Fair value

A Push for Audit Quality Could Send Costs Higher

May 15, 2012

After several large audit firms scored poor marks on their most recent round of audit inspections, many are responding by stepping up their game. They are investing more in training and staff, and planning on giving problem areas more scrutiny—all of which could drive costs higher. "We are doing a number of things differently," says Robert Moritz, chairman of PwC's U.S. operations. More inside.
 

Companies Laboring to Make Sense of New Fair-Value Rules

March 20, 2012

With the first-quarter close approaching, companies and their auditors are still trying to determine how they will comply with a new rule that adjusts the method for measuring fair value and requires new disclosures. "Companies are still ... trying to figure out what this really means and what it is going to look like," says Manish Choudhary, a principal at Deloitte. Details inside.
 

For Fair-Value Measurements, Third-Party Pricing Alone Won't Do

January 17, 2012

Regulators are taking issue with fair-value measurements that rely entirely on third-party services, calling for companies to support the judgments with their own analysis. Those that don't may have to answer to the SEC. "We might question whether or not the registrant uses a pricing service," warns Mark Shannon, associate chief accountant at the SEC. "If the answer is yes, how do you evaluate the appropriateness of the models?"
 

SEC Warns Issuers, Auditors on Pricing Service Pitfalls

December 06, 2011

The Securities and Exchange Commission recently warned auditors to take ownership for fair-value measurements they outsource to pricing services instead of taking their work at face value. During an accounting conference SEC Professional Accounting Fellow Jason Plourde said it's not enough to trust third-party valuations, particularly for hard-to-value illiquid securities.
 

Buttoning Up the Year-End Close

December 06, 2011

It's that time again. Companies should be combing through financials to assure their estimates are sound and that they are paying close attention to the issues that regulators are focused on as they prepare to close the books on 2011. And a cloudy economy could mean rethinking some assumptions. "There's more uncertainty in the markets, so more could go wrong," says Kevin Pianko, a partner with accounting firm WeiserMazars.
 

AICPA Offers Advice on Valuation, Accounting for IPR&D

November 29, 2011

A body of the American Institute of Certified Public Accountants is developing some professional guidance on how to value and account for any in-process research and development that is acquired in a business combination.
 

Watch Accounting on Capital Raising Ideas, Firm Warns

November 04, 2011

The tougher it gets to raise capital, the more creative the instruments become. That can create accounting hazards that companies need to watch carefully, says audit firm McGladrey & Pullen.
 

PCAOB Prepares Guidance on Auditing Fair Value

November 03, 2011

The chief auditor at the Public Company Accounting Oversight Board is preparing new guidance that will give auditors direction on how to audit fair-value measurements and disclosures. A task force has studied a variety of issues related to financial instrument valuation, including the processes and controls over information gathered from pricing sources.
 

Audit, Accounting Regulators Promise More Action

June 01, 2011

Tom Linsmeier of FASB, above, and Jay Hanson of the PCAOB both told Compliance Week 2011 attendees last week that new standards are on the way that (hopefully) will provide more clarity around corporate transactions to investors—but they also warned that good standards alone won't necessarily prevent future financial crises. More highlights from their keynote speeches inside.
 

FASB, IASB Finalize New Fair-Value Rules

May 13, 2011

Fair value under U.S. accounting rules finally means the same thing as it does under international accounting rules. Last week the Financial Accounting Standards Board and the International Accounting Standards Board published their new converged standards, with a common definition of fair value and clarifications on how to measure it.
 

The Implications of Predicting Loan Loss

March 29, 2011

The Financial Accounting Standards Board's recent proposal on impaired loans has the stated objective of recognizing losses before they occur. Columnist Scott Taub argues that the proposal runs counter to traditional accounting principles and would result in a lack of discipline. Inside, he offers an alternative method.
 

FASB Retreats on Fair Value for Financial Instruments

February 15, 2011

The Financial Accounting Standards Board backed away from plans to require financial companies to use fair value accounting for all financial instruments. Instead, it has proposed the creation of three categories of financial assets and liabilities, each with different valuation criteria and treatment in financial statements. Details inside.
 

FASB Drops Fair Value for Loans Held for Cash

January 26, 2011

The Financial Accounting Standards Board has tentatively reversed course and decided it will not require banks to book loans held to maturity at fair value. Instead, FASB will create three categories of financial assets, each to be measured and recorded in financial statements differently.
 

GAAP, IFRS Now Differ on How to Treat Debt

November 03, 2010

With international rules now modified around how a company accounts for its own debt, analysts are calling on the Financial Accounting Standards Board to follow suit.The International Accounting Standards Board recently finalized a change in International Financial Reporting Standards that tells companies to measure most liabilities at amortized cost, or...
 

Investor Feedback Summary May Foretell FASB Retreat

October 04, 2010

The Financial Accounting Standards Board may be sending up a smoke signal with an unusual missive describing how investors aren’t entirely in love with the board’s proposed new rules on financial instruments.The board published a nine-page description of its interaction with investors regarding FASB’s controversial proposal to call for more...
 

FASB Approaches Adjustments to Fair-Value Measurement

July 01, 2010

In another strike toward a single global accounting rule book, the Financial Accounting Standards Board has published a proposed Accounting Standards Update to tweak requirements in U.S. Generally Accepted Accounting Principles for how to measure fair value and disclose information about those measurements.The International Accounting Standards Board meanwhile published a revised...
 

PwC Queries Investment Mgrs. on Financial Instruments

June 17, 2010

PricewaterhouseCoopers decided to do some research to get a sense of what investors and analysts are really looking for in the way of accounting standards to make it easier for them to grasp what’s in corporate financial statements.They focused on the question that is front-and-center in accounting standard setting these...
 

FASB Proposal Draws Heated Early Feedback

June 16, 2010

Who knew accounting could get so emotional? A proposal from the Financial Accounting Standards Board is already drawing a sizable stack of correspondence, and it certainly couldn’t be described as fan mail.The FASB proposed in late May a pair of new Accounting Standards Updates that would require a new method...
 

FASB Proposes Fair Value for Held-to-Maturity Loans

May 27, 2010

In the first of an expected wave of major new accounting proposals, the Financial Accounting Standards Board has published an exposure draft on financial instruments and another on comprehensive income that are certain to ruffle feathers in the banking sector.Although they are key components of FASB’s agreement with the International...
 

Firm Advises Care in Fair Value Measurement in M&A

March 26, 2010

As companies are following new rules for booking a business combination, there’s good reason to put a little extra elbow grease into the initial valuations. If there are subsequent adjustments, they have to be made by revising and reissuing previously issued financial statements, warns PricewaterhouseCoopers in a recent alert.It’s not...
 

FASB Requires New Fair Value Disclosures

January 22, 2010

Where companies are required to measure assets and liabilities at fair value, they’ll have some new disclosures to provide regarding changes in how they measure those values.The Financial Accounting Standards Board has finalized Accounting Standards Update No. 2010-06 to amend Accounting Standards Codification Topic 820 in a way that elicits...
 

SEC: Negative Equity Doesn't Mean No Impairment

December 17, 2009

When companies are testing for possible impairment of goodwill in a seemingly troubled reporting entity, the staff of the Securities and Exchange Commission has signaled it won’t be fooled by attempts to spin negative equity into a rationalization that an impairment doesn’t exist.Evan Sussholz, professional accounting fellow for the SEC, said...
 

FASB Chair Calls for New Approach for Bank Regulators

December 08, 2009

A frustrated accounting standard setter told an audience full of accountants that someone needs to pry the gorilla of banking regulators off his back.Robert Herz, chairman of the Financial Accounting Standards Board, made perhaps his most detailed and impassioned plea yet that the regulation of financial institutions needs to be...
 

Angry Reaction to Rejection of IFRS 9 in Europe

November 23, 2009

The European Commission’s refusal to adopt a new International Financial Reporting Standard on financial instruments has provoked an angry reaction from parts of the trading bloc’s accounting profession. The International Accounting Standards Board released “IFRS 9 Financial Instruments” on November 13 after calls from the G20 nations to simplify accounting...
 

Standard Setters Still Working on Financial Instruments

November 19, 2009

by Melissa Klein AguilarU.S. and international accounting standard setters are still hashing out their differences with hopes of reaching a converged standard on accounting for financial instruments, according to officials speaking at a financial reporting conference this week.While their current approaches differ markedly, with the United States supporting more use...
 

Boards Try to Sync Approaches on Financial Instruments

October 30, 2009

U.S. and international accounting rule makers spent three days this week making progress on a number of outstanding projects on the road to a unified accounting rule book, most notably trying to iron out their different ideas about how to improve accounting for financial instruments.The economic meltdown exposed big problems...
 

FASB Gets Practical on a Fair Value Problem

October 06, 2009

The Financial Accounting Standards Board has finalized new guidance that provides a practical solution to measuring the fair value of certain alternative investments.FASB’s Accounting Standards Update 2009-12 amends ASC 820-10 Fair Value Measurements and Disclosures to clear up uncertainty about how to measure fair value of investments in certain entities...
 

ABA Pleads for Intervention on Fair-Value Plans

September 16, 2009

The American Bankers Association is appealing to the U.S. Treasury and the Federal Reserve to stoke the fire over accounting issues at the upcoming G-20 meeting in Pittsburgh Sept. 24-25, especially regarding proposals to require more use of fair value on bank balance sheets.Edward Yingling, ABA president and CEO, sent...
 

FASB Proposes More Fair Value Disclosure

September 04, 2009

Now that users of financial statements have had a chance to study fair value measurements under the still relatively new three-level hierarchy, they’re looking for more disclosures.The Financial Accounting Standards Board is proposing an Accounting Standards Update to the disclosures around fair value measurements to give greater insight into the...
 

FASB Plans to Require More Fair Value by 2011

August 14, 2009

Another fair-value showdown is taking shape, this time over whether fair value should reach even further than it currently does into balance sheets. But don’t expect the shootout to begin anytime soon.The Financial Accounting Standards Board met this week to pick away at its comprehensive plan to change the way...
 

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