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2009 ANNUAL MEETING
MEMBERS OF THE LAW AND ACCOUNTING COMMITTEE:
In my last newsletter, I noted that perhaps more than at any time in recent
memory, accounting issues have been at the
forefront. "Mark-to-market" accounting, IFRS, and loss contingency
disclosures have all been highly visible and often contentious issues in
the legal, business and political spheres. I predicted that these issues
would continue to be lively and controversial during the rest of this year.
That seems to have been the case. Most recently, the Obama Administration's
regulatory reform proposals specifically identified fair value accounting,
loan loss provisioning and international standards convergence as three
areas for focus during the rest of this year. Meanwhile, the subject of
accounting regulation has heated up, with the Supreme's Court decision to
rule on the constitutionality of the Public Company Accounting Oversight
Board and ongoing concerns resulting from extraterritorial application of
countries' accounting firm regulations.
We are looking forward to seeing you and engaging on these and other issues
at the Business Law Section's Annual Meeting in Chicago. Please plan on
attending our Committee meeting and programs. Here's a description of our
planned activities in Chicago, as well as an update on some of the
Committee's recent projects.
Our committee meeting is from 8:30 a.m. to 10:30 a.m. CDT on Sunday,
August 2, at the Sheraton Chicago, Colorado Room, Level 2. We also will
provide a dial in number for those who wish to participate by phone.
Some of the expected topics include:
FASB Codification of Accounting StandardsThe FASB's new codification
and (purportedly non-substantive) restatement of all U.S. accounting
principles, which went into effect on July 1.
PCAOB Constitutional CaseThe litigation concerning the
constitutionality of the Public Company Accounting Oversight Board, which
will be heard by the Supreme Court in the fall, and possible implications
of a decision striking down the PCAOB.
SECStatus of IFRS Roadmap and accounting convergence generally, and
other recent developments.
FASB Proposed Disclosure Standards for Loss ContingenciesRecent
developments on the loss contingency front.
FASBOther recent FASB activities.
PCAOBCurrent developments, including new rules regarding timing of
inspections of foreign accounting firms.
OrganizationalIf time permits, we hope to discuss:
- Alternative ways we can deliver value to members, such as webcasts,
telephone briefings, and other content sources.
- Expanding our focusareas of intersection of law and accounting
beyond just the financial reporting sphere.
Even if you are unable to attend the meeting, please give me your
thoughts on the foregoing. Also, we are always looking for support from
members who would like to participate in our projects or who have ideas
about what the Committee might do.
"Stress Test: The Impact of the Financial Crisis on Mark-to-Market
and Other Critical Accounting Policies Affecting Financial and Other
Companies"2:30 p.m. to 4:30 p.m. CDT, on Sunday, August 2,
at the Chicago Sheraton, Superior A & B Room, Level
2co-sponsored with the Committee on Federal Regulation of Securities.
We are planning a multi-faceted panel, which will focus on the many ways
in which accounting standards, and standard setters and regulators, have had
to respond to the financial crisis. Among other things, we will look at
the FASB's mark-to-market changes and their impact on recent financial
reporting by financial institutions; going concern opinions, which have
become more of a concern to businesses in all sectors in light of
deteriorating economic conditions and liquidity crunches; and goodwill
impairment, resulting from businesses' needs to reassess the carrying value
of business units in light of recent results and stock prices. We will
also cover late-breaking developments, including the Obama Administration
proposals and the expected report of the FASB/IASB Financial Crisis
The panel will be moderated by Tom White and panelists will include Allen
Bannister, partner in Gibson Dunn & Crutcher LLP; Jeff Ellis, Managing
Director of Huron Consulting Group; Dan Goelzer, Member of the Public
Company Accounting Oversight Board; and Linda MacDonald, Senior Managing
Director of FTI Consulting.
Recent Meetings and Programs
2009 Spring Meeting. On April 18, 2009, we presented a program at
the Business Law Section Spring Meeting in Vancouver, co-sponsored by the Committee on Federal Regulation of
Securities, on "Cross-Border Impact of U.S. Adoption of International
Financial Reporting Standards."
You can find summaries of our recent committee meetings, along with Randy
McClanahan's very useful summaries of current FASB developments, at the
Committee's webpage: Business Law Section: Law and Accounting.
Committee Comment Letters
SEC Rulemaking File S7-27-08, "Roadmap for the Potential Use of
Financial Statements Prepared in Accordance with International Financial
Reporting Standards by U.S. Issuers." Together with the Federal
Regulation of Securities and Audit Letter Response Committees, we prepared
a comment letter on the SEC's proposed IFRS roadmap. The comment letter
was filed on May 20, 2009.
As our agenda indicates, accounting issues will continue to be important
for our clients. Our Committee meetings, our participation in programs and
the drafting of comment letters and articles about accounting developments
provide valuable resources for business lawyers to keep up with and
exchange views and information about accounting and auditing developments
of relevance to their practices. Please join us in Chicago on August 2.
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