E&Y Offers Corporate Reporting Update.

Once again, as it has for more than 20 years, Ernst & Young is offering a Year-End Corporate Reporting Update Program aimed at providing timely information and critical insight on current financial reporting developments to FEI members. Some 35 FEI chapters hosted the accounting firm's program last year, and the Financial Accounting Standards Board, Securities and Exchange Commission and others continue to make major changes that financial executives will want to follow actively and understand.

The program covers major topics that affect companies, such as:

* Expected New Rules for 2000. In what would be a major change in future financial reporting, the FASB's proposed standard on business combinations would eliminate the use of the pooling-of-interests method and significantly change the accounting for goodwill and other intangible assets. Proposed consolidation rules, expected to be finalized before the end of 2000, would require a parent to consolidate entities that it "controls" (under the FASB's new definition) even though it owns less that 50% of the entity's voting stock. More entities will be required to be consolidated, and management must understand and get ready for these changes now. In addition, the FASB issued an Interpretation of APB 25 that significantly changes the accounting for certain stock option grants. Management needs to be aware of these changes if it wants to avoid recognizing compensation expense.

* Derivatives & Hedging. The FASB's amendment of Statement 133 will have a positive impact on the implementation efforts of many companies. However, the complexity of the FASB's new standard, even after the amendment, should not be underestimated. E&Y continues to urge companies that have not yet done so to begin their assessment of Statement 133, and claims its 2000 program will assist in these efforts.

* Other Reporting Developments. The FASB's current agenda ensures that standard-setting controversies will go on unabated. As part of its project on asset impairment, the FASB is reconsidering the EITF's conclusions on restructuring charges, including severance costs, and plans to issue an exposure draft in June 2000. The FASB issued an exposure draft on asset retirement obligations that, if adopted, would utilize new present value measurement concepts and result in a significant change in practice for many companies. In addition, the FASB's Preliminary Views on the fair value of financial instruments could lead to major changes to the existing accounting model that has been based principally on historical cost. If ultimately adopted, the new model would require all financial instruments to be measured at fair value with changes in fair value to be reflected immediately in income. E&Y's program provides the latest information available on these and other FASB, AICPA and EITF projects. Companies need to be aw are of these developments and be ready to react to them now.

* SEC Activities. The SEC continues to focus on perceived earnings management abuses, and the 2000 program will discuss many of the complex implementation issues that companies face as a result of the issuance of SAB 101 on revenue recognition. Also on the agenda is the SEC's Concept Release on international accounting standards, and how this release might impact companies in future years. The program will review so-called SEC "hot buttons"--that is, areas the SEC targets for review--and how registrants can respond to SEC comments. In addition, E&Y will discuss important new rules on audit committees and other matters related to corporate governance.

E&Y officials say their program can be tailored to focus on any of the financial reporting topics that interest an individual FEI chapter, and fits a variety of formats. The firm will select the topics most relevant to a chapter's members (for instance, programs can be customized specifically for financial reporting topics affecting non-public companies) and to decide on the length of the program--from a half-hour to approximately two to three hours. E&Y says the program can be scheduled after dinner, in conjunction with a business luncheon, in the morning following a breakfast, or around a regular meeting. The program qualifies for continuing professional education credit, and a participant booklet, outlining the major topics, will be distributed to all that attend.

Presented by Ernst & Young partners, the program is designed to explain new developments affecting year-end financial reporting -- meaning that scheduling it between early November and mid-December maximizes the benefit to members. E&Y says, however, that it can offer the program at a later or slightly earlier date to accommodate a chapter's schedule. To schedule a presentation, the firm urges FEI members to call the managing partner of the nearest Ernst & Young office.