Codification Nation

A defining moment in the history of U.S. GAAP (Generally Accepted Accounting Principles) was made on June 29, when the Financial Accounting Standards Board released FASB Statement No. 168, entitled, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting. FAS 168 represents the last numbered standard to be issued by FASB under the old (pre-Codification) numbering system, and amends the GAAP hierarchy to set the stage for a watershed moment - the July 1 launch of FASB’s Codification (full name: the FASB Accounting Standards Codification TM.) The Codification will supercede existing GAAP for nongovernmental entities; governmental entities will continue to follow standards issued by FASB's sister organization, the Governmental Accounting Standards Board (GASB).

As noted in the Summary provided at the beginning of FAS 168: "Following [issuance of] this Statement, the Board will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates. The Board will not consider Accounting Standards Updates as authoritative in their own right. Accounting Standards Updates will serve only to update the Codification, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the Codification."

Launch Date vis-a-vis Effective Date
FASB has publicized since Dec. 4. 2008 the Codification will be officially launched on July 1, following the one-year verification phase that began on Jan. 15, 2008. The Codification is a reorganization of existing GAAP, aimed at making it simpler to use, and the FASB board has stated they do not anticipate the Codification will change existing GAAP, with the exception of a particular revenue recognition issue for private companies noted below.

The Codification was originally anticipated to be carry an ‘effective date’ of July 1, but FASB agreed to clarify the effective date, as noted in this June 3 FASB press release, as follows:

The Financial Accounting Standards Board (FASB) today voted to approve the FASB Accounting Standards CodificationTM as the single source of authoritative nongovernmental U.S. Generally Accepted Accounting Principles (GAAP) to be launched on July 1, 2009. The Codification will be effective for interim and annual periods ending after September 15, 2009, which means that preparers must begin to use the Codification for periods that begin on or about July 1, 2009. All existing accounting standard documents are superseded. All other accounting literature not included in the Codification will be considered nonauthoritative.

Paragraph A14 of FAS 168 adds on this point:

The Board decided that this Statement should be effective for financial statements issued for interim and annual periods ending after September 15, 2009…In the Board’s view, an extended transition period is not necessary for this Statement because it is not expected to change GAAP and constituents have been able to access and use the Codification since January 2008. Respondents to the Exposure Draft were generally supportive of the proposed effective date, which was July 1, 2009. To clarify when this Statement should be applied and to provide additional time for constituents to update their financial statement disclosures, the Board decided to revise the effective date to interim and annual periods ending after September 15, 2009.

Not Expected To Change GAAP, Except One Area For Private Co’s
FASB states in the introductory pages to FAS 168: “In the Board’s view, the issuance of this Statement and the Codification will not change GAAP, except for those nonpublic nongovernmental entities that must now apply the American Institute of Certified Public Accountants Technical Inquiry Service Section 5100, “Revenue Recognition,” paragraphs 38–76.”

Transition provisions for nonpublic, nongovernmental entities impacted by the specific change regarding revenue recognition are provided in FAS 168, para. 14 as follows: "Those entities shall account for the adoption of that guidance as a change in accounting principle on a prospective basis for revenue arrangements entered into or materially modified in those fiscal years beginning on or after December 15, 2009, and interim periods within those years. If an accounting change results from the application of that guidance, an entity shall disclose the nature and reason for the change in accounting principle."

More generally, with respect to transition, FAS 168, paragraph 16 states: “Except as described in paragraph 14, any effect of applying the provisions of this Statement shall be accounted for as a change in accounting principle or correction of an error, as applicable, in accordance with FASB Statement No. 154, Accounting Changes and Error Corrections (Section 250-10-50 of the Codification). An entity shall follow the disclosure requirements of Statement 154 and disclose the accounting principles that were used before and after the application of the provisions of this Statement and the reason that applying this Statement resulted in a change in accounting principle or correction of an error."

GAAP vis-a-vis SEC Rules
FAS 168, para. 6 notes that "Rules and interpretive releases of the SEC under federal securities laws are also sources of authoritative GAAP for SEC registrants." Para. 7 adds, "In addition to the SEC’s rules and interpretive releases, the SEC staff issues Staff Accounting Bulletins that represent practices followed by the staff in administering SEC disclosure requirements, and it utilizes SEC Staff Announcements and Observer comments made at Emerging Issues Task Force (EITF) meetings to publicly announce its views on certain accounting issues for SEC registrants."

According to para. 8 of FAS 168: "Content contained in the SEC Sections of the Codification is provided for convenience and relates only to SEC registrants. The SEC Sections are not the authoritative sources of such content and do not contain the entire population of SEC rules, regulations, interpretive releases, and staff guidance. Content in the SEC Sections is expected to change over time, and there may be delays between SEC and staff changes to guidance and Accounting Standards Updates. The Codification does not replace or affect guidance issued by the SEC or its staff for public entities in their filings with the SEC."

Bright Lines and Analogies
(I couldn't help humming Jim Croce's "Photographs and Memories" when I wrote that subtitle...) Some may view the Codification as adding certain bright lines, others will recognize that certain principles-based approaches such as use of analogies in certain circumstances are still permitted.

For example, para. A15 of FAS 168 states: "The Board received feedback from constituents about accounting changes resulting from replacing the term should with shall and the removal of generic terms, such as usually, generally, ordinarily, and similar terms from accounting and disclosure requirements included in the Codification. In the Board’s view, the removal of such terms further clarifies that a particular standard must be followed. If an entity believes such a modification would result in an accounting change, the Board believes the entity should evaluate the matter to determine whether the change should be accounted for as an accounting change or as a correction of an error in accordance with Statement 154."

Separately, paragraph 9 of FAS 168 states: "If the guidance for a transaction or event is not specified within a source of authoritative GAAP for that entity, an entity shall first consider accounting principles for similar transactions or events within a source of authoritative GAAP for that entity and then consider nonauthoritative guidance from other sources. An entity shall not follow the accounting treatment specified in accounting guidance for similar transactions or events in cases in which those accounting principles either prohibit the application of the accounting treatment to the particular transaction or event or indicate that the accounting treatment should not be applied by analogy." Paragraph 10 then describes 'nonauthoritative' sources of GAAP.

Additional Considerations
Refer to this FEI Summary for a discussion of additional considerations with respect to the Codification, including as relate to:

• Errors in previous accounting
• Unintended changes or questions
• Industry practice
• Concepts Statements

Additional information on FASB's Codification can be found in FASB’s Codification Resources, which includes links to archived webcasts, “Countdown to Codification Alerts,” subscription information, and more. Access/pricing, and more. A particularly useful document for a quick, general understanding of the role of the Codification can be found in the Codification FAQs, which, among other things, notes that "the Codification will assist the FASB with the research and convergence efforts required during the standard-setting process," and that "[t]he FASB is working with the IASB to determine the role of the Codification in a converged accounting world."

READ MORE - Codification Nation

Madoff Sentenced To 150 Years

Earlier today, self-admitted Ponzi schemer Bernard L. Madoff was sentenced by U.S. District Judge Denny Chin to a 150-year sentence, the maximum for the charges he was convicted on. As reported in TheDeal.com's Madoff Gets the Max, by Donna Block:

"Ira Sorkin, Madoff's defense attorney, argued for a 12-year sentence, but
Madoff's victims urged Chin to impose the stiffest of penalties. Chin pushed
aside assertions of remorse and rejected the suggestion from Madoff's lawyers
that there was a sense of 'mob vengeance' surrounding calls for a long prison
term. 'Objectively speaking, the fraud here was staggering,' the judge said. 'It
spanned more than 20 years.'"

Block added, "After the sentencing, victims interviewed on CNBC asked the district attorney of New York and the Federal Bureau of Investigation to continue a much more thorough investigation of the feeder funds and others who worked with Madoff." TheDeal.com noted that AmericanLawyer.com was live blogging the proceedings.

TheAmLawDaily's post at 11:40 am, 150 Years for Madoff, by Brian Baxter, includes some powerful quotes from Judge Chin:

"I simply do not get the sentence that Mr. Madoff has done all that he could or
told all that he knows," Chin said. As it became clear that Madoff's scheme was
unraveling, Chin cited the jewelry Madoff mailedto family members and other
disbursements made to those close to him. Chin says he didn't agree with the
position of Madoff's lead counsel, Ira Sorkin, that victims were seeking "mob
justice." By any monetery measure, Chin called Madoff's fraud 'unprecedented.'
"The breach of trust was massive--individuals, charities, pension funds,
institutional clients--were all repeatedly lied to when told their [assets] were
in stock when they weren't," Chin said. "Investorsmade important life decisions
based on these fictitious account statements. Madoff also repeatedly lied to the
SEC and other regulators by creating false documents to cover up his scheme....
Chin also noted that not a single letter had been submitted by friends for
family members attesting to Madoff's support of charitable endeavors. Chin
called the absence of such letters and endorsements 'telling.' "

David Glovin, Patricia Hurtado and Thom Weidlich of Bloomberg reported in Madoff Gets 150 Years for Epic Fraud, that Madoff's 150-year sentence was "six times longer than the penalties meted out to the chief executives of WorldCom Inc. and Enron Corp."

As reported by Jack Healy of The New York Times, in Madoff Sentenced to 150 Years for Ponzi Scheme,

"Madoff himself stood up from the defense table to acknowledge the damage he had
inflicted and express regret. “I’m responsible for a great deal of suffering and
pain, I understand that,” the 71-year-old financier told the court. “I live in a
tormented state now, knowing all of the pain and suffering that I’ve created.
I’ve left a legacy of shame, as some of my victims have pointed out, to my
family and my grandchildren.” Addressing his victims seated in the courtroom, he said: “I will turn and face you. I’m sorry. I know that doesn’t help you.”

As noted in the Bloomberg article, Madoff told the Judge, “I don’t ask for any forgiveness." The Bloomberg article adds that Irving Picard, appointed Trustee for Bernard L. Madoff Investment Securities, filed a letter with the court stating he had received no meaningful cooperation from Madoff. The Bloomberg writers add, "The courtroom burst into applause as Chin imposed the sentence."

AmLawDaily's Baxter reported this afternoon, in his post The Hearing Wraps, that, "Everyone seems to be in a state of shock about Judge Chin giving Madoff the maximum sentence allowable under the law. The general consensus outside the coutroom this morning was that Judge Chin would give Madoff something along the lines of a Bernard Ebbers or Sam Israel verdict of 25-to-30 years in prison. Far from it."

As Baxter noted in his earlier post when the 150-year sentence was meted out, Judge Chin observed, "This is not a bloodless financial crime that just takes place on paper, but one that takes an enormous human toll." Chin added, according to AmLawDaily, "Symbolism is important not only to send a message that individuals will be sentenced to the fullest extent under the law . . . but also for the victims," who he noted include "the rich and not-so-rich."

READ MORE - Madoff Sentenced To 150 Years

Say, Say, Say, Say-on-Pay

I had shared with a fellow blogger (Broc Romanek of TheCorporateCounsel.net) last month that I had a certain video in mind to use in a post on Say-on-Pay; I had planned to use it when proposed legislation or regulation was a little farther along, but in light of recent events – the sudden passing of Michael Jackson at age 50 last week - I have decided to use the video (with apologies to Jim Peterson, author of the Re: Balance blog) and write about this topic today.

To recap (Say-on-Pay, not MJ – for that check other news sources):
On June 10, U.S. Treasury Secretary Timothy Geithner announced the administration’s plan for reforming executive compensation practices. He emphasized the government was not going to cap the level of pay or prescribe how pay should be determined, but rather set certain requirements relating to corporate governance and disclosure. The five principles on which reform should be based, he said, are:

1. compensation plans should properly measure and reward performance. For example: “performance based-pay should be conditioned on a wide range of internal and external metrics, not just stock price.”
2. compensation should be structured to account for the time horizon of risks. For example: “companies should seek to pay top executives in ways that are tightly aligned with the long-term value and soundness of the firm. Asking executives to hold stock for a longer period of time may be the most effective means of doing this, but directors and experts should have the flexibility to determine how best to align incentives in different settings and industries.”
3. compensation practices should be aligned with sound risk management. For example: “compensation committees should conduct and publish risk assessments of pay packages to ensure that they do not encourage imprudent risk-taking.”
4. golden parachutes and supplemental retirement packages should be reexamined as to whether they align the interests of executives and shareholders.
5. transparency and accountability in the process of setting compensation should be promoted.

Geithner added, “We intend to work with Congress to pass legislation in two specific areas:

• we will support efforts in Congress to pass "say on pay" legislation, giving the SEC authority to require companies to give shareholders a non-binding vote on executive compensation packages. "Say on pay" – which has already become the norm for several of our major trading partners, and which President Obama supported while in the Senate – would encourage boards to ensure that compensation packages are closely aligned with the interest of shareholders. See Treasury’s Say on Pay Fact Sheet.
• we will propose legislation giving the SEC the power to ensure that compensation committees are more independent, adhering to standards similar to those in place for audit committees as part of the Sarbanes-Oxley Act. At the same time, compensation committees would be given the responsibility and the resources to hire their own independent compensation consultants and outside counsel. See Treasury’s Comp Committee Independence Fact Sheet.

In remarks the same day (June 10), SEC Chairman Mary Schapiro said: “We will be considering several proposals requiring greater disclosure about:

• how a company — and its board — manages risks.
• a company’s overall compensation approach
• potential conflicts of interest by compensation consultants. As part of this, she explained, “the SEC may require disclosure of relationships between the consultants and the company and their affiliates, so both compensation committees and investors will be better able to assess the advice the consultants provide.”
• director nominees, including their experience and qualifications to serve on the board or on particular board committees — and about why a board has chosen its particular leadership structure

On June 11, the House Financial Services Committee held a hearing on Compensation Structure and Systemic Risk. Testifying at that hearing were representatives of the Fed, Treasury and SEC, as well as numerous experts on compensation, corporate governance and investor advocacy. Michelle Leder of Footnoted.org was among those who live tweeted from that hearing.

Last week, the SEC published a Sunshine Act Notice announcing it will hold an open Commission meeting this Wednesday, July 1, at which the Commission will consider various proposals that relate directly and indirectly to Say-on-Pay. Specifically, the Commission will consider at its meeting this week:

• whether to propose amendments to the proxy rules under the Securities Exchange Act of 1934 to set forth requirements for U.S. registrants that have received financial assistance under the Troubled Asset Relief Program and that are required, pursuant to Section 111(e) of the Emergency Economic Stabilization Act of 2008, to include an advisory shareholder vote on executive compensation.
• whether to propose amendments to rules under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 to enhance the disclosures that registrants are required to make about compensation and other corporate governance matters, and to clarify certain of the rules governing proxy solicitations.
• whether to approve the proposed rule change, as modified by Amendment No. 4, filed by the New York Stock Exchange, Inc. to amend NYSE Rule 452 and corresponding Listed Company Manual Section 402.08 to eliminate broker discretionary voting for the election of directors, except for companies registered under the Investment Company Act of 1940, and to codify two previously published interpretations that do not permit broker discretionary voting for material amendments to investment advisory contracts with an investment company.

Based on the language in Geithner's June 10 statement, noting that the Obama administration will "support efforts in Congress to pass "say on pay" legislation, giving the SEC authority to require companies to give shareholders a non-binding vote on executive compensation packages," the action being taken this week by the SEC is likely the tip of the iceberg, by focusing on TARP recipients which are now required by law to provide say-on-pay. For more insights into the developments on Say-on-Pay, see TheCorporateCounsel.net Blog, particularly Broc Romanek's post on June 25, and his colleague Dave Lynn's post on June 11. See also Ted Allen's June 10 post in The RiskMetrics Group Blog.

In related news, a new organization was announced last week, Shareowners.org, self-described as a "social networking site... working to help promote market fairness for investors." The organization's June 25 press release noting their formation also provides highlights from a recent survey conducted by Opinion Research Corp which showed, among other things, that 77% of the 1,256 U.S. investors surveyed favor say-on-pay.

READ MORE - Say, Say, Say, Say-on-Pay

Panels On Reg Reform, XBRL, at MdBizExpo

We just posted two summaries of panels I observed at the Maryland Association of CPAs (MACPA) Maryland Business Expo: Panel Addresses Regulatory Reform: The New World Order , and XBRL Panel Says Don't Put Off Planning, Take Responsibility. FEI's former President and CEO Colleen Cunningham spoke on the regulatory reform panel, and two FEI members - Ken Kelly of McCormick and Bob Laux of Microsoft - participated on the second panel. I was pleased to participate on the Social Media Panel at MdBizExpo with, (l-r) Will Burns of the Maryland Chamber of Commerce, Bill Sheridan of MACPA, Rick Telberg of CPA Trendlines, Alexandra DeFelice of the AICPA, and Francine McKenna of Re: The Auditors. For more reporting from MdBizExpo, see McKenna's June 21 post in her Re: The Auditors Blog, Accountants and Social Media Dream Panel , and Sheridan's post June 18 in MACPA's CPA Success Blog. Even more information has been archived at www.mdbizexpo.com. FEI Baltimore Chapter was an association sponsor of the conference, here's FEI Baltimore Chapter President Don McConnell greeting people at the FEI booth in the Exhibit hall.

READ MORE - Panels On Reg Reform, XBRL, at MdBizExpo

FASB's Herz Speaks About Principles, Politics In Remarks At National Press Club

In a speech at the National Press Club on June 26, 2009, Financial Accounting Standards Board Chairman Robert Herz outlined 4 major principles that he believes should guide financial regulatory reform. He noted threats to those principles include 'politicization' of accounting by 'special interests;' however, he acknowledged, "we certainly welcome active dialogue with lawmakers," and noted, "our system works because people advocate their causes."

Noting he believes "significant reforms are needed," Herz said the primary objective of financial regulatory reform should be to build "building a solid and sustainable platform for sound and stable economic growth through properly functioning financial markets that maintain public confidence in our system and our way of life.” The principles on which such reform should be based, said Herz, include transparency, infrastructure, balance/fairness, and global context.

Following his prepared remarks, Herz responded to questions posed by National Press Club President Donna Leinwand, a reporter with USA Today, selected from questions posted online and by attendees at the program. We provide highlights below from Herz' prepared remarks and a few of the questions raised during the Q&A.

Transparency [includes discussion of politics, independence, and fair value (mark-to-market)]
Herz described transparency as a fundamental principle. "Relevant, trustworthy, and timely information is the oxygen of financial markets," said Herz. "Depriving markets of such information—or polluting the information—can have very adverse consequences."

He noted concern about political influences on accounting standard-setting, such as by "certain major companies—including ones that subsequently failed and had to be rescued by the government—and industry trade groups that have sought political intervention into accounting standard setting." He continued, "While that is their right, and while we certainly welcome active dialogue with lawmakers, politicization of accounting standard setting by special interests risks undermining public confidence in the integrity of financial reporting. "

During the Q&A that followed, National Press Club President Donna Leinwand asked Herz, "You didn't name names when you accused major companies and trade groups of politicizing accounting standards... In the interest of disclosure and transparency, please name names."

After a general response, (see below) Herz replied, "I'll give you one good example, a three-letter insurance company that begins with A and ends with G." He detailed that former AIG CEO Marty Sullivan visited Capitol Hill "trying to convince lawmakers there were no problems with the credit default swaps that they had entered into, that it was all this bogus fair value accounting. And, of course, we're now as taxpayers some $150 billion-plus into AIG. There were real problems there. And in fact, the accounting was really the first sign to alert people that there were problems there."

Notably, before Herz responded with specifics to this question, he responded generally, "Our system works because people advocate their causes. We have a very important public policy mission, and that's good reporting to investors in the capital markets. So I understand, I don't welcome it, but I understand that people will, in what they view to be their interest, will try to get the answer they want. And if they don't get the answer they want from us or from the SEC... they take their views off into Congress. And our role is to explain to Congress why we're doing things, what we're doing and why it makes sense."

As to industry groups, Herz said, "There are trade groups that represent financial institutions, a number of them that... have views that the accounting ought to be one way or the other, particularly in dislocated markets. That was part of the hearing in March, and again I'm not going to tell them to stop that."

However, he added, "[T]he risk is that the perception can be if too much of that goes on, that it does make people think that... the politics are to bend the accounting rules. And that is dangerous because, in fact, we kind of create the rule or bending the rule is not appropriate."

Separately, Leinwand asked Herz, "What is your reaction to the recent charges by ITAC [FASB's Investor Technical Advisory Committee] that FASB has lost its independence?" (See ITAC's June 15 letter to the Financial Accounting Foundation, parent of FASB, which noted concern about FASB being pressured in a Congressional hearing on mark-to-market accounting on March 12, after which FASB issued additional guidance on mark-to-market (fair value) accounting in early April.)

Herz replied, "I think we believe pretty strongly that we responded to genuine issues in the system in a very highly responsible manner." Significantly, he added, "I think that it's important to distinguish between a correlation of events and causation of those particular events." He proceeded to explain the extensive due process entered into by FASB in arriving at the fair value guidance issued in April.

Leinwand later asked: "How can assets be correctly marked to market if there is no market, no transactions, no fair market pricing, a situation of total market paralysis?"

Herz replied: "That is at the core of some of the more thorny issues that have arisen over the past year. There are transactions going on for most things; but, they may be very inactive and it's not clear always who the parties are and what their motivations are, and whether they're distressed sellers, and the like." He noted "The famous Statement 157, which by the way did not introduce fair value, did not increase the use of fair value - fair value's been around for time immemorial; and the idea of marking assets down when there's bad times has been around probably for centuries. But, the problems are that we've now got - what was unexpected - was that we had all these structured securities and complex derivatives and everything was fine until people started to understand what was backing them up; i.e., mortgages, other things related to the economy, to housing, and when that all became evident and the housing market turned, the music stopped. Much less volume, the process went way down. People were less willing sellers and the like. Now, that is what we call a level three valuation, just to get technical here. Meaning that there are not a lot of observable transactions happening. And our standard covers level three."

He summed up, "Level three traditionally was meant for, in some cases, very exotic derivatives, but more usually things that for which there are not liquid markets, like intangibles. And there are well-worn techniques for that, but the issue then has been kind of making those portable in a much broader scenario of trillions of dollars of securities that all of a sudden unexpectedly became illiquid."

Herz was also asked during the Q&A if he believed the Obama administration's proposals regarding accounting standards [contained in the U.S. Treasury Department's June 17 report, Financial Regulatory Reform, A New Foundation] represented a politicization of accounting. He replied, "I don't view those as politicization of accounting. There's some recommendations in there towards the tail end that were actually included in the recent G20 declaration," adding, "I think they're consistent with a lot of the things we're doing directionally."(See related question under Global Context, below.)

Additionally, Herz spoke of the need for "additional systemic actions by others ... to improve disclosures and transparency at other levels—particularly those relating to the complexities and risks inherent in financial products, and to the information systems around the markets for structured securities and derivatives," adding, "transparency to the American public around taxpayer funded investments and financial support of major U.S. companies is also essential."

Infrastructure
Herz recommended strengthening the infrastructure, ranging from enhanced clearing platforms, to increased disclosure that would enable price discovery, to improved regulation, which he said currently suffers from ‘balkanization’ in the U.S. and globally. He also noted the need for more attention to risk management by all parties, including financial institutions and investors. Additionally, Herz noted securities and accounting standard setters have different objectives than banking regulators, adding that while “the goal should be to promote a close working bond… I would be supportive of a greater decoupling between the determination of bank regulatory capital and our standards.”

Balance/fairness
Herz cautioned about the ‘too big to fail’ principle and about ‘perverse incentives’ of executive compensation. “Don’t get me wrong,” said Herz, “I am not in favor of the government setting and enforcing specific pay levels or pay limits in the private sector. But the investing public needs to see that the private sector is effectively addressing this issue either through continued improvements in transparency and corporate governance around executive compensation or by other means.”

Global context
Herz observed, “This crisis has been global in scale and clearly demonstrated the many linkages between financial markets and economies around the world. It has also revealed the problems that can result from regulatory gaps and differences in regulation across international financial markets."

He spoke of the need for coordinated efforts, adding, "while the prospect of having a single global capital markets regulator or a single set of regulatory rules across the international capital markets is not, in my view, a realistic prospect in the foreseeable future, much can be achieved through continued focus by groups such as the G20, the International Organization of Securities Commissions, the Basel Committee and the Financial Stability Board to develop solutions to regulatory problems in global financial markets.”

Leinwand asked: "With the Obama Administration's recommendations that we move toward a global set of financial statements, when do you think full adoption of convergence will occur? Do you think the U.S. will follow the SEC's roadmap?"

In my view, Herz sidestepped the timing question somewhat, noting that as far as the prospects for U.S. adoption of the SEC's proposed 'IFRS Roadmap" - on which SEC received over 200 comments - is concerned, "The ball's really now in their [SEC's] court to decide what to do to go forward." However, any perceived sidestep (i.e. not committing to when full convergence may occur) may have been because the question from the press combined two separate issues from a technical standpoint, i.e. by combining the terms "full adoption" and "convergence' in the same sentence. If one reads "full adoption" as implying adoption of a separate set of standards - International Financial Reporting Standards (IFRS) as promulgated by the International Accounting Standards Board (IASB) - which is the subject of the SEC's IFRS Roadmap, that is, as Herz noted, up to the SEC. However, the question of 'convergence' is a subset of the considerations or 'milestones' in SEC's IFRS Roadmap, and "convergence" does not necessarily require 'adoption' of IFRS, but rather can be achieved by the FASB and IASB converging their two sets of standards to - as Herz characterized it - a "common set of high quality standards." (That choice of words in itself was very interesting as noted further below.)

Although not commiting to a specific date for full convergence, Herz said more generally, "What I can tell you is that we continue to work closely with the International accounting Standards Board, and with other international standard setters; I told you [earlier] about China, for example, to try to get to this goal of a common set of high quality standards that would support common reporting across the capital markets, so we're just going to pursue that, but the determination of timing and that and who could use IFRS or who couldn't, those kinds of things, that rests with the SEC."

[My two cents: In my view, references to the goal of convergence being a 'common set of standards' vs. a 'single set of have varied over time. While some may view the two terms as interchangable, I have noticed a movement from 'common set' to 'single set' in recent years; however, there may be a return to 'common set' in light of concerns voiced in some comment letters and news reports about the timetable proposed in the SEC's IFRS roadmap. Those referring to an ultimate 'single set' of standards generally note that given the widespread worldwide adoption of IFRS, as noted by FASB Chairman Herz in remarks at an FEI conference in September 2007, any such 'single set' of standards accepted globally would likely ultimately be an improved set of IFRS.]

What does the future hold?
Leinwand closed the program with the question: "Some saw the perils of credit default swaps and other exotic instruments before the financial collapse. What do you foresee as the next problem in your world?"

Herz responded, "I think the next issue that I see is dealing with loans and loss accounting. "That's going to be part of our financial instruments project. Right now, loans are accounted for on a cost basis and what's called an incurred loss model. And I think it's been kind of clear that that is - kind of the provisions these have lagged downward, a downward spiral. And I think trying to think about a better model there, and that might also have a byproduct, I think, of reinforcing sounder lending practices as well." He added, "I agree with other people who say we need to think about inflation, and inflation has some accounting consequences as well."

More details
We provide more details of Herz' remarks and the Q&A in this FEI Summary. You can also watch the NPC's archived video of Herz' remarks; we understand the video will be available on the NPC website for approximately one week.

READ MORE - FASB's Herz Speaks About Principles, Politics In Remarks At National Press Club

Lowongan Pengajar Freelance

Kami Perusahaan Lembaga Pendidikan Indonesia - Amerika (LPIA) membutuhkan :

5 INSTRUKTUR FREELANCE KOMPUTER
Dengan Kualifikasi sebagai berikut:
1. Wanita / Pria

2. Pendidikan Min. D III segala jurusan

3. Baru lulus / masih kuliah diperbolehkan.
4. Mampu mengoperasikan minimal Ms.Office(Word, Excel,P.Point)

5. Mampu / mau mengajar aplikasi AutoCAD dan sejenisnya (berpengalaman lebih diutamakan)
Bagi anda yang berminat dapat mengirimkan
CV lengkap dan pas photo sebelum tanggal 11 Juli 2009 ke atau via e-mail:

LPIA Pangkalan Jati
Jl. Raya Kalimalang No. B-5 E/4, Kalimalang, Jakarta Timur
(sebelah Superindo Tomang Tol)
(021) - 8614509 atau

source: http://www.immersivelounge.com/job_category-1-freelance.php

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Freelance for Java Programmer

We have one open positionas Java Programmer.

Candidate qualifications:

* Degree in Information Technology

* At least 3 full cycle software development using J2EE technolgy
* Experience with Oracle or SQL database
* Experience with web server technology
* Experience with database programming
* Professional attitude
* Ready to work under pressure
If
you thing your qualification meet the above requirement, then please
sent your latest and detailed cv, to delvi@waysase. com.
This is an urgent reqruitment. Freelancer are welcome to apply.

Thanks.

source: http://www.immersivelounge.com/job_category-1-freelance.php

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Lowongan Guru Bahasa Inggris Freelance.

Dibutuhkan seorang Guru Bahasa Inggris Freelance.
Syarat: Mahasiswa/Sarjana Sastra Inggris

Lebih disukai yang dapat mengajar dengan baik dan berdomisili di daerah Tanjungduren-Jakarta Barat.

Kirim CV ke alamat email atau

source: http://www.immersivelounge.com/job_category-1-freelance.php

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JOB FREELANCE ENGLISH TEACHER

STUDY TIME a fast growing English Institution located in Bekasi is now looking forFREELANCE ENGLISH TEACHER

1.Male / Female
2.Age 22 to 40 Y.O
3.Attractive
4.Having experience in teaching
min 1 year
5.Resides around Bekasi
6.Min D3

We provide you free training and good remuneration

Send your CV to email: or mail to STUDY TIME Sentral Niaga Kalimalang Jl. A Yani Blok B2 No 17 Bekasi for further info pls contact Ms Rekha 021 88850403

source: http://www.immersivelounge.com/job_category-1-freelance.php

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Lowongan Marketing Freelance Di PT Alpha Utama Solusindo

PT. Alpha Utama Solusindo
Alamat: Gedung Nariba Plaza Lantai 2 Ruang A6 Jl. Mampang Prapatan Raya No.39 Jakarta12790 12790 Indonesia

Deskripsi Perusahaan:
PT. ALPHA UTAMA SOLUSINDO Merupakan perusahaan yang bergerak di bidang : a.Jasa internet dan provider. b.Jasa instalasi dan perawatan jaringan Komputer. c.Konsultan tekhnologi informasi, internet dan software. d.Web Hosting dan Jasa Desain. e.Infrastruktur

Lowongan Kerja: Marketing Freelance

Deskripsi Pekerjaan
Marketing Freelance untuk pemasaran produk Layanan Internet.

Dengan persyaratan sebagai berikut:
a. Mau bekerja keras
b. Dapat bekerjasama dalam team
c. Memiliki banyak relasi
d. Mampu bekerja berdasarkan target

Kandidat yg berminat & memenuhi kualifikasi di atas, dapat segera mengirimkan surat lamaran lengkap
Via pos :
PT. Alpha Utama Solusindo
Gedung Nariba Plaza Lantai 2 Ruang A6
Jl. Mampang Prapatan Raya No.39
Jakarta 12790

Apabila Anda melamar via pos, tuliskan posisi yg dilamar di surat lamaran & cantumkan kode (VIA POS) di sudut kiri atas amplop.

Details
Tanggal Tayang: 06/02/2009
Pendidikan: SMU/SMEA/STM - Entry Level (0-2 years)
Lokasi: Jakarta / Indonesia
Status Pekerjaan: Temporary Position
Gaji yang ditawarkan:
Tanggal Penutupan: 08/01/2009

Silahkan Login di http://Jobindo.com untuk melamar Lowongan ini. Jika anda belum jadi member, silahkan mendaftar terlebih dahulu

source: http://www.immersivelounge.com/job_category-1-freelance.php

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Lowongan Freelance Marketing Akses Internet Broadband

Bila Anda bekerja di bidang penjualan atau memiliki banyak relasi atau bergerak di bidang IT, Komputer, Internet, Warnet, RTRW Net, dsb. Atau siapapun Anda yg membutuhkan pendapatan tambahan setiap bulan. Manfaatkan peluang usaha dengan bergabung sebagai freelancesales marketing atau sebagai partner RTRW Net untuk mereferensikan produk akses internet broadband kepada siapapun di seluruh Indonesia.

Job Desc Sales Marketing Freelance / Paruh Waktu adalah Melakukan penjualan layanan akses broadband internet dari Broadlink Internet Service Provider di seluruh Indonesia. Pekerjaan dapat dilakukan secara Freelance / Paruh Waktu untuk menawarkan layanan akses broadband internet kepada target market seperti perorangan, corporate, small office, warnet, hotel, apartment, kawasan industri, rtrwnet, toko computer, consultant IT, dsb. Aktifitas penjualan dapat dilakukan dengan cara Telemarketing, Direct Fax, Direct Email, Direct Sales, dsb. Sebagai Freelance, tidak ada kewajiban untuk datang ke kantor. Pekerjaan dapat dilakukan dengan sistem Home Office.

Kompensasi yang diberikan adalah akan mendapatkan fee mulai dari 5% dari setiap pembayaran yang dilakukan oleh customer yang diperoleh. Contohnya sebagai Freelance bila mendapatkan satu customer berlangganan internet Rp 500.000/bulan. Maka Freelance akan mendapatkan Fee 5% setiap bulan nya selama customer tsb berlangganan dan melakukan pembayaran. Layanan yang dijual tersedia beragam dari yang paling murah Rp 300rb per bulan sampai dengan yang jutaan per bulan yang dibutuhkan oleh banyak perusahaan di seluruh Indonesia. Maka, semakin banyak Customer yang diperoleh, otomatis Fee / Komisi akan terus bertambah sehingga memungkinkan Freelance mendapatkan Pendapatan Unlimited.

Freelance ini bisa dilakukan oleh siapapun yang menyukai pekerjaaan di bidang Sales Marketing, tidak perlu ada pengalaman, yang penting memiliki banyak prospek calon pengguna akses internet broadband di seluruh Indonesia. Namun idealnya, Freelance ini dapat dilakukan oleh orang seperti Mahasiswa yang membutuhkan pekerjaan sampingan, Mahasiswa yang baru lulus / Fresh Graduate, Karyawan bagian IT / Information Technology, Karyawan Sales Marketing, Pengusaha / Wiraswasta, Pengusaha Warnet, Toko Computer, Consultant IT, Teknisi Computer / Engineer, atau siapapun yang membutuhkan tambahan income / pendapatan per bulannya.

Bila Anda memiliki komunitas yang membutuhkan akses internet broadband manfaatkan Peluang usaha sebagai partner RT RW Net dikhususkan kepada siapapun juga yang memiliki lokasi gedung tinggi, Ruko beberapa lantai, atau tower tinggi yang berada di wilayah yang potensi pengguna akses internet broadband dengan biaya yang terjangkau mulai Rp 200.000/bulan. Atau bila Anda saat ini sudah memiliki usaha di bidang Warnet / Game Online / RTRW Net, akan mendapatkan bandwidth akses internet broadband gratis bila memanfaatkan peluang usaha kerjasama partner Broadlink RT RW Net dengan fokus wilayah di Jakarta Bogor Tangerang Bekasi Jabotabek.

Akses internet broadband wireless, fiber optic dari Broadlink internet service provider dengan kantor pusat di Jakarta dapat dimanfaatkan dengan coverage wilayah diantaranya:

Jakarta Pusat: Menteng, Cikini, Matraman, Senen, Cempaka Putih, Kramat,Manggarai, Gambir, Rawasari, Johar, Tanah Tinggi, Cideng, Petojo, Cempaka Baru, Gunung Sahari, Serdang, Sumur Batu, Gondangdia, Kebon Sirih, Pegangsaan, Sawah Besar, Karang Anyar, Kartini, Pasar Baru, Senen, Bungur, Kenari, Kramat,Kwitang, Paseban, Tanah Abang, Bendungan Hilir, Gelora, Kampung Bali, Karet Tengsin, Kebon Kacang, Kebon Melati, Petamburan.

Jakarta Selatan: Kuningan Rasuna Said, Tebet, Saharjo, Pancoran, Duren Tiga, Pasar Minggu, Kalibata, Mampang, Buncit, Tendean, Kemang, Bangka, Prapanca,Antasari, Kebayoran Baru, Kebayoran Lama, Ampera, Simatupang, Cilandak, Blok A,Blok M, Senopati, Ciputat, Ciledug, Bintaro, Pamulang, Pondok Cabe, Cinere, Cipete, Gandaria, Lebak Bulus, Pondok Labu, Jagakarsa, Ciganjur, Cipedak,Lenteng Agung, Srengseng, Tanjung Barat, Kramat Pela, Melawai, Petogogan, Pulo, Selong, Senayan, Cipulir, Grogol, Pondok Pinang, Pela Mampang, Tegal Parang, Cikoko, Pangadegan, Rawajati, Jatipadang, Kebagusan, Pejaten, Ragunan,Pesanggrahan, Petukangan, Ulujami, Setiabudi, Guntur, Karet, Kuningan, Karet Semanggi, Menteng Atas, Pasar Manggis.

Jakarta Barat: Slipi, S Parman, Tanjung Duren, Kemanggisan, Meruya, Gajah Mada, Hayam Wuruk, Daan Mogot, Cengkareng, Kalideres, Puri Indah, Grogol, Kota, Tomang, Duri Kosambi, Kapuk, Kedaung Kaliangke, Rawa Buaya, Grogol Petamburan, Jelambar, Wijaya Kusuma, Kalideres, Kamal, Pegadungan, Semanan, Tegal Alur, Kebon Jeruk, Duri Kepa, Kedoya, Kelapa Dua, Sukabumi, Kembangan, Joglo, Meruya,Srengseng, Palmerah, Jatipulo, Kota Bambu, Palmerah, Taman Sari, Glodok, Keagungan, Krukut, Mangga Besar, Pinangsia, Taman Sari, Tambora, Angke, Duri,Jembatan Besi, Jembatan Lima, Kalianyar, Kerendang, Pekojan, Roa Malaka, Tambora, Tanah Sereal.

Jakarta Timur : Pramuka, Pemuda, Pulogadung, Klender, Jatinegara, Cawang,Pondok Gede, Jatiwaringin, Halim, Taman Mini, Suprapto, Pasar Rebo, Cilangkap,Cakung, Penggilingan, Pulogeang, Rawa Terate, Ujung Menteng, Cipayung, Bambu Apus, Ceger, Lubang Buaya, Ciracas, Cibubur, Rambutan, Duren Sawit, Malaka Jaya, Pondok Bambu, Pondok Kelapa, Pondok Kopi, Bidaracina, Cipinang, Cililitan, Kramat Jati, Makasar, Kebon Pala, Pinang Ranti, Matraman Kayu Manis, Kebon Manggis, Pisangan, Utan Kayu, Cijantung, Pekayon, Rawamangun.

Jakarta Utara: Kelapa Gading, Sunter, Cilincing, Cakung, Tanjung Priok, Marunda,Semper, Kemayoran, Ancol, Kapuk, Pantai Indah Kapuk, Pluit, Kamal, Kalibaru, Rorotan, Semper, Sukapura, Pegangsaan, Koja, Lagoa, Rawa Badak, Tugu, Pademangan, Kamal Muara, Penjaringan, Kebon Bawang, Sunter Agung, Sunter Jaya,Warakas.

Bogor: Bukit Sentul, Gunung Putri, Cileungsi, Citeureup, Cibinong, Raya Bogor, Depok, Cimanggis, Parung, Jonggol, Trans Yogie, Bogor Barat, Bogor Selatan, Bogor Tengah, Bogor Timur, Bogor Utara, Sawangan, Beji, Bojonggede.

Tangerang: Pasarkemis, Balaraja, Merak, Jatiuwung, Citra Raya, Cikupa, Cisoka, Curug, Serang, Tigaraksa, Jasinga, Legok, Bumi Serpong Damai BSD, Karawaci,Lippo Karawaci, Mauk, Teluk Naga, Gading Serpong, Puspiptek, Jombang, Alam Sutera, Bitung, Kota Modern, Cipondoh, Batuceper, Kosambi, Pondok Aren, Jatake, Larangan, Cimone, Sudimara, Cibodas, Poris Jaya, Jurumudi, Kedaung, Kreo.

Bekasi: Bantargebang, Kaliabang, Pedurenan, Jakasampurna, Jakamulya, Jakasetia, Duen Jaya, Margahayu, Harapan Baru, Harapan Jaya, Kaliabang, Rawalumbu,Tarumajaya, Cibarusah, Tambun, Kranji, Tambun, Bekasi Raya, Bintara, Kalimalang, Pekayon, Bekasi Barat, Bekasi Utara, Bekasi Selatan, Bekasi Timur, Babelan, Jatiasih, Cibitung, MM 2100, EJIP, Jababeka, Lippo Cikarang, Delta Mas,Karawang, KIIC, Suryacipta, Kota Bukit Indah, Cikampek, Lemahabang.

Gedung Perkantoran Office Building Jakarta: Agro Manunggal, Arkadia, SCBD, Arthaloka, Ariobimo, Atrium Mulia, Atrium Setiabudi, Graha Atrium Senen, Bank Bukopin, Bank Buana, Permata Tower, Bank Indonesia, Beltway Office Park, BNI 46, BRI I, BRI II, Chase Plaza, Cilandak Commercial Estate KKO, City Plaza, Cyber Building, Da Vinci, Danamon Bank, Danamon Building, Deutsche Building, Dharmala Sakti, Ebenezer Building, Four Season Hotel, Gedung Lina, Gedung Jamsostek, Graha Aktiva, Graha BIP, Graha Ekonomi, Graha Elnusa, Graha FCB, Graha Indramas, Graha Irama, Graha Inti Fauzi, Graha MIK, Graha Mustika Ratu, Graha Mitra, Graha Niaga, Graha Simatupang, Graha Sucaco, Grand Indonesia, Graha Surya Internusa, Hero Building, Jakarta Convention Centre, Mayapada Tower, Menara Batavia, Menara Bidakara, Menara Bank Dagang Negara, Menara Bank BTN, Menara DEA, Menara Global,Menara Gracia, Menara Imperium, Menara Jamsostek, Menara Kadin, Menara Karya, Menara Kebon Sirih, Menara Kuningan, Menara Mulia, Menara Sudirman, Menara Thamrin, Menara Ravindo, Mensa Building, Megabest, NISP Bank, Panin Bank, Patra Jasa, Plaza 89, Plaza ABDA, Plaza Bapindo, Plaza BII, Plaza Great River, Plaza Kuningan, Plaza Lippo, Plaza Mandiri, Plaza Permata, Plaza Semanggi, Plaza Sudirman, Puri Imperium, Ratu Prabu, Resona Perdania, Satrio Tower, Sampoerna Square, Senayan City, Sentra Mulia, Sentral Senayan, Setiabudi Building, Siemens Business Park, Sona Topaz Tower, Summitmas Tower, SPC Building, Talavera,Victoria Building, Widjojo Centre, Wisma Asia, Wisma Aldiron, Wisma Antara, Wisma Barito Pacific, Wisma Bakrie, Wisma BCA, Wisma Bisnis Indonesia, Wisma Budi, Wisma Bumiputera, Wisma GKBI, Wisma Hayam Wuruk, Wisma Indovision, Wisma Metropolitan, Wisma Mulia, Wisma Nugra Santana, Wisma Standard Chartered, Wisma Tugu, Wisma Tamara, WTC.

Untuk penjelasan lebih lanjut tentang kerja sama dengan memanfaatkan peluang usaha sebagai Freelance atau kerja sama sebagai partner RT RW Net silahkan Anda hubungi kami di (info at broad-link.com), website www. broad-link. com, atau hubungi BOYKE PRIUTAMA 02198878678, 02191655678, 0816765678, 08156045678, 08886168678.

source: http://www.immersivelounge.com/job_category-1-freelance.php

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FASB And Due Process

Steve Burkholder of BNA recently reported that the Investors Technical Advisory Committee (ITAC), an advisory group to the FASB, sent a comment letter to FASB's parent organization, the Financial Accounting Foundation, expressing “grave concerns” about a “substantial erosion in the independence of the accounting standard-setting process” and “a recent weakening of already inadequate accounting standards.”

In his article, FASB's Investors Technical Advisory Panel Notes ‘Grave Concerns' on Board Autonomy in the June 22 edition of BNA’s Daily Report for Executives, Burkholder wrote:

"ITAC, whose 13 accountant-members work as security analysts or investor advocates, focused in part on controversial guidance issued by FASB in April on fair value accounting and asset impairments — guidance affecting banks' valuation of troubled mortgage-backed assets central to the financial meltdown of last fall. The guidance was placed on an extraordinarily fast track after FASB's chairman was pressured at a House subcommittee hearing March 12 to have the board do what it could in a matter of a few weeks to alter fair value and impairment accounting rules, a target of lobbying by banking groups since last summer."

Specifically, ITAC stated in its comment letter:

"[S]pecial interests that have been instrumental in causing the current crisis, the effects of which are borne by hundreds of millions of individuals and families around the globe, have targeted one of the critical components of global capital markets, financial reporting and the transparency it brings, and seek to subvert it to their own purposes... We would remind the FAF that...political pressure bore the desired fruit: the issuance by the FASB on a highly accelerated basis with truncated due process, of standards that a number of investor groups and organizations including the ITAC stated publicly represented an erosion of high quality financial reporting. The standards resulted in a significant reduction in both transparency in the financial statements for distressed financial instruments, the so-called “toxic” assets, as well as delayed timely reporting of the problems. Many investors responded negatively to the reduced quality of information, as reflected in their investment decisions, but that response cannot compensate for the loss of information and, perhaps more importantly, the loss of trust and confidence in financial reporting and accounting standard setting."

To address their concerns about pressure on FASB's independence and due process, ITAC recommended the FAF take action on three fronts, by:

• reversing FAF's decision made in early 2008 as part of a restructuring of FAF and FASB which reduced the size of the FASB board from seven to five,
• reversing another FAF restructuring decision, in which agenda setting authority was moved from the FASB board as a whole to the FASB chairman, and
• increasing the role of the FAF as a buffer for the FASB, to guard its independence.

On this last point, ITAC recommended in its letter that FAF members act as a 'protective shield' for FASB by taking actions such as testifying before Congress (i.e., in place of FASB board members testifying directly). However, ITAC acknowledged it could be challenging to identify an FAF member with sufficient technical expertise to explain FASB's actions to Congress or others.

I asked FAF spokesman Neal McGarity if he had any comment on the issues raised in ITAC's letter. Below is his response, which focuses on ITAC's claim that political pressure influenced the standard-setting process with respect to the recent fair value guidance issued in April, in the form of three FASB staff positions (FSPs). McGarity states:

"The genesis for two of the three [fair value] FSPs were the SEC’s recommendations to Congress. The SEC recommended that the guidance on OTTI [other than temporary impairment] and on Fair Value needed improvement/ clarification; the third FSP added disclosures supported by investors on a quarterly (rather than just an annual) basis.

Regarding agenda setting powers--At the [March 12 Congressional] hearing, [FASB Chairman] Bob Herz responded that he needed to consult with his fellow Board members. That response was followed by his consultation with the other Board members and others upon his return from the hearing. The agenda process has not changed significantly. Also, The FAF Trustees were aware of and engaged in the process. FASB consulted with the FAF after the hearing and the FAF also undertook a post mortem discussion of the events and process as part of its oversight role.

While the FASB due process was accelerated it was within our normal permissible time frames, it was extensive and over 700 letters were carefully considered, along with many meetings and discussions with constituents and major investors in financial institutions-- whose views often differed from those of ITAC members. Over 40 institutional investors were consulted with."

[Note: In a similar vein, I noted in this blog on April 3 that I believed some of the press coverage and commentary at that time "may generate 'buzz' but it over-politicizes the reality of what happened in terms of the action taken yesterday by FASB."]

McGarity adds more generally with respect to ITAC:

"The ITAC membership comprises thirteen investment professionals--- but investor views on fair value and other financial issues vary greatly. The Board has consulted with vast numbers of investors on fair value as part of its due process over many years.

We don’t believe that even ITAC would consider itself the sole 'voice of the investor.' ITAC’s work is greatly valued and considered, but their views and opinions are not definitive.

The FAF is fully committed to safeguarding the independence of the FASB, and has been very active in doing so, in Washington and around the globe.

I would also add that the Board significantly increased the fair value disclosures reported by companies at a sufficiently detailed level to provide greater transparency to investors about the quality of the underlying assets."

FASB's 2008 Restructuring Raised in ITAC Letter
Turning to ITAC's recommendation that the FAF reverse some of the key decisions made in its 2008 restructuring of FASB, BNA's Burkholder noted in his June 22 article that ITAC objected to the reduction in size of the FASB board when it was first proposed in late 2007, as did FEI’s Committee on Corporate Reporting (CCR). (NOTE: Additionally, FEI's Committee on Private Companies, Standards Subcommittee also objected to the then-proposed reduction in the size of FASB's board. See FEI CCR and CPC letters.)

The FAF’s decision to reduce the size of the FASB board was deemed ‘controversial’ at the time. Writing about the change in operating procedures announced by the FAF on Feb. 26, 2008, Marie Leone of CFO.com wrote on 2.26.08 in FASB Parent: Five is More Than Seven:

"In a controversial vote, the Financial Accounting Standards Board's governing body has approved the reduction of FASB from seven to five members as of July1 [2008]… At a press conference following the FAF trustees' meeting in New York, FAF trustees talked about why they cut FASB's board in the face of widespread opposition…. Concerning the trustees' decision process, FAF chairman Robert Denham told reporters that "this is not a question of counting comments. It's considering comments."

In a follow-on article the next day, Can Bob Herz Make the Trains Run on Time?, Leone added:

“To be sure, the downsizing proposal faced overwhelming opposition during a 60-day public comment period that ended on February 10. Most of the 59 letters set to FAF argued against reducing FASB’s membership. But “the comments were sought for reasons of transparency,” explained Ellyn Brown, a trustee and chairman of FAF’s Special Committee on Governance Review. “It was not a polling process.”

A number of commenters on FAF’s proposal – including former FASB chairman Denny Beresford, who supported the reduction in size of the board - recommended that FASB reevaluate its decision after a couple of years.

My Two Cents
I remind you of the disclaimer on the side of this blog, particularly (but not only) when I identify comments as ‘my two cents.’

FASB and the IASB frequently emphasize the role of due process in their letters to governmental authorities and others, in support of maintaining an independent private-sector standard-setting process. See, e.g. Oct. 2, 2008 letter from FAF to Rep. Barney Frank (ref. Oct. 27, 2008 letter from FAF to SEC (ref. to due process at end of 2nd paragraph), Nov. 11, 2008 letter from IASCF to President Bush and G-20 (see first sentence under subheading: Accountability of IASCF); Nov. 13, 2008 letter from FAF to Pres. Bush, G-20 (second last paragraph references due process); June 8, 2009 Statement of IASCF Monitoring Board Regarding Due Process Toward Addressing Calls from G-20 Leaders (see second paragraph). “Extensive, Open Due Process” was also highlighted in a subsection of FAF’s Feb. 26, 2008 press release introducing the Resolutions passed by the FAF, which noted 59 comment letters were received on the proposed restructuring of FAF, FASB and GASB during the two month comment period. (NOTE: the comment period happened to cross year-end, a busy time for many constituents who may have been interested in commenting on the proposal.)

However, as an example of due process in action, I personally felt some concern when I read the views of various parties cited by CFO.com’s Leone last year as to the decisions reached in the FASB restructuring, in light of comment letters received, e.g. that ‘comments were sought for transparency,’ but it was ‘not a polling process,’ and that ‘it’s not a question of counting comments, but considering comments.’

To my thinking, if we elected a President of the United States that way (i.e., if the majority vote was ‘considered’ by some authority who would then appoint a President, rather than ‘counting’ votes), I think we would be concerned about the substance vs. form of that kind of due process. (Some may see parallels to the electoral college, but I think even that’s a stretch.)

Of note, it is important to recognize that the FAF and FASB are two separate bodies - although closely linked – and that decisions reached on the FASB restructuring were reached by the FAF, not FASB.

Perhaps the FAF will reevaluate the change in board size as recommended in ITAC's most recent letter, in the earlier letter by Beresford and others. To me, particularly given the weighing of objections voiced on the board reduction issue, that would be a healthy exercise by any organization that emphasizes its attention to due process.

FASB Proposes Disclosures Relating to Credit Quality, Allowance
In other FASB news, yesterday (June 24), FASB released for public comment an Exposure Draft of a proposed accounting standard entitled: Disclosures About the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The proposed standard would be effective beginning with the first interim or annual reporting period ending after December 15, 2009, with early application encouraged. The comment period ends August 24. See FASB's press release and the ED.

Separately, FASB discussed at its board meeting yesterday proposed amendments to FAS 160, Noncontrolling Interests in Consolidated Financial Statements, including amendments to the scope of the standard, and additional disclosures. See FASB’s Summary of Board Decisions for further details.

Herz To Speak At National Press Club
As a reminder, FASB Chairman Robert Herz is slated to speak at the National Press Club on Friday, June 26. According to FASB’s press release, his remarks will be entitled, “History Doesn’t Repeat Itself, People Repeat History—Front-Line Thoughts and Observations on Creating a Sounder Financial System.”

READ MORE - FASB And Due Process

Economic Update

On Wednesday, June 23, President Barack Obama held a press conference at which he gave prepared remarks on the situation in Iran, and on legislation moving through Congress relating to clean energy and health care reform. During the Q&A that followed, questions were raised on these issues, as well as on the state of the economy and the administration's recently issued financial regulatory reform plan. You can read the full transcript of the press conference (including the Q&A); we provide a few brief highlights on the subject of the economy below.

On Financial Regulatory Reform and the Fed
Jeff Mason of Reuters asked: "[I]n light of the financial regulation and reform that you have made, how do you rate the performance of the Fed in handling the financial crisis? And more specifically, how do you rate the performance of Ben Bernanke, and would you like him to stay on when his term ends in January?"

The President responded: "I'm not going to make news about Ben Bernanke -- [laughter] -- although I think he has done a fine job under very difficult circumstances. I would say that all financial regulators didn't do everything that needed to be done to prevent the crisis from happening. And that's why we've put forward the boldest set of reforms in financial regulation in 75 years, because there were too many gaps where there were laws on the books that would have brought about a prevention of the crisis; the enforcement wasn't there. In some cases, there just weren't sufficient laws on the books -- for example, with the non-banking sector. I think that the Fed probably performed better than most other regulators prior to the crisis taking place, but I think they'd be the first to acknowledge that in dealing with systemic risk and anticipating systemic risk, they didn't do everything that needed to be done. I think since the crisis has occurred, Ben Bernanke has performed very well. And one of the central concepts behind our financial regulatory reform is that there's got to be somebody who is responsible not just for monitoring the health of individual institutions, but somebody who's monitoring the systemic risks of the system as a whole. And we believe that the Fed has the most technical expertise and the best track record in terms of doing that. But that's not the only part of financial regulation. One of the things that we're putting a huge amount of emphasis on is the issue of consumer protection -- whether it's subprime loans that were given out because nobody was paying attention to what was being peddled to consumers, whether it's how credit cards are handled, how annuities are dealt with, what people can expect in terms of understanding their 401(k)s. There's a whole bunch of financial transactions out there where consumers are not protected the way they should, and that's why we said we're going to put forward a consumer financial protection agency whose only job it is to focus on those issues. Now, the Fed was one of the regulators that had some of those consumer responsibilities. We actually think that they're better off focusing on issues of broad systemic risk, and we have just one agency that's focused on the consumer protection side.

On the Economy and Economic Stimulus
Hans Nichols of Bloomberg asked: "When you were selling the economic stimulus package, you talked and your advisors and economists talked about keeping unemployment below 8 percent. Last week you acknowledged that unemployment is likely to reach double digits, being 10 percent. Do you think you need a second stimulus package?"

The President responded: "Well, not yet, because I think it's important to see how the economy evolves and how effective the first stimulus is. I think it's fair to say that -- keep in mind the stimulus package was the first thing we did, and we did it a couple of weeks after inauguration. At that point nobody understood what the depths of this recession were going to look like. If you recall, it was only significantly later that we suddenly get a report that the economy had tanked. And so it's not surprising then that we missed the mark in terms of our estimates of where unemployment would go. I think it's pretty clear now that unemployment will end up going over 10 percent, if you just look at the pattern, because of the fact that even after employers and businesses start investing again and start hiring again, typically it takes a while for that employment number to catch up with economic recovery. And we're still not at actual recovery yet. So I anticipate that this is going to be a difficult -- difficult year, a difficult period." He later added, "[W]hat I am saying is that -- here are some things I know for certain. In the absence of the stimulus, I think our recession would be much worse. It would have declined -- without the Recovery Act -- we know for a fact that states, for example, would have laid off a lot more teachers, a lot more police officers, a lot more firefighters, every single one of those individuals whose jobs were saved. As a consequence, they are still making their mortgage payments, they are still shopping. So we know that the Recovery Act has had an impact. Now, what we also know is this was the worst recession since the Great Depression, and people are going through a very tough time right now. And I don't expect them to be satisfied... the American people have a right to feel like this is a tough time right now. What's incredible to me is how resilient the American people have been and how they are still more optimistic than the facts alone would justify, because this is a tough, tough period. And I don't feel satisfied with the progress that we've made. We've got to get our Recovery Act money out faster. We've got to make sure that the programs that we've put in place are working the way they're supposed to... This is a very, very difficult process. And what I've got to do is to make sure that we're focused both on the short term, how can we provide families immediate relief and jumpstart the economy as quickly as possible; and I've got to keep my eye on the long term, and the long term is making sure that by reforming our health care system, by passing serious energy legislation that makes us a clean energy economy, by revamping our education system, by finally getting the financial regulatory reforms in place that are necessary for the 21st century -- by doing all those things, we've got a foundation for long-term economic growth, and we don't end up having to juice up the economy artificially through the kinds of bubble strategies that helped to get us in the situation that we're in today."

Republican Response
In the Republican response to the President's remarks, House Minority Whip Eric Cantor stated: "The West Wing press conference is the latest public relations effort to combat the American people’s growing discomfort with the actions of this Administration."

He continued, "Plain and simple, the American people are concerned about the economy, job creation and the incredible debt obligations incurred in the last 6 months. Republicans have offered common-sense ideas and solutions that would have created real jobs, improved our economy and spent less tax dollars. The President continues to push for a government healthcare plan that will increase costs, reduce patient choice and flexibility, and lower the quality of care. Now we hear that Speaker Pelosi intends to pass the Cap & Tax plan this week which will impose a hard-hitting tax upon families and small businesses costing our struggling economy thousands of jobs. We stand ready to work together with the President to get America back to work, but we refuse to sit by idly as the Democrat majority tries to force this unfocused assortment of tax increases and job-killing policies upon the American people. Democrat-controlled Washington is completely disconnected with the reality faced by millions of Americans who are growing weary with the lack of focus, accountability and results."

Additional reporting on some of the more aggressive questioning thrusted on Obama at the press conference can be found in The Hill.com

CFO's Confidence in Economy Rises; Audit Fee Survey Also Released
In related news on the economic front, just-released results of the FEI-Baruch College 2nd Quarter 2009 CFO Outlook Survey revealed that the CFO optimism index showing confidence in the U.S. economy improved for the first time in over two years; however, CFO confidence in their own companies' prospects declined to its lowest point in the history of the 11 year-old survey. CFO's surveyed forecast an end to the recession by 2011. Complete survey results can be obtained from the Financial Executives Research Foundation (FERF) bookstore.

FERF, the research affiliate of FEI, also recently released FEI's 2009 audit fee survey. The survey showed a 2.2% increase in total audit fees at public companies, and a 3.7% increase in total audit fees at private companies.

READ MORE - Economic Update

FASB-IASB Update

FASB and the IASB made a number of announcements this week. Some highlights:

• Access To FASB Accounting Standards Codification on July 1 (This announcement contains a description of, and pricing for access to, the Professional View and Basic View options for FASB's Codification, which becomes official GAAP on July 1. The Basic View option will be free, the Professional View option with state-of-the-art searching capability and other special functions will be available by paid subscription.) FASB is hosting a webcast on the Codification on Monday, June 22 from 2-3 pm EDT, and additional information (including links to Codification Alerts, FAQs, and more) can be found in FASB's Codification Resources.
• IASCF 2008 Annual Report is now available.
• IASCF Trustees Announce Dates For Constitutional Review Public Roundtables (Sept. 9-London, Oct. 6-New York, Oct. 21-Tokyo).
• IASB Seeks Views on Accounting for 'Own Credit Risk' (Discussion Paper released June 18; comments due Sept. 1)
• IASB Clarifies Accounting for Group Cash-Settled Share-Based Payment Transactions

Additionally, as noted in our blog post yesterday, FASB Chairman Robert Herz is slated to give a speech at the National Press Club next week.

FEI Comments On Revenue Recognition
In other FASB-IASB related news, FEI's Committee on Corporate Reporting (CCR) filed a comment letter this afternoon on FASB's Discussion Paper: Preliminary Views on Revenue Recognition in Contracts with Customers.

Revenue recognition is a joint project of FASB and the IASB; FASB's Discussion Paper and IASB's Discussion Paper were issued in tandem on December 19, 2008 with a six-month comment period, ending today. There are 80 comment letters posted so far (the listing includes letters on both the FASB and IASB documents); see also the link to the FEI CCR letter filed this afternoon; it is possible additional letters are in the process of being filed/posted as well.

READ MORE - FASB-IASB Update

House Dems Unveil Health Care Plan; GOP Response

At a press conference earlier today, the Chairmen of the House Ways & Means, Energy & Commerce, and Education & Labor Committees unveiled an 852-page Tri-Committee Discussion Draft for Health Care Reform. A related press release links to this 4-page Summary of the Discussion Draft and related material.

House Education & Labor Chairman George Miller said: "Today marks a historic moment in America’s urgent quest to fix our broken health insurance system.... President Obama asked us to draft a reform bill that will control costs, guarantee choice, and ensure quality and affordable health coverage for all Americans. I believe that our draft lives up to those essential principles."He added hearings on the draft legislation will begin next week.

In his response, House Republican Chair John Boehner called the House Dem's plan "nothing less than a government takeover of health care... This plan will make health care more expensive, reduce the quality of care for millions of families and small businesses, cost American jobs, and force untold millions of Americans off their current plans and into a government-run nightmare operated by federal bureaucrats." The GOP response links to the House GOP Health Care Reform proposal presented earlier this week, and related information.

FEI members: if you have questions about developments with respect to health care reform, contact Matt Miller, Senior Director, Government Affairs, in FEI's Washington DC office mmiller@financialexecutives.org or Cady North, Manager of Government Affairs, cnorth@financialexecutives.org .

READ MORE - House Dems Unveil Health Care Plan; GOP Response