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CCR polls members on FIN 46 deferral.

The issue of accounting for variable-interest entities (VIEs) continues to create some controversy. At its Oct. 8 board meeting, the Financial Accounting Standards Board (FASB) voted to defer adoption of FIN 46, Consolidation of Variable Interest Entities, for all VIEs or potential VIEs created before Feb. 1, 2003 until the first fiscal period ending after Dec. 15, 2003. For calendar year-end companies, this postponed the adoption of FIN 46 until year-end. Prior to the deferral, calendar year-end companies were preparing to report third-quarter results, including the impacts of adopting FIN 46.

FEI's Committee on Corporate Reporting (CCR) quickly surveyed its members to determine how companies were reacting to this adoption in light of pending third-quarter earnings releases. Twenty companies responded to the survey. Of the 17 that had not yet adopted FIN 46, 10 have decided that they will be deferring adoption until the fourth quarter.

FASB has said that during the fourth quarter, it will be reviewing a multitude of implementation issues that have come to its attention. As such, additional guidance on FIN 46 may be issued in the near future.

None of the responding companies said they planned to issue an 8-K or press release to disclose their intent to defer adoption of FIN 46, and only one company said such a deferral would be a surprise to its investors, based on the company's prior disclosures. Three companies said they expected to "unwind" their adoption of FIN 46 based on the deferral language.
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Title Annotation:advocacy
Publication:Financial Executive
Article Type:Brief Article
Geographic Code:1USA
Date:Nov 1, 2003
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