TheCorporateCounsel.net

November 12, 2007

FIN 48 – Effective Date for Nonpublic Companies to be Postponed

The FASB has decided to postpone the effective date of Interpretation 48, Accounting for Uncertainty in Income Taxes (June 2006), for those nonpublic entities that have not yet applied the interpretation. Under the postponement, FIN 48 would be applied by those nonpublic entities for periods beginning after December 15, 2007. The FASB’s proposal to delay effectiveness of the Interpretation is now out for a 30-day comment period.

Interpretation 48 will continue to be effective for public companies for fiscal years beginning after December 15, 2006. For more on FIN 48, check out our “Tax Uncertainties” Practice Area.

XBR-what?

In a recent national survey of chief financial officers and senior comptrollers conducted by Grant Thornton, 47 percent of the CFOs polled said that they were not aware of XBRL. About half of the responding CFOs believed that XBRL would not become mandatory for SEC filings until 2010 and beyond. Apparently these CFOs are not big followers of Captain XBRL.

The CFOs may be in for a surprise, as the interactive data momentum clearly continues to build at the SEC. On Friday, the SEC announced that Chairman Cox had been holding bilateral talks at the International Organization of Securities Commissions (IOSCO) conference on the timetable for implementation of XBRL for regulatory filings. Cox noted that “[w]ithout question, 2008 will be a watershed year for interactive data.”

The Grant Thornton survey also found that a surprisingly high 43 percent of the CFOs polled said that they did not want to be CEO of a company in the future. In the survey, 61 percent of the CFOs felt that their CEO was paid at a level that is appropriate, while approximately 16 percent believed that their CEO was underpaid.

Good News for Portal

A few months ago, I blogged about the “summer of alternative trading platforms for unregistered securities” (kind of like the “Summer of Love” for traders), noting that a number of investment banks were developing platforms for trading in Rule 144A securities. As noted in this article from today’s Wall Street Journal, those efforts have now been abandoned in favor of revamping Nasdaq’s Portal system. Efforts have been underway for some time to make Portal a useful trading system, and now it looks like the threat of competition from Wall Street will not undermine those efforts.

Corporate Governance Lawsuits

Lawsuits remain a means for compelling corporate governance reform, especially in situations where other methods for accomplishing reform have not worked. In this podcast, Stuart Grant of the law firm Grant & Eisenhofer describes the latest developments in corporate governance reform lawsuits, including:

– What are examples of companies that have been targeted for governance reform through lawsuits in the past year or two?
– Typically, how does the filing of a governance lawsuit impact whether the company’s management will consider governance changes?
– What do you recommend that management groups faced with these lawsuits consider when entering a dialogue with those that file the lawsuit?

– Dave Lynn