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CURRENT DEVELOPMENTS IN THE DIVISION OF CORPORATION FINANCE 8 th Annual Financial Reporting Conference Baruch College

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CURRENT DEVELOPMENTS IN THE DIVISION OF CORPORATION FINANCE 8 th Annual Financial Reporting Conference Baruch College. Wayne Carnall Chief Accountant Division of Corporation Finance April 30, 2009. Disclaimer.

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CURRENT DEVELOPMENTS IN THE DIVISION OF CORPORATION FINANCE8th AnnualFinancial Reporting ConferenceBaruch College

Wayne Carnall

Chief Accountant

Division of Corporation Finance

April 30, 2009

disclaimer
Disclaimer
  • The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. Therefore, the views expressed today are our own, and do not necessarily reflect the views of the Commission or the other members of the staff of the Commission.
agenda
Agenda
  • Rules
  • Communications
  • Reviews/Current Environment
  • Miscellaneous Items
  • Goals for the Future
rules
Rules
  • IFRS in the US - Proposal
    • Two Parts – roadmap and limited early use
    • Comment period – recently ended
  • Oil and Gas
    • Disclosure
    • Accounting
  • FIRE
  • XBRL
  • Technical Amendments
slide5
COMMUNICATIONS
  • INTERNAL/ EXTERNAL
  • &
  • TRANSPARENCY
communications
Communications
  • Outreach Program
    • Accounting Firms
    • Investor Groups
    • Other Organizations
  • Letters – waivers, interpretations, etc. [email protected]
  • E-mail vs. phone calls
    • Efficiency
    • Future Guidance
sfas 157 dear cfo letters
SFAS 157 – Dear CFO Letters
  • Letters sent to approximately 30 financial institutions, plus posted on our website given the much broader applicability of the guidance

http://www.sec.gov/divisions/corpfin/guidance/fairvalueltr0308.htm

http://www.sec.gov/divisions/corpfin/guidance/fairvalueltr0908.htm

sec staff review of common financial reporting issues facing smaller issuers

SEC Staff Review of Common Financial Reporting Issues Facing Smaller Issuers

Wayne Carnall, Chief Accountant

Steven Jacobs, Associate Chief Accountant

Hugh West, Accounting Branch Chief

Mark Kronforst, Accounting Branch Chief

Kevin Woody, Accounting Branch Chief

Angela Crane, Accounting Branch Chief

Kevin L. Vaughn, Accounting Branch Chief

Joel Parker, Accounting Branch Chief

Brian Bhandari, Accounting Branch Chief

Division of Corporation Finance

November 2008

pcaob forum smaller issuers topics 2008
PCAOB Forum - Smaller IssuersTopics - 2008
  • Overview of the Agency and Division
  • Recent Developments
  • The Comment Letter Process
  • Financial Reporting Issues Frequently Raised in Comment Letters
  • Management Report on Internal Control over Financial Reporting
  • Resources
pcaob forum smaller issuers new topics 2009
PCAOB Forum - Smaller IssuersNew Topics - 2009
  • Impairments and Related Disclosure (including SOP 94-6)
  • · Back-door Registrations and the Reporting Requirements
  • · Related Party Transaction
  • · Restricted Net Assets
  • · SRC Transitions and Determinations
  • · ICFR
history of the training manual
History of the “Training Manual”
  • Developed around 1990
  • Prepared by the staff of the Division of Corporation Finance for the staff of the Division of Corporation Finance
  • Last version was 2000
  • Goals for updating
    • End of Summer 2008 – 11:44am September 22
    • October 31, 2008
    • 12:08pm December 9, 2008
  • Contest for new name
financial reporting manual
Financial Reporting Manual
  • Location

http://sec.gov/divisions/corpfin/cffinancialreportingmanual.pdf

  • Updating
    • March 31, 2009
    • Next update
financial reporting manual1
Financial Reporting Manual
  • Topic 1 – Registrant’s Financial Statements
  • Topic 2 – Other Financial Statements
  • Topic 3 – Pro Forma Information
  • Topic 5 – Smaller Reporting Companies
  • Topic 6 – Foreign Private Issuers
  • Topic 7 - Related Party Matters
  • Topic 8 – Non GAAP Measures
  • Topic 9 – MD&A
  • Topic 12 – Reverse Acquisitions
  • Topic 13 – Subsequent Events
  • Topic 14 – Tender Offers
  • Topic 15 – Employee Stock Benefit Plans
  • Topic 16 - MJDS
cf oca reorganization
CF-OCA: Reorganization

Wayne Carnall

Chief Accountant

Craig Olinger

Deputy Chief Accountant

(Operations)

Mark Kronforst

Deputy Chief Accountant

(Policy) New

Associate Chief

Accountants

Associate Chief Acct (New),

Staff

Accountant, Academic

Fellow

reorganization reason responsibility
ReorganizationReason & Responsibility
  • Reason for the new group
  • Responsibilities of the new group
    • Work closely with the AD groups to facilitate the sharing of information with and the resolution of issues among the accounting staff in the entire Division
    • Coordinating the updating and publication of the Financial Reporting Manual on a real time basis
    • Creating and issuing other forms of guidance – primarily internal, but also external guidance on financial reporting and disclosure
    • Developing/revising policies and programs with respect to the Division’s accounting, technical and interpretative program
    • Organizing and developing accounting training sessions
filing review process
Filing Review Process
  • Document on our website that explains the review process and provides names and numbers with people to call with questions

http://www.sec.gov/divisions/corpfin/cffilingreview.htm

  • Responding to comment letters
    • Bad practice
    • Good practice
current issues
Current Issues
  • Impairment of goodwill
    • Market cap below book value
    • Determining fair value of reportingunit
    • Not just accounting – implications to the business
    • MD&A disclosure – critical accounting assumptions
  • Accounting for income taxes
    • Valuation allowances
      • Disclosures
      • Implications to the business
    • APB 23 – Undistributed earnings
current issues1
Current Issues
  • Pension – assumptions, curtailments
  • Investments – OTTI
    • New FSPs
  • Segments –
    • Disclosure
    • Reporting units – impairment
    • Aggregation
  • Liquidity
current issues2
Current Issues
  • Going concern
  • IFRS 7
  • Statement of cash flows
  • TARP, TALF, etc
  • Codification
materiality
Materiality
  • Experiences this past year
  • In preparing a “SAB 99” memo -
    • Companies are simply listing the 8 points in SAB 99 and indicating “no” and concluding the error is not material
    • Companies should provide company specific information on their assertion
miscellaneous items
Miscellaneous Items
  • Disposal of interest in equity affiliates and significance test for 3-09 financial statements
  • Form S-8 – change in financial statements that require retroactive application
  • Item 11(b) of Form S-3 – SFAS 160 et al
  • Transitional Provisions of FSP APB 14-1
  • Consents – C&DI – Question 141.02
  • Non GAAP – C&DI – Question 102.05
goals for the future
Goals for the Future
  • Complete CF-OCA reorganization
  • Continue the outreach program
  • Keep current the Financial Reporting Manual and develop interpretations that will be part of C&DIs
  • Update/eliminate certain information on our website
  • Develop “No Action” style letters for certain items
  • Keep current the guidance for smaller issuers
  • Issue guidance on areas of focus for community banks
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