6/16/2010
To FEI Members:
FEI’s highly-regarded research affiliate, the Financial Executives Research Foundation, recently published its fourth annual Financial Executive Compensation Survey. Please take a moment to review FERF’s work on this topic.
In addition, the House and Senate are busy finishing up a four-week work period before recessing during the Fourth of July holiday. Congress plans to finish up the conference committee process on the Wall Street Reform and Consumer Protection Act (H.R. 4173), work on a ‘tax extenders’ bill and potentially pass a “small business jobs” package that could include several important tax relief provisions for privately held companies. To learn more about these and other issues, read on below.
As summer heats up, I hope you will check out the many valuable webcasts we are offering by visiting the Events section of this newsletter and the Events section of our Web site. In particular, accounting for private companies is a hot topic. You can get the latest info on a webcast next week cosponsored by Grant Thornton and FEI, details are below. I look forward to seeing you at upcoming chapter, leadership, committee and other FEI meetings as well.
Marie N. Hollein
Table of Contents
REGULATORY AND LEGISLATIVE NEWS
· Senate Has Trouble Passing Tax-Extenders Bill
· Estate Tax Extension could be added to Small Business Jobs bill in Senate
· Conferees Make Changes to Credit Rating Agencies and FDIC Insurance
· Congress Will Consider Allowing President Power to Force Spending Cuts
· Climate Change Supporters Advocate for Addition to Potential Energy Bill
· Grant Thornton and FEI to Provide Update on Private Company Accounting
· Recent FASB Board Meetings
· FASB, IASB Modify Convergence Timeline
· IASCF Seeks To Fill Vacancies for Trustees
· Additional FASB, IASB News
FERF UPDATE
· 2010 Financial Executive Compensation Survey
· Software as a Service: Experiences of SMBs
· Don’t Miss Out! Benchmarking the Finance Function Survey
WEBCASTS
· Gain Control over Your Financial Close – Confidence in the Process, Trust in the Numbers
· Private Company Financial Reporting: Time for a New Approach?
· SMBs Experience with Software as a Service (SaaS)
· M & A Deal Flow in the Post-Recessionary Period
CONFERENCES & EVENTS
· Washington Policy Conference
· 29th Annual Current Financial Reporting Issues Conference – Save the Date!
FEI JOB LISTINGS
· Job ID: 21071 – Controller
WELCOME TO OUR NEW MEMBERS!
RESOURCES
REGULATORY AND LEGISLATIVE NEWS
Senate Has Trouble Passing Tax-Extenders Bill
The US Senate is having difficulty in gathering enough votes to finish debate over HR 4213, known as the ‘Tax Extenders’ bill, which extends the Research and Development Tax Credit as well as several other expired tax provisions. A great deal of debate has also occurred over the S-Corp payroll provision, a proposed revenue raiser that would impose a 15.3-percent payroll tax on many active S Corporation’s (non-wage) incomes. Supporters of the bill claim that the provision would prevent business owners from avoiding employment taxes, yet others maintain that the provision punishes many employers in order to get at a few bad actors.
Sens. Olympia Snowe (R-ME) and Mike Enzi (R-WY) proposed an amendment that would cut the payroll provision - Section 413 - from the bill and there has been an effort by Sen. Max Baucus (D-MT) to pare down the provision. The senators maintain that the S-Corp provision in the bill could debilitate American entrepreneurs and make it virtually impossible for them to hire new workers. FEI’s Committee on Private Company Policy supports the Enzi/Snowe amendment and has signed on to a letter to the Senate Finance Leadership expressing their support. To view the letter click here. The Senate will likely continue to debate and amend this legislation into next week, paring down the overall cost.
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Estate Tax Extension could be added to Small Business Jobs bill in Senate
The Senate will begin work on a small business jobs packaged designed to jump start small business lending and potentially provide additional tax breaks for smaller companies in the next few weeks. There has been some discussion that an estate tax fix could be included in this package. FEI’s Committee on Private Company Policy continues to support a compromise effort by Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) to lower the top estate tax rate to 35% with an individual exemption of $5 million, which would be more favorable than extending 2009 rates or the expected 2011 rates if no action is taken. Senators would need to find a way to offset these lower rates, and thus the path forward is ununcertain. There are only a few short weeks before Congress recesses for Fourth of July.
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Conferees Make Changes to Credit Rating Agencies and FDIC Insurance
The House-Senate conference on HR 4173 (Wall Street Reform and Consumer Protection Act) began last week. In a few short days, progress has already been made in reconciling differences between the two bills, but more difficult decisions must be made over the next few weeks on several contentious issues.
The conference agreed to permanently set the Federal Deposit Insurance Corporation’s (FDIC) insurance deposit limit at $250,000, and to make permanent a program providing guarantees to all noninterest bearing accounts. Tentatively, the conferees also decided to strip out a provision originally drafted by Sen. Al Franken (D-Minn.) that would establish a lottery for randomly assigning rating agencies to issuers. Instead, the SEC will be directed to study potential conflicts of interests between issuers and rating agencies. Over the next few weeks, the conferees will continue their debate and are expected to tackle various sections of the bill, including the much-debated oversight of the over-the-counter derivatives markets and how to craft an end-user exemption from that section of the bill.
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Congress Will Consider Allowing President Power to Force Spending Cuts
The Reduce Unnecessary Spending Act of 2010, is a House proposal that would give President Obama expedited recession authority, allowing him more power to force Congress to vote on whether to cut spending. This proposal will attempt to strike a balance between the line-item veto power that Congress granted in 1996, but was found unconstitutional by the Supreme Court in 1998, and the current system, which does not provide the President with such authority.
Speaker Nancy Pelosi (D-Calif.) said Friday that she supports the legislation and would begin to evaluate its potential for broad support within the chamber. Under the new plan, the President would have 45 working days after appropriations are passed to request elimination or rescinding of certain funds. Congress would then have 25 working days to issue an up-or-down vote on the cuts, the House going first. Senators John McCain (R-Ariz.), Tom Carper (D-Del.) and Russ Feingold (D-Wis.) introduced a companion bill in the Senate on June 9.
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Climate Change Supporters Advocate for Addition to Potential Energy Bill
Sen. John Kerry (D-Mass.) and Sen. Joe Lieberman (I-Conn.) announced Tuesday an EPA analysis of their draft climate change bill. This analysis determined that the legislation would cost the average American household $80 to $150 per year, less than $1 a day, says Kerry. The analysis also broke down the potential cost to corporations impacted by the bill.
The bill proposes firm cap-and-trade provisions and aims to reduce greenhouse gas emissions to 17 percent below 2005 levels by 2020. On Tuesday night, President Obama used his first Oval Office speech since taking office to make a push for the comprehensive energy reform that has been recently discussed. The Senate has floor time scheduled for such legislation in the coming month, though much uncertainty exists about where members lie on the many different proposals.
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Grant Thornton and FEI to Provide Update on Private Company Accounting
The Blue Ribbon Panel on Standard Setting for Private Companies, formed jointly this year by the Financial Accounting Foundation (which oversees FASB), the AICPA, and the National Association of State Boards of Accountancy held its second meeting on May 14 (view agenda here). The next meeting will take place on July 19.
Among the resource materials posted by the Blue Ribbon Panel in advance of its meeting was the FEI Committee on Private Company Standards (CPC-S) ‘working draft’ entitled, A Model Conceptual Framework for Private Company Accounting Standards. The AICPA Journal of Accountancy published highlights from the May meeting. Press articles on the April 12 meeting are also available, as well as official minutes.
Learn more about the Blue Ribbon Panel, the CPC-S working draft and views from some Grant Thornton representatives at an upcoming webcast.
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Recent FASB Board Meetings
This week, the FASB and IASB boards are holding joint board meetings via videoconference on topics including Lease Accounting, Liabilities (amendments to IAS 37), and Offsetting (balance sheet offsetting). As noted on the agenda, the insurance accounting discussion was cancelled.
Last week, FASB discussed its projects on (1) Insurance Contracts, (2) Disclosures about Credit Quality and the Allowance for Credit Losses and (3) Leases. Details are in FASB's Summary of Board Decisions.
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FASB, IASB Modify Convergence Timeline
As the most recent edition of Private Company Express went to press, we gave you a heads up that FASB and the IASB were expected to announce a revision to their convergence timeline.
Indeed, later on June 2, the boards issued a Joint Statement regarding a modification to the timetable set forth under the FASB-IASB Memorandum of Understanding (MoU) for completion of major convergence projects, to extend some projects beyond the most recently amended deadline of June, 2011.
Among the reasons noted by FASB and the IASB for this extension was stakeholder feedback. Letters sent by two FEI committees (FEI’s Committee on Private Company Standards, and Committee on Corporate Reporting) were among feedback the boards had received. Read more in this FEI Summary.
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IASCF Seeks to Fill Vacancies for Trustees
The International Accounting Standards Committee Foundation, which oversees the IASB, is currently seeking nominations to fill four vacancies on the IASCF board of Trustees for the term that begins Jan. 1, 2011 and ends Dec. 31, 2013. The nomination deadline is July 9. Further information is available here.
As previously reported, on May 11, the Trustees of the IASC Foundation published a report on Part 2 of the changes to the Foundation’s Constitution made as a result of the second part of their 2008-2010 Constitution review. A podcast by IASCF Trustee Sir Bryan Nicholson explaining the changes to the Constitution is also available.
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Additional FASB, IASB News
For more news on recent developments at FASB and the IASB, see FEI’s FASB, IASB News Roundup.
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FERF UPDATE
Latest FERF Research Now Available!
2010 Financial Executive Compensation Survey
The Financial Executive Compensation Survey, now in its fourth year, provides a year-to-year comparison of compensation for finance professionals. The study examines salaries, bonuses, long-term incentives and retirement benefits of more than 1,100 financial executives from both public and private companies, nearly half of whom are CFOs.
Private company finance functions reported much more stability than their public company counterparts in terms of staff levels. An additional shift in compensation was evident when salary increases between private and public companies were compared. While traditionally public companies have awarded higher salary increases, the average salary increase for public and private companies was identical for the first time in the four years this survey has been conducted.
The estimated average base salary increase of all respondents is 2.1 percent – a further decrease from 2009's low of 3.7 percent. More than half of all respondents (57 percent) stated that they did not receive a salary increase in 2010. While salary increases were the exception, virtually all public and private company CFOs (96 percent) reported receiving a bonus this year. The number of respondents who received an additional cash-based, long-term incentive award increased for the first time in the four years the survey has been conducted. For the fourth year in a row, the base salaries of public and private company CFOs remained proportionate to companies' annual revenues.
>>Download full survey results here.
>>View the press release in the FEI Press Room.
Detailed figures for base salary, bonuses, long-term and stock-based compensation, retirement benefits and perquisites are available online through PayCheck, FEI's online search tool. Responses can be searched based on all criteria, including title, company type and company size.
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Software as a Service: Experiences of SMBs
Software as a Service (SaaS) offers a number of tangible benefits, including cost containment, immediacy, availability, scalability and efficiency. However, there are a number of potential risks that need to be managed.
This research report will define and describe the benefits of SaaS as used by the finance function. It is based on interviews of ten senior financial executives from both publicly-held as well as privately-held small and medium-sized companies (SMBs), some of which have global operations. These executives actively use SaaS in their finance functions, and many of them were responsible for their company’s implementation of SaaS.
>>Download full report here.
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Don’t Miss Out! Benchmarking the Finance Function
Were you among the more than 400 people who downloaded FERF’s first ever Benchmarking the Finance Function report? If not, click here to download a complimentary copy of the 2009 report.
The 2nd Annual Benchmarking the Finance Function Survey from FERF, in collaboration with Robert Half International (RHI) will be open until July 16. Your participation will provide valuable data for fellow FEI members, regulators and the press, and will document current trends in finance.
The survey should take less than 30 minutes to complete. Since this survey will be sent to all Executive members of FEI, we ask for your e-mail address to avoid compiling duplicate responses from the same company. All responses are confidential, and participants will remain anonymous.
>>Take the survey here.
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WEBCASTS
Gain Control over Your Financial Close – Confidence in the Process, Trust in the Numbers
Presented by Oracle
June 17 | 12:00 p.m. Eastern | 1 Hour | No CPE credits available
Register here.
Join Miles Ewing, Performance Management Practice Leader at Deloitte, John O’Rourke, Vice President, Oracle EPM Product Marketing and Stephanie Maziol, Director, Oracle GRC Product Marketing, to discover how Oracle provides an end-to-end solution to deliver a fast, reliable and cost-effective financial close.
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Private Company Financial Reporting: Time for a New Approach?
Presented by Grant Thornton
June 22 | 1:00 p.m. Eastern | 1.5 hours | 1.5 CPE credits available
Free to FEI Members and Nonmembers
Register here.
Grant Thornton, in conjunction with Financial Executives International (FEI) is pleased to present a complimentary webcast on the latest developments in private company financial reporting. This webcast will include:
· Update on the Blue Ribbon Panel on Standard Setting for Private Companies
· The changing landscape of accounting and financial reporting
· The dueling paradigms of financial reporting
· Highlights from FEI's Committee on Private Company Standards
Featured presenters include:
· George Beckwith, Controller, National Gypsum Company and a member of FEI's Committee on Private Company Standards
· John Hepp, national partner in charge of Grant Thornton's Accounting Principles group
· Andy Thrower, immediate past national chairman of FEI's Committee on Private Company Standards
· Meredith Vogel, audit senior manager in Grant Thornton's National Audit Support group; Staff fellow of the Financial Accounting Foundation supporting the Blue Ribbon Panel on Standard Setting for Private Companies
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SMBs Experience with Software as a Service (SaaS)
Presented by NetSuite
June 23 | 1:00 p.m. Eastern | 1 hour | No CPE credits available
Free to FEI Members and Nonmembers
Register here.
It seems like everyone is talking about Cloud Computing and SaaS. But what are these technologies? Why are they being called “transformational”? What are the benefits and risks related to them? How does this technology impact the finance function?
To get the answers to these questions join us on this webcast. William M. Sinnett, Director of Research at Financial Executives Research Foundation, will present findings from in-depth interviews conducted with 10 senior financial executives from both publicly held and privately held small-and medium-sized companies (SMBs) who are actively using SaaS in their finance functions. Also participating on the webcast will be Calvin Jackman, Controller of Mycom North America, to share his company’s real-world experiences using SaaS ERP solutions.
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M & A Deal Flow in the Post-Recessionary Period
Presented by Merrill
June 24 | 11:00 a.m. Eastern | 1 hour | No CPE credits available
Free to FEI Members and Nonmembers
Register here.
Join us for an informative online panel discussion where we will reveal the results of a roundtable teleconference held on April 1. Participants discussed the demand for investment banking services, particularly as it relates to M & A, the motivations of current buyers and sellers, trends in deal structure such as pricing and financing and deal characteristics, including the current nature of due diligence.
In addition to the roundtable discussion, we will also present the most recent seven years of deal flow statistics in order to provide a broader base for comparison. This webinar will address drivers of M & A waves such as industry shocks, stock market valuation and capital market liquidity. Finally, we will include information reviewing post-acquisition stock price performance following “hot” and “cold” markets and a section on general M & A activity and deal characteristics.
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CONFERENCES & EVENTS
Washington Policy Conference
Sept. 20-21 | Washington Court Hotel | Washington, D.C.
Register here.
As Congress deliberates on dozens of sweeping policy initiatives this year, FEI is bringing together key business and government leaders to provide insights on considerations for senior-level financial executives and their companies.
General Sessions Include:
· Tax Reform Update: Facilitating American Competitiveness through Tax Reform.
· Energy: Strategies, Policy & Best Practices for American Business
· Decisions of Senior-level Financial Executives.
· Legislative and Regulatory Update: New Legislation and Regulations Currently Being Debated and What Senior-level Financial Executives Can Expect.
· Strengths, Weaknesses, Opportunities and Threats as Seen by Senior-level Financial Executives.
· What OMB Officials and Representatives from the Federal Reserve Predict for the Nation’s Fiscal and Monetary Policy.
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SAVE THE DATE!
29th Annual Current Financial Reporting Issues (CFRI) Conference
Nov. 15-16 | New York Marriott Marquis Times Square | New York City, NY
Focused on economic challenges and regulation reform, CFRI will detail the latest accounting and reporting developments from the FASB, SEC and IASB.
Key topics include FASB/IASB technical accounting updates, future of lease and contingencies reporting, revenue recognition, Controller’s Roundtable on top-of-mind business issues, Q&A with the FASB and the SEC and more.
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FEI JOB LISTINGS
Job ID: – Controller
Location: Houston, TX
Our growing family-oriented company is looking for a Controller who will be hands-on and have experience working in a small office. Primary responsibilities include, but are not limited to, preparing GAAP basis financial statements, all bookkeeping, general ledger and financials, working closely with CPA firm to get complete financial reporting package and utilizing QuickBooks with specialized software (Auto Star Solutions) for tracking auto loan payments, late fees and sales tax.
For further details about this job opportunity, click here.
To view more jobs, visit FEI’s Career Center.
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WELCOME TO OUR NEW MEMBERS!
Congratulations to all the new members accepted in the last 30 days. Click here to see a complete list.
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RESOURCES AT www.financialexecutives.org
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