Congressmen attack derivatives rule

Article Abstract:

Members of the House and the Senate have criticized the SEC for introducing the derivatives disclosure rule without adequate analysis of its impact on preparers. The rule requires companies to disclose information regarding the qualitative and qualitative risk of their derivative investments as well as their accounting policies for these investments. House Government Reform and Oversight subcommittee Chmn Rep David McIntosh (R-IN) has already met with SEC Chief Accountant Mike Sutton and his deputy, Steve Swad, to discuss the Commission's failure to conduct a thorough analysis of the rule's impact. SEC Chmn Arthur Levitt Jr promised Senate Securities Subcommittee Sen Phil Gramm (R-TX) that the impact of the derivatives rule will be reviewed by mid-June 1998. Gramm had recommended that the FASB modify its exposure draft on derivatives accounting in view of the many questions it raised.

Evaluation, Laws, regulations and rules, Derivatives (Financial instruments), Disclosure (Securities law), United States. Securities and Exchange Commission

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New reporting standards for not-for-profits

Article Abstract:

The FASB introduced two accounting-standards statements in June 1993 to remove inconsistencies in the accounting of nonprofit organizations. The first was Statement of Financial Accounting Standards (SFAS) 117, entitled 'Financial Statements of Not-for-Profit Organizations,' while the other was SFAS 116, known as 'Accounting for Contributions Received and Contributions Made.' These statements are expected to result in radical changes in the financial reporting of some entities. Instead of the use of funds, the statements focus on the source of funds, just like in commercial reporting standards. Given that a change in financial statements could alter public perception of the financial health of an organization, nonprofits would do well to choose the most suitable reporting approach and teach financial statement users on the proper interpretation of the new information.

Nonprofit organizations

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