Accounting in 2010: Major Advances in Rules Loom by ProQuest


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									 2010 PREVIEW

Accounting in 2010: Major Advances in Rules Loom
By Tammy Whitehouse                               leaving IASB’s next steps uncertain. “This             Impairments, Valuation

A     s companies close the books on the ex-
      traordinary events of 2009, it’s already
                                                  is a top standard-setting priority for FASB
                                                  and IASB, and there are going to be a lot of
                                                  changes,” he says.
                                                                                                         T   he Securities and Exchange Commis-
                                                                                                             sion is showing keen interest in how
                                                                                                         companies report impairments and how
time to think ahead to the issues that com-           While marketable securities have recov-            they reach their fair-value measurements,
mand attention in 2010. The year that ended       ered significantly from their lows in early            says Gregory Bailes, a partner with Texas
should be seen as something of a “call to         2009, there’s still plenty of cause to worry           regional auditing firm Weaver. Where im-
action,” says Jeff Thomson, president and         about a “double dip,” warns Robert Swier-              pairments or fair-value measurements don’t
CEO of the Institute of Management Ac-            inga, accounting professor at Cornell Uni-             seem to coincide with market capitaliza-
countants.                                        versity and a former FASB member. “If we               tions, the SEC is asking for details, he says.
    Companies are thinking more about en-         see that, this whole issue of mark-to-market              At the same time, FASB and IASB have
terprise risk management, he says, not just       is going to go around again.”                          stepped up work on new accounting ap-
to assure financial reporting compliance but
as a way to gain a strategic advantage. In the            FASB, IASB PLANS
coming year, companies need to think more
broadly about their risks and find the hu-          The following excerpt is from the Financial Accounting Standards Board’s Website regarding FASB’s
man talent necessary to identify and miti-          Financial Instruments Project:
gate them, he says. “That’s a major concern
of every CFO we talk to.”                           FASB Project Plan (as of Nov. 3)
    As for the specific financial reporting
issues that will take center stage in 2010,         FASB has posted to its Website a detailed description of its tentative approach to classification and
financial reporting experts say companies           measurement of financial instruments as a way of informing interested constituents and obtaining
can expect a lot of movement and focus on           early input from them. FASB will continuously update that description as the Board makes additional
financial instruments, impairments, off-            decisions.
balance-sheet accounting, taxes, and the
continued migration toward International            As another way of obtaining early input on tentative decisions reached and issues relevant to the
Financial Reporting Standards.                      Accounting for Financial Instruments project, the Board and staff have held informal discussions in
                                                    addition to public roundtables with constituents. The Board and staff obtained input from various
Financial Instruments                               investors, preparers, auditors, regulators, and valuation specialists ...

T    he fate of troubled financial instru-
     ments will remain a key accounting
issue in 2010, especially as standard-setters
                                                    FASB will consider input received on its tentative model as well as feedback received on IASB’s Expo-
                                                    sure Draft and IASB redeliberations as it develops its proposed Accounting Standards Update.
work on a new package of rules that will
call for more market-based valuation of             IASB Project Plan
such instruments.
    The Financial Accounting Standards              IASB decided to complete its deliberations on the project in three phases:
Board and the International Account-
ing Standards Board are trying to develop           Phase 1: Classification and measurement—IASB has completed this phase with the issuance of IFRS
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