President and CEO
Financial Executives International
Financial Executives Research Foundation
September 13, 2006
On my way to the inaugural meeting of our newest FEI chapter in Madison, Wisconsin! Then I'm heading to Dallas for a Committee on Corporate Reporting (CCR) meeting. The regulators always seem to issue something right when CCR is meeting - the SEC just issued its long awaited SAB on quantifying misstatements. See analysis below for more detail.
n FASB Update n
FASB Issuing Proposed FSP on Fair Valuing Bus Comb and Impairment
At today's FASB board meeting, the board voted 4-3 to issue for public comment a proposed FSP on FAS Nos. 141-b, 142-e, and 144-b, "Fair Value Measurements in Business Combinations and Impairment Tests." The proposed FSP would amend FAS 141, 142, and 144 to clarify existing guidance on fair value measurements in those standards, and would be effective until the reporting entity adopts FAS 157, "Fair Value Measurements" - which was said to be "in production" and to be issued soon. Further details are on page 11 of the board handout.
Financial Guaranty Insurance, FIN 46R for Investment Companies
Also discussed at today's board meeting was Financial Guaranty Insurance revenue recognition and acquisition cost allocation (pages 1-6 of board handout). Additionally, FASB voted 4 to 3 to clear AcSEC's proposed SOP, Clarification of the Scope of the Audit and Accounting Guide, Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. (In clearing the SOP, various board members noted it would be important to consider interaction with FASB's upcoming Fair Value Option standard.) However, FASB did not yet support issuance of a related proposed FSP - FSP FIN 46 (R)-d, "Application of FASB Interpretation No. 46(R) to Investment Companies" pending further analysis. Chairman Herz said he wanted to be sure the FSP would not create a way to "inadvertently circumvent" FIN 46R. Details are on pages 7-10 of the board handout.
FASB Issues Final FSP on Planned Major Maintenance Activities
On Sept. 8, FASB issued FSP No. AUG-AIR-1, "Accounting for Planned Major Maintenance Activities." The FSP is available here.
n IASB Update n
Sept. 15 Deadline to Nominate IASB Board Members, IASCF Trustees
Sept. 15 is the deadline to nominate candidates to fill one of the open positions for board members of the IASB and open positions for trustees on the International Accounting Standards Committee Foundation, which oversees the IASB's funding and operations. Further information about the IASB board positions is available here, and information regarding the IASCF trustee positions is available here.
Joint Working Group on Financial Statement Presentation
The IASB-FASB Joint Working Group on Financial Statement Presentation is to meet Sept. 15 in London. Details are being posted on www.iasb.org, and background on the project is available here.
n SEC Update n
SAB 108 Issued on Quantifying Misstatements
Earlier today, the SEC issued SAB 108 on Quantifying Financial Statement Misstatements. According to a concurrent press release, SAB 108 sets forth the SEC staff's views that registrants should quantify errors using both a balance sheet and an income statement approach, and evaluate whether either approach results in quantifying a misstatement that - when all relevant quantitative and qualitative factors are considered - is material. Additionally, the SEC staff will not object if a registrant records a one-time cumulative effect adjustment to correct errors existing in prior years that previously had been considered immaterial - quantitatively and qualitatively - based on appropriate use of the registrant's approach. The SAB describes the circumstances where this would be appropriate, as well as required disclosures to investors.
SEC Considering Proposed Proxy Rule Amendments
On Sept. 7 the SEC announced it will consider a proposed rule amending Rule 14a-8 of the proxy rules - concerning director nominations by shareholders - at an open commission meeting on Oct. 18. This action is in response to the Sept. 5 decision by the U.S. Court of Appeals for the Second Circuit, which disagreed with the SEC staff's longstanding interpretation of Rule 14a-8. "A large number of public companies" are subject to the above court's jurisdiction, according to the SEC's announcement. The SEC anticipates that, following publication of the proposed rule amendment and public comment period, a final rule proposal will be considered at an open commission meeting in time for a final rule to go into effect for the 2007 proxy season.
SEC Posts Final Rule on Exec Comp, Proposal on Non-Exec Comp
On Sept. 8 the SEC posted a final version of its disclosure rule on Executive Compensation that conforms to the version printed in the Federal Register. The final rule is available here. (NOTE: This replaces the earlier version of the final rule as originally posted on the SEC website.) Concurrently, the SEC separately posted its proposed rule on disclosures of compensation to three additional highly compensated (non-executives). The proposed rule is available here, and the comment deadline is Oct. 23.
Sept. 14 Comment Deadline on Proposed Extension for Small Cos on Section 404
The deadline to file comments on the SEC's proposed rule that would extend the filing deadline for the management report and auditor's reports under Section 404 of the Sarbanes-Oxley Act is tomorrow. Further details are in this FEI summary, and comment letters are posted here.
Sept. 18 Comment Deadline on Concept Release on Management Reporting on Internal Control
The comment deadline on SEC's Concept Release on Management Reporting on Internal Control is Sept. 18. Further details are in this FEI summary, and comment letters are being posted here.
SEC Small Business Capital Formation Forum to Include XBRL Discussion
The SEC has announced that its annual Forum on Small Business Capital Formation, to be held this year on Sept. 29 at the SEC's Washington, D.C., headquarters, will focus not only on capital formation challenges for small companies, but also on advantages for small companies in filing interactive data (such as XBRL) with the SEC. Further information about the content of the forum (which will be webcast) and information for those wishing to register to attend the conference in person is available here.
n PCAOB Update n
Baumann Joins PCAOB as Deputy Director, Office of Research and Analysis
The PCAOB announced earlier today that Martin F. Baumann has joined the PCAOB as Deputy Director of its Office of Research and Analysis. Baumann comes to the PCAOB from Freddie Mac, where he served as CFO since June 2003, leading the completion of the company's earnings restatement and subsequent improvements in its financial reporting. Prior to that, he had a 30-year career with PwC.
n COSO Update n
Guidance for Smaller Public Companies Available
COSO's new Guidance for Smaller Public Companies, which includes 20 principles and numerous attributes, approaches and examples (published in July), is available is available for purchase in both print and pdf form. FEI members can purchase COSO documents at a discount, as FEI is one of the five sponsoring organizations of COSO. Further information about the new publication is available here, and be sure to use FEI member coupon code FEISB (for pdf or print copy only) or FEISB1 (for combined print/pdf order) when ordering here.
n Legislative Update n
Regulators Testify at Senate Hearings on Stock Options Backdating
SEC Chairman Christopher Cox, PCAOB Chairman Mark Olson, representatives of the IRS, DOJ, and others testified at two separate Senate hearings on Sept. 6 on stock options backdating and related implications of executive compensation and corporate taxation. Further details are in this FEI Summary.
n FEI Committee News n
FEI Tax Committee Advocating Withholding Tax Relief
Section 511 of the recently-enacted Tax Reconciliation Act (H.R 4297) requires federal, state, and local governments to impose a mandatory 3 percent withholding tax on payments to contractors providing property or services to government entities. Sen. Larry Craig (R-ID) strongly opposed this provision, and has since introduced legislation (S. 2821) to repeal it. In the House, Rep. Wally Herger (R-CA) has agreed to sponsor the companion bill to S. 2821, and will likely introduce the legislation within the next week. The COT, which believes the withholding tax represents bad tax policy, has joined the Government Withholding Relief Coalition in support of the Craig and Herger legislation. The coalition has submitted a comment letter endorsing S. 2821, and will begin meeting with policymakers to urge their support.
FEI Small Public Co. Task Force Comments to SEC
FEI's Small Public Company Task Force, chaired by Rick Brounstein, filed a comment letter today in response to the SEC's proposed delay of certain internal control reporting requirements under Sarbanes-Oxley Section 404 for small public companies.
DoD Procurement Chief to Address FEI Group
Shay Assad, Director of Defense Procurement and Acquisition Policy at the Department of Defense, will address FEI's Committee on Government Business (CGB) when the group next meets in Washington, D.C. on Nov. 9. As the Director of DPAP, Assad is responsible for all acquisition and procurement policy matters in the Department of Defense. FEI members who are interested in attending the event should contact Mark Prysock at FEI.
n Member Initiative n
FEI Task Force on Diversity Planned
To expand on FEI Chairman's Rich Schrader's commitment to immediate past chairs Mary Jo Green and Bob Walker, FEI CEO Colleen Cunningham, and FEI board member Alexis Dow's focus on diversity, FEI is continuing to develop its initiative to incorporate more diversity into its national programs, partner with minority organizations and provide information on local contacts of minority organizations to FEI chapters.
In order to make this diversity initiative a success, we are forming a task force of interested members to discuss how best to reach these goals.
We have several members interested in this task force and are looking for more. Joe DiLorenzo and Travis McCready, both of the Boston Chapter, are already involved, and if you are interested in serving on FEI's diversity task force, please contact Serena Dávila at sdavila@FinancialExecutives.org or 202-626-7809.
n Resources n
Presentation on Early-Bird Allocation of the Purchase Price of an Acquisition and 141-R
When buying a company, acquirers spend a significant amount of time on financing and planning for integration. To avoid unpleasant surprises, more buyers are now paying attention up front to the required accounting for intangible assets and goodwill.
These pre-acquisition valuations provide evidence whether a proposed acquisition will be accretive. For more information on the benefits of pre-acquisition valuations before a purchase, Valuation Research Corp. discusses why SFAS 141 and SFAS 142 make it critical for buyers to consider how intangibles will impact financial reporting, and reviews examples from other companies and the proposed SFAS 141-R. Click here to review a presentation from Valuation Research Corp. and FEI.
FEI Members: Purchase Compensation Books at Reduced Prices
As part of a special marketing arrangement between FEI and WorldatWork (formerly the American Compensation Association), FEI members can now purchase any book from the WorldatWork Bookstore at deeply reduced prices previously available only to WorldatWork members. WorldatWork publishes reliable, up-to-date books and desk references about employee and executive compensation matters that are read by compensation professionals and financial executives at companies of all sizes in all industries.
Visit www.worldatwork.org/fei or call WorldatWork Customer Relationship Services Advisers toll-free at 877/951-9191. When placing your order online or on the phone, reference Priority Code WSOBK206A in order to receive the special member price on any book you purchase. This special offer for FEI members expires on Sept. 30.
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n Webcasts n
September 26 at 2 pm ET, 11 am PT
Job Search After 50: What You Can Do To Get Age On Your Side
Free to FEI members; $50.00 non-members.
In spite of laws that protect American Workers over the age of 40, everyone knows that age discrimination is alive and well when it comes to searching for a corporate job. Most employers don't intend to discriminate, but their attitudes, culture and organizational design may have the effect of excluding some of their most valuable prospective employees. During this webcast, Laura Hill, president of Careers in Motion LLC, will provide useful insights and recommendations on overcoming age discrimination in your job search, including:
- Hurdles to expect when looking for a new job and interviewing
- How to focus your job search efforts most productively
- Making age and experience a positive factor
- How to keep money from standing in the way
September 26 at 12 noon ET, 9 am PT
GE Healthcare - Extending Performance Management Beyond Financial Planning
Sponsored By Longview Solutions
Webcast. Free to FEI members and non-members. 1 CPE Credit available.
Join industry expert Craig Schiff, CEO of BPM Partners and Graham Bauerle, Senior Financial Analyst of GE Healthcare, as they discuss best practices for reducing the pain associated with budgeting, forecasting and consolidation, while extending the impact beyond finance and maximizing the return on their Corporate Performance Management (CPM) investment. Learn how GE Healthcare, with help from Longview Solutions, has improved its planning process and extended CPM beyond traditional planning.
n FERF Update n
November 15 Conference
Academe Meets Practice - New York City
Sponsored by FERF and Baruch College
Complimentary registration. 4 CPE Credits.
Register and get more information here.
Funded by donors of the Corporate Accounting Policy Seminar (CAPS) and presented by Financial Executives Research Foundation (FERF) and Baruch College, this conference is intended to foster interaction between corporate executives and business school professors, convey a better understanding and finer appreciation of real-world challenges faced by financial executives and enable academics to design better business school programs and produce better educated graduates.
Roundtables on Fair Value and Sarbanes-Oxley Act Compliance: Costs and Benefits.
PHILIP AMEEN, General Electric Co.
DOUGLAS CARMICHAEL, Baruch College
ALLAN COHEN, Time Warner
CRAIG EMRICK, Moody's Investors Service
GREG JONAS, Moody's Investors Service
BJORN JORGENSEN, Columbia University
ALFRED M. KING, Marshall & Stevens (valuation company)
LINDA MACDONALD, Financial Accounting Standards Board (FASB)
ZOE-VONNA PALMROSE, Securities and Exchange Commission (SEC)
KRISTANNE POND, E. I. du Pont de Nemours & Co.
EDWARD RIEDL, Harvard University
KATHRYN RYAN, JP MorganChase
LOU THOMPSON, Kalorama Partners and Genesis, Inc.
n Conferences n
October 26-27, FEI's Private Company Forum
This day-and-a-half-long executive seminar addresses the diverse information needs of the private company financial executive. A full agenda will be available soon. To register, click here.
- Alternative Funding and Investment Strategies
- Negotiating and Influencing for Success
- State and Local Taxes - Managing the Ever-Changing Environment
- Systems Controls: Best Practices for Private Companies
- Private Companies: In Pursuit of Sustainable Growth
- FASB Initiatives Affecting Private Companies
- And more!
n Job Listing n
Job 11655 - CFO
West Coast educational facility is seeking a strategic financial management partner to join the CEO's team of top advisors and assist in the achievement of the company's operational and financial objectives. Reporting to the President and CEO, the CFO will work closely with him and the Board of Advisors to plan, organize and direct all aspects of the financial and fiscal management of the company's operations, in accordance with generally accepted accounting principles and all regulations and statutes related to the private post-secondary education industry. The CFO will provide leadership in the development and administration of policies and processes for accounting, treasury, finance, real estate, information systems, internal controls, auditing and reporting. The CFO will assist in establishing strategic operational and financial policies and objectives and in their implementation and attainment. Required experience: At least three years in a similar role, in a highly regulated industry, with an operating budget of $50 million or more, as well as at least 10 years of overall experience in accounting and financial management, with a record of increasing responsibility for multi-faceted, multi-location operations.
For further details about this job opportunity and to view more jobs, visit the FEI Job Center
n New Member Welcome n
Congratulations to all the new elections in the last 30 days. See a complete list.
n Resources at www.FinancialExecutives.org n
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