11/18/2009
To FEI Members:
Earlier this week, we completed a very successful Current Financial Reporting Issues Conference and Hall of Fame – it was FEI’s 28th annual conference and 4th annual Hall of Fame. Speakers from the SEC, FASB and IASB provided updates on hot topics, including things to keep in mind for year-end reporting as well as anticipated new standards. Below are links to some highlights from the conference.
Financial reporting issues are receiving a great deal of attention these days, not only within our membership, but by members of Congress as well. A potential amendment to the House version of the Financial Regulatory Reform bill could provide certain powers to a systemic risk council that would impact accounting standard-setting. FEI’s Committee on Corporate Reporting and Committee on Private Companies-Standards both filed letters objecting to legislation that would interfere with FASB’s independent standard-setting process.
See below for more information and look to the December issue of Financial Executive magazine, Washington Insights column, for expanded analysis of the legislation.
Marie N. Hollein
Table of Contents
REGULATORY AND LEGISLATIVE NEWS
· FEI Committees Write Congress In Support Of FASB Independence
· FASB, IASB Reaffirm Commitment To June 2011 Convergence Goal
· FASB Board Meeting Update
· President Obama Establishes Interagency Financial Fraud Enforcement Task Force
· SEC Announces Agenda, Panelists for Annual Small Business Forum
· Climate Change Switches to Low Power
· Progress Continues on Financial Reform, Derivatives Bills
· Majority Leader Reid to Unveil Health Reform Proposal to Caucus
NEWS TO USE
· Highlights from FEI CFRI Conference, Hall of Fame
FERF UPDATE
· Benchmarking the Finance Function
· Goodwill Impairments
· Year Two of the SEC’s XBRL Mandate: Caution and Opportunities on Compliance Requirements
· Get on Board: Should You Serve as a Corporate Director Today?
· Interviewees Needed for a New Research Project on Factors Affecting Management Discussion and Analysis (MD&A) Disclosures
WEBCASTS
· Federal Tax Update: What Private Companies Need to Know Before Year-End
· Financial Reporting in Multiple Jurisdictions: What Should Multinationals Expect in 2010?
CONFERENCES & EVENTS
· International Financial Reporting Standards (IFRS)
· Accounting for Derivative Instruments and Hedging Activities
· Fair Value Boot Camp Topic 820 (FAS 157)
· Internal Communications Employee Engagement Workshop
FEI JOB LISTINGS
· Job ID: 20730 Chief Financial Officer
WELCOME TO OUR NEW MEMBERS!
RESOURCES
REGULATORY AND LEGISLATIVE NEWS
FEI Committees Write Congress In Support Of FASB Independence
Yesterday, Rep. Ed Perlmutter (D-Colo.) confirmed in this press release that he intends to offer an amendment to the House Financial Services Committee’s version of a systemic risk bill. The amendment, co-sponsored by Rep. Frank Lucas (R-Okla.) would impact accounting standardsetting by assigning certain powers to a systemic risk council that could directly or indirectly affect the current standard-setting model of FASB.
FEI’s Committee on Corporate Reporting (CCR) and FEI’s Committee on Private Companies Standards (CPC-S) filed comment letters with the Chair and Ranking Member of the House Financial Services Committee, noting their objection to and concern with amendments that would impact the independent accounting-standard setting process. (See CCR letter and CPC-S letter.)
Several speakers at FEI’s Current Financial Reporting Issues conference this week also spoke out against politicizing accounting standard-setting.
Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, said last week he has no plans to include anything relating to this issue in the Senate version of the bill, so the ultimate prospects for any legislation that could impact FASB are still uncertain.
FEI is monitoring this issue, and will post updates on www.financialexecutives.org.
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FASB, IASB Reaffirm Commitment To June 2011 Convergence Goal
On Nov. 5, FASB and IASB announced the release of a 23-page joint statement that reaffirms their commitment to improve International Financial Reporting Standards and U.S. generally accepted accounting principles, and to bring about their convergence by June 2011, through completion of the major convergence projects outlined in the FASB-IASB Memorandum of Understanding. The joint statement outlines plans and milestone targets that will guide completion of the major projects by the June 2011 target date. The boards also stated plans to meet monthly in joint session (by videoconference or in person) toward reaching this goal.
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FASB Board Meeting Update
Earlier today, the FASB and IASB boards met jointly by videoconference. Results of the meeting will be posted in a Summary of Board Decisions in FASB’s News Center.
Separately, the FASB board met yesterday and agreed on a definition of amortized cost for its Financial Instruments project, as noted in FASB’s Summary of Board Decisions. Read more about recent FASB, IASB activity in FEI’s FASB, IASB News Roundup.
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President Obama Establishes Interagency Financial Fraud Enforcement Task Force
Yesterday, President Barack Obama issued an executive order establishing an Interagency Financial Fraud Enforcement Task Force. Led by Department of Justice (DOJ) Attorney General Eric Holder, the task force, which includes Treasury Secretary Timothy Geithner, Housing and Urban Development (HUD) Secretary Shaun Donovan and U.S. Securities and Exchange Commission (SEC) Chairman Mary Schapiro, will work with other states and federal agencies to investigate and prosecute significant financial crimes. Read more in this interagency press release.
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SEC Announces Agenda, Panelists for Annual Small Business Forum
Last week, the SEC announced the agenda and panelists for its annual Small Business Forum, set to take place this year on Nov. 19. (See SEC press release.) Read more about recent SEC and PCAOB activity in FEI’s SEC, PCAOB News Roundup.
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Climate Change Switches to Low Power
Senator Max Baucus (D-Mont.) in his new position as leader of the Senate climate change efforts, recently said that the bill should be expected to reach first markup in January 2010, and will finally go to the floor next spring. This date was probably chosen in response to some opposition from Senate Democrats like Branche Lincoln (D-Ark.), who expressed wanting to focus for more attention on financial regulatory reform before tackling the climate. Baucus’ willingness to compromise on the timing of the legislation is a demonstration of his traditionally moderate politics, which is expected to bring more Senators to the table than previous leadership on the bill. However, moving the climate legislation closer to midterm election time could also seriously delay further action on the issue as Senators shy away from controversial topics of debate. Read more here.
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Progress Continues on Financial Reform, Derivatives Bills
Financial regulatory reform is the next hot issue in the House, set for floor action in mid-December. Though the reform probably will not garner as much press attention as the health-care legislation, it is likely to have a sizable effect on financial executives. The House Financial Services and Agriculture Committees have been working to create bills that incorporate financial issues of derivatives, credit rating agencies, consumer financial protections and systemic risk regulation. Both bills will be consolidated before coming to the floor sometime in mid-December, and a long floor debate is then expected.
Last week, Senate Banking Chairman, Chris Dodd released his draft omnibus Financial Regulatory Reform package, which largely mirrors legislation proposed by the U.S. Treasury earlier this year. The derivatives reform issue remains one of the most important to businesses that widely use the financial products as an important hedge to shield them from volatile price fluctuations. While the House Agriculture bill defines clear exemptions for end-users from clearing their derivatives transactions, the Barney Frank (D-Mass.) Financial Services bill allows regulators to determine that exemption, and Chairman Dodd’s bill allows regulators and clearinghouses this authority. Click here to read more.
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Majority Leader Reid to Unveil Health Reform Proposal to Caucus
Senate Majority Leader Harry Reid (D-Nev.) is set to unveil his health-care reform legislation to his Democratic caucus today in an early evening meeting. Reid was expected to receive the Congressional Budget Office’s (CBO) final cost estimates today, after he sent a menu of health-care proposals to the CBO three weeks ago. Reid has been awaiting the cost estimates to ensure that the final numbers are within President Obama’s price tag parameters of less than $900 billion and fully funded. The Democratic leadership has shed little light on what health reform provisions they plan to unveil at today’s meeting.
Keeping in mind that Reid’s short-term goal is getting to 60 votes to avoid a Senate filibuster, and sources within leadership have indicated that they are unsure if moderate Democrats will vote with their caucus to move the process forward. Many of those moderates are awaiting scores from CBO and have asked for at least 72 hours to review the bill’s text before a vote to end Republican objections on the motion to proceed with the bill. Even if the Democrats are able to garner the 60 votes necessary to end a GOP filibuster, they must obtain another 60 votes to invoke cloture on the bill – a task that could be made difficult by quarrels among the Democrats on whether the bill should contain a version of a government-run insurance program that would compete with private plans.
To read about Majority Leader Reid’s optimism on getting to the 60-vote threshold, please click here.
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NEWS TO USE
Highlights from FEI CFRI Conference, Hall of Fame
Highlights from FEI’s 28th annual Current Financial Reporting Issues Conference (CFRI 2009) and the 4th annual Hall of Fame have been posted on the FEI Web site.
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FERF UPDATE
Benchmarking the Finance Function
This report from FERF and Robert Half International examines the results of the first-ever benchmarking survey of the staffing, compliance, internal controls, and other costs of the finance function. Findings can help companies:
- Recognize areas for improvement (in both the short and long- term);
- Gauge performance levels against those of their peers;
- Identify best practices;
- Resolve performance deficiencies; and
- Set appropriate future performance measures.
Key metrics from the study include:
- The average cost, as a percentage of a company’s total revenue, of internal staff in the finance and accounting function is 2.63 percent (cost is defined as base salary, benefits, and bonus);
- Within the finance and accounting functions, employees engaged in transaction processing represent the largest part of the mix, with an average cost of 8.76 percent; and
- Nearly half (48.12 percent) of survey respondents reported that their payroll function is outsourced.
A complimentary copy of the Benchmarking report can be downloaded at the FERF Bookstore.
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Goodwill Impairments
FASB’s standard for the accounting for goodwill, Accounting Standards Codification (ASC) Topic 350 (originally issued as SFAS No. 142), specifies that goodwill and other intangibles must be periodically tested for impairment.
This report from FERF and Duff and Phelps looks at recent goodwill impairments from and identifies companies’ processes fro identification, recognition and disclosure. Details include:
· An empirical analysis of goodwill impairments recognized by U.S. publicly-traded companies in 2008;
· A survey of senior financial executives who identified reasons for goodwill impairments and the valuation techniques used; and
· Interviews of senior financial executives who described the process used to measure goodwill impairments.
A complimentary copy of the Goodwill Impairment report can be downloaded at the FERF Bookstore.
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Year 2 of the SEC’s XBRL Mandate: Caution and Opportunities on Compliance Requirements
In January 2009, the SEC issued rules on how companies should prepare and submit an XBRL Exhibit. In the initial year, financial statement footnotes and financial statement schedules are allowed to be tagged individually as a block of text. The year two requirements will exponentially expand the extent of tagging that is required.
This Issue Alert provides a description of:
· Significant changes in Year 2;
· Background on the SEC’s XBRL mandate;
· Benefits of automating the “last mile” of the financial reporting process; and
· An implementation road map.
A complimentary copy of the Year 2 XBRL Mandate Issue Alert can be downloaded at the FERF Bookstore.
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Get on Board: Should You Serve as a Corporate Director Today?
Senior financial executives may wonder whether they should serve on a board of directors, and whether they should be identified as “the financial expert.”
To address these concerns, FERF brought together a group of FEI members who serve on corporate boards to discuss. This alert summarizes practical expertise and answers the following questions:
· Why serve on a board of directors?
· Is there a director shortage?
· What experience and attributes are most valuable?
· What is the opportunity for financial executives?
· How do you get selected for a corporate board?
· What are steps that you can take to help acquire a board seat?
· Is it the right board for you?
· What should you ask before joining a board?
A complimentary copy of the Get on Board Issue Alert can be downloaded at the FERF Bookstore.
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Interviewees Needed for a New Research Project entitled Factors Affecting Management Discussion and Analysis (MD&A) Disclosures
This new research study aims to identify key factors which influence the preparation, scope and content of management discussion and analysis (MD&A) reports by SEC registrants.
The project will identify steps in preparing the MD&A, how its scope and content are decided, and the factors which influence each step. The research team will investigate how the institutional setting in the U.S. affects the preparation process for U.S. and non-U.S. firms.
The research team plans to provide input to the International Accounting Standards Board’s Management Commentary Project, which has an Exposure Draft open for comment until March 1, 2010. They would like to interview CFOs and Chief Accounting Officers (or designated representatives) for this project. We hope that you are able to share your experiences.
If you are interested in participating, please contact Tom Thompson, FERF Research Associate at 973.765.1007 to schedule a convenient time for your interview.
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WEBCASTS
Federal Tax Update: What Private Companies Need to Know Before Year-End
Presented by Grant Thornton
Dec. 2 | 2:00 p.m. | 90 Minutes | 1.5 CPE credits
Free to FEI Members and Nonmembers
Register here.
This important year-end tax update webcast will help attendees take advantage of potential tax savings, avoid traps and pitfalls and prepare for the upcoming tax season. Professionals from Grant Thornton’s National Tax Office will discuss:
· what’s new for 2009, and how it will affect your 2009 return;
· year-end planning ideas, what still works and what’s new; and
· potential changes to the estate and income taxes in 2010 and beyond and how to plan for them now.
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Financial Reporting in Multiple Jurisdictions: What Should Multinationals Expect in 2010?
Presented by Thomson Reuters and Tax Executives Institute
Dec. 10 | 2:00 p.m. Eastern | 2 Hours | 2.0 CPE credits
Free to FEI Members and Nonmembers
Register here.
The two-hour webcast will provide updates on:
· IASB Regulatory Update: Current and emerging standard-setting developments emphasizing joint IASB/FASB projects.
· Tax Accounting Rules: Application and disclosure trends, changes to and interpretations of the standards, similarities/differences with standards, and the tax accounting implications of the IFRS Small & Medium Entity standard.
Speakers Include:
· John Smith, Board Member, International Accounting Standards Board
· C. Chester Abell, Director of Tax Accrual Services, Tax Accounting and Risk Advisory Services Partner, Ernst & Young, LLP
· Katrina Kimpel, Partner, Assurance Services, Professional Practice - Accounting, Ernst & Young, LLP
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CONFERENCES & EVENTS
International Financial Reporting Standards (IFRS)
Presented by Executive Enterprise Institute (EEI) | Co-Sponsored by FEI
FEI Members save $200 by using discount code FEI-9111.
· December 2-3, 2009 Las Vegas, NV Register here.
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Accounting for Derivative Instruments and Hedging Activities
Applying Topic 815 (Formerly FAS 133/149)
Presented by Executive Enterprise Institute (EEI) | Co-Sponsored by FEI
FEI Members save $200 by using discount code FEI-9109.
· December 2-3, 2009* New York, NY Register here.
* Pre-conference workshop: Dec. 1. Separate registration required.
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Fair Value Boot Camp Topic 820 (FAS 157)
Presented by Executive Enterprise Institute (EEI) | Co-Sponsored by FEI
FEI Members save $200 by using discount code FEI-9106.
· December 10-11, 2009 New York, NY Register here.
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Internal Communications Employee Engagement Workshop
Hosted by Pacific Conferences | Co-Sponsored by FEI
Dec. 3 | Hong Kong
Regular Rate: $995
FEI members received a 10% discount.
Register here.
This one-day program is designed for you to understand how employee engagement communications can be a critical and strategic tool on the path to recovery. It will focus on both the principles and practicalities of planning, implementing and measuring effective internal communications and employee engagement campaigns.
To view the full agenda for this event, click here. If you have any questions or need more information about this event, please contact Lorraine Tiang.
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FEI JOB LISTINGS
Job ID: 20730 Chief Financial Officer
Location: Diamond Bar, California
One of the largest and most technologically sophisticated environmental regulatory agencies in the nation is looking for a Chief Financial Officer. The potential candidate should be highly motivated, a results-oriented leader with the proven ability to establish and maintain cooperative working relationships with both internal and external stakeholders; demonstrate discretion, diplomacy, and integrity; function effectively under pressure; analyze and anticipate business needs, think proactively, and develop workable alternatives; and communicate effectively both orally and in writing.
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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