Norwalk, Conn. (Nov. 4, 2003) — The Financial Accounting Standards Board has unveiled several modifications to FIN 46, a rule that would mandate companies to consolidate off-balance sheet partnerships.

FIN 46 requires companies receiving benefits from off-balance sheet entities to include the assets and liabilities in financial statements.

According to FASB modifications available on the organization’s Web site at, companies would be exempt from FIN 46 if  they’re unable to obtain information necessary in their determination of whether any entity or off-balance sheet partnership created prior to Feb. 1, 2003 should be consolidated. The rule is in effect for those created after that date.

The proposed clarifications and modifications would apply in financial statements for the first period ending after Dec. 15, 2003.  The comment period ends on Dec. 1, 2003.

Off-balance sheet partnerships received national attention in the aftermath of the Enron scandal, where the bankrupt energy concern artificially inflated its profits by using the partnerships to mask debt.

— WebCPA staff

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