|  | | 2007 News and Press Releases | | |
HEADLINE NEWS:
M&A Rule Is the First to Go Global, FASB issues FAS 141(R) and FAS 160, and hails the standards as the first significant convergence milestones. Now companies have to deal with the fallout.
Marie Leone
cfo.com. December 6, 2007
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EXCERPT: The Financial Accounting Standards Board took one giant leap for global accounting convergence on Tuesday when it issued a revision to its rule on business combinations and a new rule on how to account for minority interests. The new standards "represent completion of FASB's first major joint project with the International Accounting Standards Board," noted FASB member G. Michael Crooch. But while the respective accounting boards move forward to harmonize international standards with U.S. generally accepted accounting principles, corporate accountants will have their hands full dealing with the fallout. Indeed, the new rules — FAS 141(R), Business Combinations, and FAS 160, Noncontrolling Interests in Consolidated Financial Statements — represent a major departure from the historical cost accounting that many companies use now. "The most difficult part of implementing FAS 141(R) is coming to grips with fair value principles that were never required before," opined Jay Hanson, national director of accounting for audit firm McGladrey & Pullen. Financial statement users and preparers talked about FAS 141 and fair value with "a wink and a nudge," says accounting expert Jack Ciesielski, editor and publisher of the Analyst's Accounting Observer newsletter. "But under FAS 141(R), you are required to recognize [assets and liabilities] at fair value." The FASB standards will take effect for fiscal years beginning after December 15, 2008. IASB is due to release its versions of the new rules early next year, which are said to be very similar in principle but diverge on some details, according to Jay Hanson, national director of accounting for audit firm McGladrey & Pullen. Those disparities include provisions that deal with income taxes, operating leases, and employee benefits. |
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