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Opinions and views from expert CFOZone members.

Tag >> finanacial reporting
Aug 26
2010

Why Herz's retirement may be bad for accounting

Posted by Ron F in Securities and Exchange CommissionGAAPfinanacial reportingFEIFASBcomplianceBankingAccounting

Ron F

The retirement of FASB's long-serving chairman is no surprise. Eight years is a long time at the helm, especially when the last two involved a serious banking crisis in which accounting was a central concern. But Bob Herz kept a stiff upper lip and gave little quarter, even when playing defense and compromising where he had to.

When I interviewed Herz's predecessor, Ed Jenkins, he had clearly been through the ringer on everything from derivatives accounting to Enron. And it showed.

Aug 25
2010

Banks' asset values should be marked down by 20 percent: report

Posted by Ron F in financial crisisfinanacial reportingFASBfair valuecompliancebalance sheetsamortizationAccounting

Ron F

Jack Ciesielski has a new report out that puts banks' arguments against fair value squarely in their place. And the analysis alone should make short shrift of the industry's complaints, though it no doubt will do nothing of the sort.

The accounting expert and investment adviser who runs The Analyst's Accounting Observer finds that banks account for 96 percent of all the asset markdowns to the balance sheets of the S&P 500 that he estimates would result from enactment of the Financial Accounting Standard Board's latest proposal.

Jul 09
2010

Banks perform somersault in anti-fair value campaign

Posted by Going Concern in GAAPfinanacial reportingFASBfair valuecomplianceBanksbank lendingbalance sheetsAccounting

Going Concern

Submitted by Caleb Newquist, republished from Going Concern, Accounting News for Accountants and CFOs.

Banks hate the FASB. This is understood. They're especially bent out of shape these days because the Board recently put out its latest fair value proposal that requires them to carry their loans at fair value. Bob Herz knew that this was going to cause hella-belly aching although he may not have predicted the virtual assault that was coming.

May 11
2010

Companies defying SEC's XBRL mandate

Posted by Going Concern in Securities and Exchange CommissionRegulationfinanacial reportingfilingscomplianceCFOsAccounting

Going Concern

Submitted by Caleb Newquist, republished from Going Concern, Accounting News for Accountants and CFOs.

 It has been well established in these pages and elsewhere that the SEC has had its share of problems. Take your pick: 1) missing the biggest financial fraud in the history of the world 2) hiring an army of porn-addicted accountants and lawyers to protect our markets 3) waffling on IFRS 4) did we mention missing huge frauds?

Apr 21
2010

Goldman's other disclosure problem

Posted by Ron F in Wells NoticeSecurities and Exchange CommissionRegulationJP Morgan ChaseGoldman SachsGeneral Electricfinancial crisisfinanacial reportingcredit-default swapCongresscomplianceBanksbanking reformBankingBank of AmericaauditingauditAIG

Ron F

This is seriously speculative stuff on my part. But I wonder if the other shoe that Carl Levin says is about to drop on Goldman has to do with its failure to disclose the fact that it received a Wells Notice from the SEC last July about the Abacus deal.

Yes, the bank claims it was immaterial, just as it claims was its lack of disclosure of hedgie John Paulson's role in helping to design the CDO to go south so he could profit by shorting the deal was immaterial.

Apr 01
2010

Tempest in a health-care teapot

Posted by Ron F in Taxlegislationhealth carefinanacial reportingFASBemployeesCongresscomplianceCareers/ManagementAccounting

Ron F

The brouhaha over the hits to earnings from the new health-care law that companies are announcing is much ado about very little.

First of all, the charge is an estimate of future costs and will have no immediate impact on cash flow. And the estimate is unusually large because the accounting rules require costs that would otherwise be reported in the future to be reported now, simply because they are the result of a change in tax treatment.

Mar 25
2010

Hey, SEC: What about Lehman?

Posted by Ron F in Securities and Exchange CommissionRegulationLehman Brothersfraudfinancial crisisfinanacial reportingcomplianceBanksbanking industrybalance sheetsAccounting

Ron F

The Securities and Exchange Commission has finally gotten around to naming a new chief accountant for its enforcement decision. But it makes me wonder about the commission's priorities.

Howard Scheck joins the SEC from Deloitte and earlier served as a branch chief in the enforcement division for 10 years.

Mar 11
2010

SEC brings rare Reg FD case

Posted by Stephen Taub in Wells NoticeSecurities and Exchange CommissionSEC filingssecRegulation FDinvestor relationsfinancial statementsfinanacial reportingdelayed filingcomplianceAccounting

Stephen Taub

The Securities and Exchange Commission filed a rare Reg FD case earlier this week.

The regulator brought this action against Presstek, a maker and distributor of digital imaging equipment and its former chief executive officer, Edward J. Marino. The SEC's complaint alleges that on September 28, 2006, while acting on behalf of Presstek, Marino selectively disclosed material non-public information regarding Presstek's financial performance during the third quarter of 2006 to a managing partner of a registered investment adviser. The SEC also alleges that within minutes of receiving the information from Marino, the partner decided to sell his firm's entire Presstek stake. According to the complaint, Presstek did not simultaneously disclose to the public the information provided by Marino to the partner.

Presstek agreed to pay a civil penalty of $400,000 as part of its deal to settle the Commission's charges, without admitting or denying the allegations. The Commission said it took into account certain remedial measures taken by Presstek, including revising its corporate communications policies and corporate governance principles, replacing its management team and appointing new independent board members, and creating a whistleblower's hotline.

Mar 04
2010

Are you a value integrator? (say yes)

Posted by Stephen Taub in risk assessmentRiskfinanacial reportingCFOsCareers/Managementcareer/management

Stephen Taub

Tough economic times have thrust Chief Financial Officers under a glaring spotlight. The finance departments have had to address urgent capital acquisition, cash flow and revenue challenges. They also were drawn into more frequent boardroom conversations about forecasts, profitability, risk management and strategic decisions related to supply chains, pricing and production.

As a result, CFOs have attained even more influence at the enterprise level. Unfortunately, Finance's effectiveness lags - particularly in broader areas of responsibility and impact, where company success often hinges on the CFO's advice.

These are the stark conclusions of a comprehensive new study of over 1,900 Chief Financial Officers (CFOs) and senior finance executives from 81 countries and 35 industries worldwide, conducted by IBM.

Feb 10
2010

Would Geithner back IFRS to heal the banks?

Posted by Going Concern in Timothy GeithnerstandardsIFRSGAAPfinanacial reportingcomplianceBanksAccounting

Going Concern

Submitted by Adrienne Gonzalez, republished from Going Concern, Accounting News for Accountants and CFOs.

Tim Geithner has inadvertently given his endorsement to standardized financial regulation around the globe, so is he also giving the adoption of IFRS in the US his approval?

Possibly, since he told ABC that "he wasn't worried that tighter financial regulation would put U.S. banks at an international disadvantage. ‘I'm very confident we can make sure that we are working very closely to raise global standards around the world so we have a level playing field,' Geithner said." His motivations are only slightly suspect. Why?

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