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FASB

Hedge Accounting

This week the FASB issued a Discussion Paper to solicit input on how to improve, simplify, and converge the financial reporting requirements for hedging activities.  As you may recall, back in December we issued a comment letter to the FASB on their proposed hedge accounting requirements.   We are in the process of issuing a comment letter to the IASB on their proposed hedge requirements.  That comment letter is due to the IASB by March 9^th.  The Discussion (more…)

AFP

Our organization has been very vocal in stating our views on the proposed lease accounting changes.  In December we issued a comment letter to the FASB/IASB citing our concerns.   Subsequently, I attended one of the leasing roundtables held at the FASB headquarters in Norwalk where the FASB and IASB members listened to constituents discuss the pros and cons to the proposed standards, and worked with the Boards on devising alternative views that might also be considered.  As a result of our efforts, we were quoted in the following news publication:  http://www.imakenews.com/epi_hfco/e_article001993007.cfm?x=bhRGDKk,b9WD2Q9r,w

On March 3^rd, AFP will host a webinar on  the US and International rules proposed for hedge accounting this is currently out for comment given my Sylvie Monett-Houle, a partner at KPMG.    This webinar will discuss the pros and cons of the proposed changes, and how such changes may affect a company’s ability to manage its  risk exposure.  It (more…)

Private Company Accounting Standards

 The Blue Ribbon Panel wrapped up its analysis of whether there should be concessions made to current Generally Accepted Accounting Principles (GAAP) for nonpublic companies.  The Panel recommended that the Financial Accounting Foundation (FAF) trustees, who also oversee the Financial Accounting Standards Board (FASB), to create a separate private company standard setting board that will be responsible for approving GAAP exceptions and modifications using the existing GAAP model. Private companies will still have the choice of following the current US (more…)

FASB

 On Tuesday, January 25, 2011, at 1:00 p.m. EST, the FASB will host a one-hour webcast, 2011 Chairman’s Outlook on the FASB, with FASB Chairman Leslie F. Seidman who will discuss the Board’s priorities for 2011, including updates on top projects and progress on its joint agenda with the International Accounting Standards Board.  The webcast is free of charge but you must preregister at FASB’s website at www.fasb.org. (more…)

FASB

The FASB and the IASB originally published separate proposals on credit impairment of financial assets. Although both boards proposed moving to a more forward-looking approach to accounting for impairment they proposed different models. (more…)

Happy New Year!

Good-bye 2010, hello 2011.

Well, we experienced another of our typical holiday-shortened, year-ending weeks. There wasn’t a lot of news or activity going on, so what there was had an amplified effect.

Over the past weekend, we were treated to the news that China had raised their interest rates for a second time since October. The Chinese are trying to apply the brakes to their very robust economy.

In the past when we have witnessed the Chinese economy potentially slowing down, the commodity and equity markets have stumbled. This didn’t happen this time. Maybe because the idea of China tightening interest rates had been well telegraphed to the markets or maybe because, in general, the aggregate world economy is the strongest it’s been in 3 years. We will have to wait-and-see as we progress into 2011.

With many participants on holiday, trading in fixed-income was relatively light. There were no significant corporate bond deals this week. As the market returns next week, we might see a bit of activity on the corporate desks.

US Treasuries saw quite a bit of volatility this week. After weak 2-year and 5-year auctions, the markets sold off quite a bit. Part of the reason for the dramatic price/yield movement was that world-wide, many investors were simply not in the office. Back in ancient times (pre-financial crisis), before we saw such a significant increase in the number of auctions the Treasury held, the Treasury simply wouldn’t have held auctions during the holiday week.

By close of business on Tuesday, the 5-year Treasury had backed up 13bps and the 10-year security had backed up 16bps. Then all was made better by a well received 7-year auction on Wednesday.

For the week, yields were down along the entire maturity curve. The 2-year US Treasury yield was down 6bps to 59bps; the 5-year was down 5bps to 2.01%; the 10-year was down 10bps to 3.29%; and the 30-year was down 14bps to 4.33%. It is interesting to note that both the 10-year and the 2-year dropped 54bps from the beginning of 2010 to the end.

The big economic news of the week was the Weekly Unemployment Claims number. For the first time since July 2008, the weekly number dipped under 400k. The actual number was 388k. If the recent trend of lower unemployment claims continues, we may actually start to see the unemployment rate drop here in America. On Friday, we will get the last Employment report for 2010. The consensus is for an increase of 140k jobs and for the unemployment rate to drop -0.1% to 9.7%.

In money-market land, commercial paper (CP) continues its shrinking ways. For the week ending December 29^th, the CP market contracted by another -$4.7 billion to a total of $969 billion outstanding. This is the lowest level since 1997.

Best of luck to everyone in the New Year.

Public Company Accounting Oversight Board (PCAOB)

 This week I attended the PCAOB’s Standards Advisory Group (SAG) Meeting.  The topics discussed were (1) broker dealer audit considerations; (2) FASB/IASB projects and potential impact on auditors; (3) subsequent events; (4) auditors reporting framework; and (5) communications with audit committees.  (more…)

The Financial Accounting Standards Board (FASB) released on their website an Exposure Draft (ED) of a proposed Accounting Standards Update (ASU) intended to develop common requirements for measuring fair value and for disclosing information about fair value measurements in U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs). AFP will be reviewing this ED and making a decision on whether to issue a comment letter on behalf of our members in the upcoming weeks. Feel free to reach out to our staff should you have any issues with the propoasl.

The proposed ASU sets forth amendments that the Boards believe would improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRSs. The amendments would apply to all reporting entities that are required or permitted to measure or disclose the fair value of an asset, a liability, or an instrument classified in shareholders’ equity in the financial statements.

The IASB is publishing a measurement uncertainty analysis disclosure proposal, Measurement Uncertainty Analysis Disclosure for Fair Value Measurements, which is the same as a proposed disclosure requirement in the proposed Update

The comment period for the proposed ASU extends through September 7, 2010. The ED is available at www.fasb.org.

The Supreme Court held that the Sarbanes-Oxley Act’s provisions making PCAOB Board members removable by the Securities and Exchange Commission (SEC) only for good cause were inconsistent with the Constitution’s separation of powers. However, the operation of the PCAOB will not be interrupted. The courts rectified this inconsistency by changing the SEC’s power to language that now states that the SEC can remove a PCAOB Board member “at will” rather than “for good cause.” All other aspects of the PCAOB’s structure and design remains unchanged including registration, inspection, enforcement, and standard-setting activities.