Bernanke takes over at the Fed

Washington -- Ben Bernanke was sworn in as the 14th chairman of the Federal Reserve in early February, with the first item on his agenda likely to be a decision on the direction of interest rates. The Fed increased rates for a 14th consecutive time in the same week, and is expected to do so one last time at Bernanke's first meeting as chief, on March 28. Economists expect rates to remain unchanged for several months beyond that.

Bernanke, 51, is expected to be a strong anti-inflationist. He had been serving as chairman of the Council of Economic Advisers, and was a member of the Board of Governors of the Federal Reserve for three years. Prior to that position, he was chair of the Economics Department at Princeton University from 1996 to 2002.

GASB wants pollution recognition

Norwalk, Conn. -- The Governmental Accounting Standards Board issued an exposure draft that would require governments to account for all the obligations and costs related to pollution remediation. The board said that certain costs and long-term obligations are not specifically addressed by current governmental accounting standards. The draft builds on public comments received last year.

The draft sets five key circumstances under which the state or federal government would be required to report liabilities for pollution remediation, and would also require governments to disclose information about their pollution clean-up efforts in the notes to financial statements. The requirements of this proposed statement would be effective for financial statements for periods beginning after June 15, 2007.

A copy of the proposal may be downloaded from GASB's Web site at The comment deadline for the draft is May 1, 2006.

BearingPoint lays out bad news

McLean, Va. -- Consulting firm BearingPoint Inc., the spinoff of KPMG's former consulting business, reported a $546.2 million loss for 2004 and said that it still faces liability issues under the Foreign Corrupt Practices Act.

In a nearly 2,000-page filing with the Securities and Exchange Commission, BearingPoint aired all of its dirty laundry, providing its long-delayed 2004 results and attempting to show it is moving on from its accounting troubles.

The critical filing includes details of government investigations, problems with management controls and an explanation for the more than $20 million that KPMG says it is still owed. Admitting that it may still face some liability for alleged bribes in China, BearingPoint did note that the company's audit committee uncovered the payments and gifts to current and former officials at state-owned companies in China, and the responsible subcontractor was fired last fall.

BearingPoint first disclosed its accounting issues in November 2004, when the company said that some of its invoices had been counted twice. Longtime chief executive Randolph Blazer resigned that month, and former Oracle Corp. chief financial officer Harry You took over the company in March 2005.

EU offers convergence reprieve

Brussels -- The head of the European Commission's financial markets division said that public companies from the United States and Japan will be given another year to bring their accounting standards closer to new European Union standards.

Reports have said that it would cost the hundreds of U.S. and Japanese companies whose stocks and bonds are traded in Europe at least $1 million each to convert their books to International Financial Reporting Standards.

Several Japanese companies have already left the European capital markets, according to Japan's Financial Services Agency. In January 2004, there were 76 Japanese companies listed in EU markets, but only 32 in December.

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