Range Factor: FASB Eyes Broader Fair-Value Disclosures

Prompted by requests from investors and the Securities and Exchange Commission, the Financial Accounting Standards Board has proposed that companies broaden their disclosures of assets and liabilities to include a range of possible fair-value measurements.In a proposal issued Friday that would re...

By David Katz • Aug. 31, 2009

Countdown Begins on “AHYDO” Exception

A tax provision included in the stimulus package passed by Congress earlier this year brought relief to issuers of debt instruments classified as applicable high yield debt obligations (AHYDOs). But the provision is set to expire at the end of the year, unless the Treasury Secretary deems it prud...

By Robert Willens • Aug. 31, 2009

Explore the Trendline➔

Tax policy shifts: What CFOs need to know to stay ahead

Discover how evolving tax policies are creating new opportunities and challenges for CFOs.

By CFO.com staff

SEC Names Kroeker Chief Accountant

Securities and Exchange Commission chairman Mary Schapiro has chosen one of the regulator’s insiders to lead the office that drives the financial-reporting policies for U.S. publicly traded companies.Schapiro named James Kroeker, a two-year SEC veteran, as chief accountant on Tuesday. He has been...

By Sarah Johnson • Aug. 25, 2009

A Tax Break for Selling Toxic Assets?

A new private letter ruling issued by the Internal Revenue Service uses a cascade of interconnected tax rules to illustrate that selling off some toxic assets to a government entity will produce a tax deduction. The breadcrumb trail of tax rules that lead to the final determination are fairly str...

By Robert Willens • Aug. 24, 2009

Dear CFO: Watch Your Loan Loss Reserves

The latest “Dear CFO” letter from the Securities and Exchange Commission focuses on how to account for loan loss reserves, a thorny issue the regulator is spending more time reviewing.The letter, which was publicly released this month, was generic in nature in that it was not addressed to a speci...

By Marie Leone • Aug. 21, 2009

Will Bank Regulators Diverge from GAAP?

Bank regulators are set to discuss accounting standards next week, with an aim toward determining the potential affects that off-balance-sheet rules may have on some financial institutions. During the past year, bankers have fretted about new accounting rules that would force them to bring back o...

By Marie Leone • Aug. 20, 2009

FASB Rethinks Lawsuit-Accounting Plan

It’s been nearly a year since the Financial Accounting Standards Board stalled its project to require companies to provide new disclosures about potential losses from lawsuits. The controversial proposal had sent corporate attorneys and auditors into a tizzy over the prospect of having to include...

By Sarah Johnson • Aug. 20, 2009

How Much Should You Reveal to the IRS?

In the latest round of the three-year standoff between Textron and the taxman, the manufacturing conglomerate is on the ropes. Federal appeals judges recently found in favor of the Internal Revenue Service, which has been seeking Textron’s tax accrual papers under the assumption that the document...

By Sarah Johnson • Aug. 19, 2009

Get Ready for the Next Fair-Value Showdown

Sometime late this year, the Financial Accounting Standards Board will reveal its cards. That is, FASB will reveal more details about how companies — particularly financial institutions — should value their financial assets and liabilities at fair value. A FASB proposal that is out for public com...

By Robert Willens • Aug. 18, 2009

Booking a Tax Benefit for Barnes & Noble Founders

Barnes & Noble Inc. is getting back into the college bookseller business. Last week, the company announced its intentions to purchase the stock of Barnes & Noble College Booksellers Inc. (B&N College) from its sole shareholders, Leonard and Louise Riggio, the founder and chairman of B...

By Robert Willens • Aug. 17, 2009

SEC Zeroes In on Sale-leasebacks

The Securities and Exchange Commission has settled a four-year-old case against a construction-equipment manufacturer for a string of alleged fraudulent schemes that resulted in criminal charges for two CFOs and civil charges against a third.Yesterday the SEC announced that Terex will pay $8 mill...

By Sarah Johnson • Aug. 13, 2009

Simplified Reporting: Forgotten in the Crisis?

August 2008 was a hopeful time for advocates of principles-based accounting. The United States had a new plan to adopt global accounting standards, which are considered to allow for more judgment than U.S. generally accepted accounting principles. And an advisory group to the Securities and Excha...

By Sarah Johnson • Aug. 12, 2009

PepsiCo Beats the Others “Old and Cold”

Pepsico Inc. has reached an agreement to acquire its two largest bottling companies, Pepsi Bottling Group, based in Somers, New York, and PepsiAmericas, based in Minneapolis. The transaction is conditioned on, among many other things, securing an opinion of counsel that the acquisitions will, in ...

By Robert Willens • Aug. 10, 2009

FASB Shows “Sensitivity” to Fair Value

The Financial Accounting Standards Board voted on Wednesday to issue a proposal requiring companies to describe how vulnerable their sketchiest valuations are to changes in the factors they use to price their assets and liabilities.Overruling a suggestion by its staff to omit such information fro...

By David Katz • Aug. 6, 2009

Is the Credit Tussle Easing?

Credit managers see a light at the end of the downturn tunnel. The National Association of Credit Management reports that its monthly index is likely inching toward 50, which would indicate the economy is growing.The last time the index — based on survey results of about 1,000 trade credit manage...

By Sarah Johnson • Aug. 4, 2009

GE Settles Accounting Fraud Charges

Some members of the General Electric accounting staff worked hard to figure out ways to hide the negative accounting impacts of transactions booked in 2002 and 2003, according to court documents released by the Securities and Exchange Commission.In fact, the SEC complaint relates several instance...

By Tim Reason and Marie Leone • Aug. 4, 2009

Take It Back: IRS Rules on Rescinding a Merger

In what looks like an explanation for a corporate “do-over,” the Internal Revenue Service issued guidance in December to take companies through the steps of backing out of a merger. The private letter ruling, dated December 12, 2008, lays out the situation, and its resolution, in the following wa...

By Robert Willens • Aug. 3, 2009

The New Crisis Report: What’s in It for CFOs?

A global advisory group released 37 pages of recommendations on Monday discussing how regulators, accounting standard–setters, and — to some extent — CFOs can help prevent the next financial crisis, and work to fix existing “weaknesses” in accounting standardsThe report is the work of the Financi...

By Marie Leone • July 31, 2009

PCAOB: Experts Only for Final Audit Reviews

The Public Company Accounting Oversight Board has approved a new rule prohibiting audit firms from allowing lower-level employees to conduct final reviews of clients’ financials before releasing opinions.Under the new Auditing Standard No. 7, such reviews — which the PCAOB officially calls “engag...

By Sarah Johnson • July 28, 2009

Backdating Returns to the Spotlight

In 2006 the Internal Revenue Service became aware of instances in which stock options were granted with exercise prices that were less than the fair market value of the stock on the date of grant. In many cases, this discount resulted from a discrepancy between the purported grant date (on which ...

By Robert Willens • July 27, 2009

Companies: New Lease Rule Means Labor Pains

Standard-setters have more than comment 150 letters to sort through before they can finish crafting a new rule for how companies account for leases, a project that has been under way for three years.Some companies — particularly those such as airlines, retailers, and railroad companies that will ...

By Sarah Johnson • July 21, 2009

Companies Exasperate SEC Accounting Chief

A high-ranking accountant at the Securities and Exchange Commission took a pair of swipes Friday at the corporate community, showing frustration over the response to two major accounting standards initiatives.The SEC’s Division of Corporation Finance has been receiving a “surprisingly” large numb...

By David McCann • July 17, 2009

Leadership in Finance: Corning’s James Flaws

You don’t normally associate the word “resilient” with glass. Yet resilience is exactly the quality that’s seemed to have helped Corning, the 158-year-old glass-making giant, survive two disastrous economic downturns over the last decade. Indeed, following a strong contraction in the supply chain...

By David Katz • July 14, 2009

Tax Relief for Bond Interest Has a Hitch

During the 1980s, many deals were financed, at least in part, with “deferred interest” debt securities. Under the original issue discount (OID) rules, however, the interest was deductible for tax purposes as it accrued, even though its payment was delayed, sometimes quite far into the future. Con...

By Robert Willens • July 13, 2009

Audit Overseer Faults BDO, Grant Thornton

Annual inspection reports for BDO Seidman and Grant Thornton, released last Thursday by the Public Company Accounting Oversight Board, criticized some of the audit testing procedures and practices at the two large accounting firms.The review of BDO focused mainly on issues related to testing cont...

By Marie Leone • July 13, 2009