Crisis Spawns Payables-Receivables Crunch

Following the last downturn in the financial markets earlier in this decade, after Enron imploded and internal-control reports became mandatory, controllers became CFOs’ best friends. But with liquidity now the watchword of the day, treasurers are the ones crowding into the finance chiefs’ office...

By Sarah Johnson • Nov. 6, 2008

Will a Single Accounting Standard Help?

Are the financial statement effects of switching to international financial reporting standards really just a grand illusion? A new report from Moody’s Investor Service suggests that might be the case.Moody’s says that, in general, companies making the change from local generally accepted account...

By Marie Leone • Nov. 6, 2008

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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

IFRS Back on Track?

The Securities and Exchange Commission is expected on Friday to formally release for comment its plan for switching publicly traded companies from the accounting standards they have used for decades to International Financial Reporting Standards.If the commission publishes the plan on Friday, it ...

By Tim Reason • Nov. 6, 2008

Accounting Guidance Smiles on Banks

Without fully suspending fair value accounting to help banks weather the credit crisis, regulators and standard setters are now making it clear that financial institutions can avoid the so-called mark-to-market methodology — at least some of the time.The latest clarification released by the Secur...

By Marie Leone • Nov. 5, 2008

London Calling: First Accounting Roundtable Announced

Accounting standards setters are working swiftly to address the global credit crisis by holding the first of three public roundtables in London on Friday, November 14. Less than two weeks ago, the International Accounting Standards Board and the U.S. Financial Accounting Standards Board jointly a...

By Marie Leone • Nov. 3, 2008

Not Fair

It takes something extraordinary to interest politicians in accounting standards. But these are clearly extraordinary times, and officials in Europe are digging deeper into accounting practices than ever in response to the financial turmoil. Specifically — and somewhat improbably — they are preoc...

By Jason Karaian and Marie Leone • Nov. 3, 2008

Are Anti-trust Penalties Deductible?

In a new memo released by the Internal Revenue Service on September 25, the tax agency provided clear guidance on whether fines and penalties arising out of a corporate lawsuit are tax deductible. According to the advisory — released as Field Attorney Advice Memorandum 20084301F — three states, d...

By Robert Willens • Nov. 3, 2008

Vendors Squeeze Circuit City

Following the release of its second quarter results, Circuit City’s liquidity position and the sharply worsened overall economic environment led some of its vendors to take “restrictive actions” involving the payment terms and credit they make available to the company, the electronics retailer an...

By Stephen Taub • Nov. 3, 2008

Undaunted: Global Fair-Value Guidance Evolves

No accounting rules were changed, and the guidance to clarify the rules stayed the same as well — except perhaps for the addition of some new examples. Yet in some ways, the 84-page document released today by the International Accounting Standards Board speaks volumes about the future direction o...

By Marie Leone • Oct. 31, 2008

Could the Crisis Crimp Convergence?

The road to creating a single set of global accounting standards could be about to hit a detour.An educational conference on international financial reporting standards, held in New York City last week, was so jammed with attendees that its organizer, the Foundation for Accounting Education, had ...

By Alan Rappeport • Oct. 31, 2008

For One Broken Deal, Blame the Accounting

Fair-value accounting drove Key Bank’s decision earlier this year to abandon all its acquisition plans. And the explanation of why may be instructive, fair value’s critics suggest.New business-combination rules require companies to apply fair value to financial assets and liabilities — the factor...

By Sarah Johnson • Oct. 30, 2008

Profit, Not Loss, Thanks to Fair Value Tweak

A recent accounting rule change issued by the International Accounting Standards Board seems to have staved off third-quarter trouble for at least one financial institution: Deutsche Bank. The Frankfurt-based bank reported that because it was able to reclassify some assets for accounting purposes...

By Marie Leone • Oct. 30, 2008

Sara Lee Cooks Up a Fair-value Restatement

Sara Lee Corp. restated its results for the past two fiscal years, and quarterly results for fiscal 2008, reflecting fair-value issues and other accounting changes.The maker of food and beverage and household and body-care products — including those sold under the Ball Park, Douwe Egberts, Hillsh...

By Stephen Taub • Oct. 30, 2008

Former FDIC Chief: Fair Value Caused the Crisis

In perhaps the most sweeping indictment of fair-value accounting to date, the chairman of the Federal Deposit Insurance Corporation during the 1980s savings-and-loan debacle told the Securities and Exchange Commission today that mark-to-market accounting rules caused the current financial meltdow...

By David Katz • Oct. 29, 2008

IRS Acts to Prop Up Some Debt Instruments in Slumping Markets

New guidance issued last month by the Internal Revenue Service addresses the current credit crisis and how it might affect a corporate debt instrument known as an “applicable high yield discount obligation” (AHYDO). In fact, the application of the new guidance will likely give corporate issuers m...

By Robert Willens • Oct. 28, 2008

Fair-Value Fight Packs a Punch

The push-back against fair-value accounting that began with grumblings from banks over large writedowns last year has escalated into a long, dragged-out battle that could muddy the independence of U.S. and international standard-setters from political persuasion. The battle lines will be drawn an...

By Sarah Johnson • Oct. 28, 2008

Fair Value: Lousy, But What’s the Alternative?

Fair value accounting may be imperfect, but it is better than the alternatives, according to Thomas Jones, vice chairman of the International Accounting Standards Board.At an industry meeting last week, Jones naturally sided with investors and accountants rather than bankers on the question of wh...

By Marie Leone • Oct. 27, 2008

Botched ERP Hookup Spurs Restatement

Overstock.com says it will restate its financial results for a five-and-a-half-year period because of problems in implementing an Oracle enterprise resource planning program.The controversial Internet retailer, which has aggressively sparred with short sellers and other hedge funds in the past fe...

By Stephen Taub • Oct. 24, 2008

Securitization’s Last Throes?

Tweaks to two accounting rules could bring down the market for asset-backed securitization, critics of the proposal contend.One rule change, to FAS 140, is the proposed elimination of qualified special-purpose entities, which provide a way for banks to keep securitized assets off their balance sh...

By Alan Rappeport • Oct. 24, 2008

Revenue Recognition Puts Cadence Off the Beat

Cadence Design Systems Inc. is restating its financial restatements for the first two quarters of 2008 to correct $24 million in revenue recognition errors. It is also reviewing how customer contracts signed during the first quarter were recognized instead over the duration of the contracts, begi...

By Roy Harris and Stephen Taub • Oct. 23, 2008

The Crisis over How to Audit in a Crisis

The Public Company Accounting Oversight Board, which oversees U.S. auditors, convened its standing advisory group on Wednesday to discuss the impact of the financial crisis on the auditing profession. Its conclusion: There’s a lot to worry about, included increased pressure for fraudulent behavi...

By Alan Rappeport • Oct. 22, 2008

Internal Audit Automation Set for Takeoff?

Software that supports the internal audit process is nothing new, but the field may be poised to head in a wholly different direction. In the best-case scenario, that direction will lead to more accurate audits, reduced costs for both internal and external audit, and elevated roles for internal a...

By David McCann • Oct. 22, 2008

Survey: Boards Are Often Blind to Major Risks

By a wide majority, directors of financial services firms believe that they had little chance of spotting the kinds of problems at their respective firms that plunged the world into a global financial meltdown.In a recent PricewaterhouseCoopers survey of more than 300 financial-company board memb...

By Stephen Taub • Oct. 21, 2008

Auditors to Help with Bailout? PwC and E&Y

The Treasury Department chose PricewaterhouseCoopers LLP and Ernst & Young to help implement its $700 billion bailout plan.The government agency said the firms will provide Treasury with the accounting and internal controls services needed to administer the complex portfolio of troubled asset...

By Stephen Taub • Oct. 21, 2008

How Bailout Loosens Accounting, Tax Rules

Banking regulators may not have suspended fair-value accounting to benefit the balance sheets of ailing financial institutions. But they did bend generally accepted accounting principles in the name of increased liquidity and the public good. What’s more, Congress gave banks permission to ignore ...

By Marie Leone • Oct. 21, 2008