April 15, 2010

FASB’s “Disclosure of Loss Contingencies” Project: Decisions Made and on the Fast Track

Yesterday, the FASB’s Board held a meeting and discussed a number of Staff recommendations regarding “Disclosure of Certain Loss Contingencies,” which would amend FASB Accounting Standard No. 5 “Accounting for Contingencies” as first proposed back June 2008. That proposal resulted in a large number of comments from professional organizations and others opposed to the proposal.

As I’ve blogged before, attorneys in particular have expressed significant concerns that the proposed mandated disclosures could result in admissions against the interests of companies as well as result in waivers of the attorney-client privilege and attorney work product protection (here is a blog about other views). Because of the comments received, the FASB decided in September 2008 to “re-deliberate” the issues raised by the proposal.

As indicated in these notes to yesterday’s meeting, the FASB now has reached many decisions on this proposal – and plans to issue a new Exposure Draft sometime in May with only a 30-day comment period. Based on the notes, it appears that the concerns expressed by lawyers in the comment letters have not been fully addressed – but we will have to see the Exposure Draft to determine if that truly is the case (eg. requirement to make disclosures about certain remote contingencies under certain circumstances).

Assuming the final standard is out around Labor Day as discussed at the meeting, the FASB expects that the new requirements will be effective for fiscal years ending after December 15, 2010, and interim and annual periods thereafter (except for nonpublic entities which have different dates). The new requirements would apply to fiscal year 2010 financials for calendar year companies.

iPhone Apps for Lawyers

In this podcast, Stuart Wood of Torys explains the details of his firm’s new iPhone application (you can download the app here), including:

– Why did Torys decide to build this iPhone app?
– What does the app do?
– Any surprises since launch?
– Any enhancements already planned?

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– More on Placement Agent Regulation
– Use Your Existing ESOP to Increase Bank Capital
– Feedback: Prohibition of Broker Voting on Say-on-Pay Votes
– DOJ and BAE Systems’ $400 Million FCPA Settlement
– Director Independence Determinations: Take All Facts & Circumstances into Account

– Broc Romanek