SEC 'Dear CFO' Letter On Mortages, Foreclosure, Loss Accrual Not Limited To Financial Institutions
Nov. 1, 2010
On Oct. 29, 2010, the U.S. Securities and Exchange Commission posted a letter entitled, "Sample Letter Sent To Public Companies on Accounting and Disclosure Issues Related to Potential Risks and Costs Associated with Mortgage and Foreclosure-Related Activities or Exposures."
Informally referred to as one of the SEC's "Dear CFO Letters," the introductory paragraph above the letter, as posted on the SEC Web site, states that the letter was sent in October 2010 "to certain public companies as a reminder of their disclosure obligations to consider in their upcoming Form 10-Qs and subsequent filings, in light of continued concerns about potential risks and costs associated with mortgage and foreclosure-related activities or exposures."
The SEC's Dear CFO letter contains some specific disclosures that "should be considered" by public companies engaged in certain mortgage-related activities and similar activities, and is not limited to financial institutions. Additionally, the letter includes reminders of certain MD&A requirements for loss contingency accruals and disclosures, including as relate to litigation. Additional highlights from the letter can be found in the FEI blog.
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Pepared Nov. 1, 2010 by FEI staff. This summary does not reflect FEI opinion unless specifically noted above.