAF trustees.”
The public portion of the Dec. 10 Blue Ribbon Panel meeting will be webcast; here is the agenda; meeting materials will also be posted.

Wednesday, December 1, 2010

Priorities Listed, and Feedback Counts, FASB, IASB Note in 3rd MOU Convergence Update

In their 3rd Progress Report - published earlier this week - on the status of convergence projects outlined in their Convergence MOU (Memorandum of Understanding), the FASB and IASB list the 'priority' projects which are still slated for completion by June 2011 'if not sooner,' note lesser priority projects deferred, and emphasize that feedback from stakeholders is important as they complete these projects.

Priority Projects Slated for Completion by June, 2011

The progress report lists these projects as priority projects slated for completion by June, 2011:

  • financial instruments,

  • revenue recognition,

  • leases,

  • the presentation of other comprehensive income, and

  • fair value measurement.
Additional projects which the IASB targets to complete by June 2011 'if not sooner' include:
  • improved disclosures about derecognised assets and other off-balance-sheet risks (aligning with recently issued US GAAP requirements),

  • consolidations (particularly in relation to structured entities) and

  • insurance contracts.

Deferral of Lesser Priority Projects

The MOU Progress Report reiterates decisions on deferring certain lesser priority projects, listed below, in order to focus the boards' resources on completing the priority projects by June, 2011. (We previously reported on some of these deferral decisions here and here.)

The deferred joint projects include:

  • the broader financial statement presentation project,
  • financial instruments with characteristics of equity,
  • emissions trading schemes, and
  • the reporting entity phase of the conceptual framework
  • consolidation of investment companies
  • contingency disclosures (relating to FAS 5 and IAS 37).

The joint progress report states:

Even with those work plan changes, completion of the priority projects requires
a focused and intense effort by both us and our stakeholders. Our commitment is
to the development of high-quality, improved, and converged standards developed
using robust due process.

Feedback Counts
No matter what stakeholder category you fall into (investor, lender, preparer, auditor, board member, other), it is worth taking note of the fact that the boards actively seek your input as they continue to march down what I'll call 'Convergence Road,' to June, 2011.

As stated in the just-issued Progress Report:

The feedback that we have received (and will continue to receive) through comment letters and other outreach efforts is being considered carefully and will determine the focus of our redeliberations and other steps and efforts that will be required to finalise new standards. We are committed to conducting additional outreach during the redeliberations period, as necessary, to ensure the quality and effective implementation of the final standards.