Two exposure drafts of proposed SOPs issued.

In 2002, the Accounting Standards Executive Committee added to its agenda a project that would specifically address the application of certain provisions of AICPA Audit and Accounting Guide, Audits of Investment Companies, to non-registered investment partnerships. Because the guide had principally been directed to registered investment companies, questions continue to arise in the application of the guide by non-registered investment partnerships. The differences between the two result from significant dissimilarities between the operating structures of non-registered investment partnerships and registered investment companies.

The provisions of the proposed SOP, Reporting Financial Highlights and Schedule of Investment by Nonregistered Investment Partnerships, an amendment to the Audit and Accounting Guide, Audits of Investment Companies, and SOP 95-2, would be effective for financial statements for fiscal years ending after Dec. 15, 2003, and for interim financial statements issued after initial application. Presentation of previously issued financial highlights on a comparable basis is permitted, but not required. The provisions of the SOP should be applied prospectively from the beginning of the year of adoption.

In another action, an exposure draft of a proposed statement of position, Financial Highlights of Separate Accounts: An Amendment of the Audit and Accounting Guide Audits of Investment Companies, provides guidance on reporting financial highlights by separate accounts of insurance enterprises.

A final SOP would be effective for annual financial statements issued for fiscal years ending after Dec. 15, 2003, and for interim financial statements issued after initial application. Presentation of previously issued financial highlights on a comparable basis is permitted, but not required. The provisions of the SOP should be applied prospectively from the beginning of the year of adoption.

Comments on each exposure draft are due Sept. 15. For copies, visit www.aicpa.org/members/div/acctstd/edo/index.htm. accounting