The Financial accoun Ting STand
ards Board and the international accounting Standards Board reached some tentative
decisions on how to revise fair value accounting standards.
The two boards committed late last year to
meet on a monthly basis — both in person
and via video conference — to resolve some of
the thornier issues holding up convergence of
international Financial Reporting Standards
and u.S. gaaP, with the goal of completing
most of their work by June 2011.
Fair value and mark-to-market accounting have been among the most controversial
issues the two boards have dealt with, especially when both standard-setters came under political pressure last year to revise their
standards in response to the financial crisis.
last month, the two boards tentatively agreed
Boards refine fair value standards
norwalk, Conn.
to define fair value as an exit price, along with
other issues.
The boards tentatively decided that a fair
value measurement of a nonfinancial asset
considers its highest and best use by market
participants. They also decided not to require
entities to separate the fair value of an asset
group into two components when an entity
uses an asset in a way that differs from its
highest and best use. in addition, they plan to
require entities to disclose information about
when they use a nonfinancial asset in a way
that differs from its highest and best use (and
that asset is recognized at fair value based on
its highest and best use).
The accounting bodies also tentatively
decided that the objective of a fair value
measurement of an individual asset is to
determine the price for a sale of that asset
alone, not for a sale of that asset as part of a
group of assets or business. however, when
the highest and best use of an asset is to be
used as part of a group of assets, the fair val-
ue measurement of that asset presumes that
the sale is to a market participant that has, or
can obtain, the “complementary assets” and
“complementary liabilities.” complementary
liabilities include working capital but do not
include financing liabilities.
competency and ethical standards, according to a new report
by the iRS oversight Board.
in the report, 78 percent of
AICPA PARRIES ATTACK ON
ACCOUNTING STANDARDS
WASHINGTON, D.C. — The American
Institute of CPAs has dispatched a letter
to the leaders of the Senate Banking
Committee asking them not to allow a
systemic risk regulator to alter accounting standards in the financial regulatory
reform legislation they are drafting.
“We want to express our concern
with any construct that would allow
bank regulatory authorities or a systemic
risk oversight authority to intervene or
have undue influence over the setting
of accounting standards for purposes of
public financial reporting,” wrote AICPA
president and CEO Barry Melancon.
The letter came as a response to an
earlier letter from a group of banking,
real estate, construction, mortgage and
insurance industry trade associations,
pressing for a provision that would have
allowed a Financial Stability Council to
suspend or modify accounting standards
that threaten the stability of the U.S.
financial system. The final bill now only
allows the council to submit comments
to accounting standard-setters.
THEY WANT IT ALL
Percent of taxpayers who think it is very important
that tax preparers meet competence standards
2009
73
2008
73
2007
62
Percent of taxpayers who think it is very important
that tax preparers meet ethical behavior standards
0 10 20 30 40 50 60 70 80
2009
78
2008
76
2007
63
0 10 20 30
Source: IRS Oversight Board
40
50 60
70
80
those surveyed indicate that it is
“very important” that tax preparers meet standards of “ethical behavior,” while 73 percent believe
it is very important that preparers
meet competency standards. The
numbers are in line with findings
from the board’s 2008 survey.
While the survey did not explicitly ask about the iRS’s current plans to require preparers to
register, take cPe courses and be
tested, 55 percent of taxpayers indicated that it would have a “great
deal of influence” on them if the
preparer is subject to regulations
or licensing by a government entity, either federal or state. That’s
compared to 39 percent who said
that there would be a great deal of
influence on them in choosing a
preparer if they were subject to
regulation or licensing by an industry association.
The survey showed a reduc-
tion from 2008 levels in the im-
portance and likelihood to use
tax assistance services from the
iRS, however. There was an eight-
point drop from 78 to 70 percent
among those who felt a toll-free
telephone number to answer
questions is “very important.”
The board is concerned about
recent reductions in iRS toll-
free phone service levels as the
demand for customer service
continues to grow from taxpay-
ers seeking answers about new
and extended tax credits.
IASC OVERHAULS CONSTITUTION
LONDON — The trustees of the International Accounting Standards Committee
Foundation, which oversees the International Accounting Standards Board,
have announced a series of changes to
their constitution, including an emphasis
on adoption of International Financial Reporting Standards over convergence.
Other changes include creating
vice chair positions for both the IASC
Foundation trustees and the IASB. The
move is intended to ease the burden
on the chairman and offer the option of
wider geographical distribution in the
leadership.
There will also be a public consultation on the IASB’s technical agenda every
three years, a commitment to a prin-ciples-based approach, and the identification of investors as a target audience
for financial information. In addition, the
IASC Foundation will be renamed the
IFRS Foundation, while the interpretations committee and advisory council
will be known as the IFRS Interpretations
Committee and the IFRS Advisory Council, respectively. However, it was decided
to retain the name of the IASB, instead of
renaming it the IFRS Board.
