FEI 'Top 10 Financial Reporting Challenges for 2007'

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02 Jan 2007

Colleen Cunningham, the CEO and President of Financial Executives International, has compiled the following list of the Top 10 Financial Reporting Challenges for 2007.

A number of the challengesare being addressed in joint IASB-FASB projects:
  1. Internal Controls. Implementation of requirements of the Section 404 of Sarbanes-Oxley Act concerning reports on internal controls.
  2. Uncertain Tax Positions. Problems in implementing FIN 48 Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109. This issue is being addressed in the joint IASB-FASB Convergence Project on Income Taxes.
  3. XBRL. "Expect more momentum in 2007 as more companies voluntarily adopt and the SEC continues to prioritise XBRL."
  4. Fair Value. FAS 157 Fair Value Measurement takes effect in 2007. IASB has issued a Wrap-around Discussion Paper.
  5. Servicing Assets and Liabilities. Implementation of FAS 156 Accounting for Servicing of Financial Assets - an Amendment of FAS 140.
  6. Complexity in Financial Reporting. "The level of restatements (over 10 percent of [SEC] registrants) implies a level of complexity in the existing reporting model that requires subject matter experts on staff for every accounting area."
  7. Derivatives. Particularly, master netting arrangements.
  8. Pensions. FASB has issued FAS 158, Employers' Accounting for Defined Benefit Pension and other Postretirement Plans. IASB has begun a Project.
  9. Earnings per Share. The IASB and FASB will each issue exposure drafts on the EPS Convergence Project.
  10. Business Combinations. IASB and FASB Joint Project on Business Combinations Phase 2.

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