Accounting standards

While U.S. and international accounting standards seem set on an inevitable convergence path, some are worried that the U.S. approach may end up becoming a bad influence on International Financial Reporting Standards.

The Financial Accounting Standards Board and the China Accounting Standards Committee have signed a memorandum of understanding agreeing to strengthen communication and cooperation between the U.S. and Chinese standards setters.

Broadcom agreed to pay $12 million to settle charges with the Securities and Exchange Commission over the chip maker's stock-option backdating that led to a restatement of more than $2 billion.

The Financial Accounting Standards Board and the International Accounting Standards Board agreed on a set of proposals to accelerate the 2006 memorandum of understanding on convergence between International Financial Reporting Standards and U.S. generally accepted accounting principles.

An Ohio jury ruled that Fifth Third Bancorp is not entitled to a $5.6 million tax refund for its 1997 tax year after the bank sought to take tax deductions related to complex leasing transactions involving passenger rail cars.

The European Commission said it would propose a law allowing U.S. and Japanese companies with listings on European exchanges to file financial statements in accordance with U.S. generally accepted accounting principles without first reconciling them with International Financial Reporting Standards.

The Internal Revenue Service has withdrawn proposed regulations that would have treated mortgage loans as capital assets and restricted the deductibility of mortgage defaults.

The Office of Federal Housing Enterprise Oversight has issued examination guidance regarding Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.”

James K. Smith, chief financial officer of Phonom Corp., and James Stevenson, CFO of ABS Capital Partners, have joined the Private Company Financial Reporting Committee.

KPMG has established an IFRS Institute to address the needs of companies, investors and academics affected by the transition to International Financial Reporting Standards.

The Private Company Financial Reporting Committee, a joint effort of the Financial Accounting Standards Board and the American Institute of CPAs, is set to meet later this month.

“Keeping Retirement Plans Qualified” in the March issue of Practical Accountant was written just prior to the U.S. Supreme Court decision, LaRue v. DeWolff, in which the Court held that a participant in a defined contribution pension plan may sue a fiduciary under ERISA Section 502(a)(2) when claiming that a fiduciary breach caused a loss of plan assets allocated to the participant’s 401(k) plan account. It was pointed out in the article that employee benefit plan audits have now become not only financial statements, but also compliance audits. The Supreme Court opinion is further indication of that.

Greek accounting firm Savvides & Partners/PKF Cyprus agreed to pay $261,565 to settle charges with the U.S. Securities and Exchange Commission that it engaged in fraud in connection with its 1999 and 2000 audits of bankrupt software developer AremisSoft.

The Internal Revenue Service has put out a call for a priority list of items it should address with its upcoming guidance.

The Securities and Exchange Commission will decide next Monday on its plans for any requirements and timeline for public companies to file their financial statements in an interactive data format.

CPAs who conduct valuations in the normal course of their practices are now required to comply with detailed standards.

CPAs who conduct valuations in the normal course of their practices are now required to comply with detailed standards.

Two former Arthur Andersen auditors have settled charges with the Securities and Exchange Commission accusing them of failing to exercise due professional care and skepticism in their 2001 audits of bankrupt telecommunications giant WorldCom.

Lately, it seems like the concepts of fair value measurement and mark-to-market accounting have been taking a lot of blame in the hand-wringing over what is causing the fallout in the credit and mortgage securities markets.

It is my belief that despite the various newsletters, publications and sections on the AICPA Website, what the AICPA is doing that directly impacts its members can be publicized better by the AICPA.