February 28, 2007

Posted: March-April Issue of The Corporate Counsel

We have posted the March-April 2007 issue of The Corporate Counsel since it contains practical guidance that pertains to proxy season issues that you may be grappling with. We are making an exception to our subscription license to allow you to forward this issue of The Corporate Counsel to whomever you think it will benefit (and tell them to try a no-risk trial to The Corporate Counsel print newsletter).

SFAS 159: More Fair Value Accounting

A few weeks ago, the FASB issued SFAS 159, which is a new standard that provides companies with the opportunity to report selected financial assets and liabilities at fair value. In other words, SFAS 159 allows companies to measure specified financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting period.

The election, called the “fair value option,” will enable some companies to reduce the volatility in reported earnings caused by measuring related assets and liabilities differently, and it is simpler than using the complex hedge-accounting requirements in Statement 133 to achieve similar results.

Another Internal Controls Delay for Smaller Companies?

According to this article, Senators John Kerry (D-Mass.) and Olympia Snowe (R-Maine) have sent a letter to the SEC and PCAOB seeking another one-year delay in requiring small U.S. public companies to evaluate their internal controls of financial reporting.

Meanwhile, COSO announced that Grant Thornton has been commissioned to develop guidance designed to help organizations monitor the quality of their internal control systems.