TheCorporateCounsel.net

Recently, I posed a question to TheCorporateCounsel.net advisory board: In your practice, do you find that your clients are comfortable with an opinion of only inside counsel for debt and equity financings? Or do they always feel the need to seek outside counsel opinions also?

The following interview is comprised of reasoned responses to these questions from eight board members. Thanks to the advisory board for all their help over the years!

SEC Delivers Off-Balance Sheet Report to Congress

Yesterday, the SEC issued one of its last deliverables under Sarbanes-Oxley, this 119-page Report on off-balance sheet arrangements. As required by Section 401(c) of SOX, the Report address two primary questions: the extent of off-balance sheet arrangements, including the use of special purpose entities, and whether current financial statements transparently reflect the economics of off-balance sheet arrangements.

In the Report, the SEC took an expansive approach to the scope and meaning of the term “off-balance sheet.” The SEC believes that significant progress has been made in the past few years – but that more can still be done for financial reporting of several types of off-balance sheet arrangements (and just like in the SEC Chief Accountant speech that I blogged about a few weeks ago, reduced complexity and more transparency is the mantra of the Report).

Here are several initiatives identified in the Report that would improve transparency:

– Discourage transactions and transaction structures primarily motivated by accounting and reporting concerns, rather than economics

– Expand the use of objectives-oriented standards, which would have the desirable effect of reducing complexity in accounting standards

– Improve the consistency and relevance of disclosures that supplement the basic financial statements

– Improve communication focus in financial reporting

A big part of this would be the FASB undertaking rulemaking for lease and pension accounting, because much of the liabilities from these hot button topics only make it into the footnotes of financial statements. In the Report, the SEC reviewed 200 filings and found 77% of them had operating leases, totaling $1.25 trillion, that resulted in footnote disclosure – and these same filings revealed another $535 billion in defined benefit plan liabilities that escaped the balance sheet.

SEC Database of Non-US Reporting Companies

On Tuesday, Corp Fin posted this useful list of companies registered and reporting in the US. The list can be spliced and diced four ways: alphabetical by name; by home country; by market; and by summary info. The SEC always compiles and posts this list, but this is the first time that archival data is available too – four years worth.

Save Elmo!

Congress has a bill gaining momentum that would eliminate funding for NPR and PBS, starting with “Sesame Street,” “Reading Rainbow,” and other commercial-free children’s shows. If approved, this would be the most severe cut in the history of public broadcasting. Please sign this petition to Congress to save NPR and PBS.