CFO Private Roundtable 03/06/08
Guest Speakers – Mark Fitzpatrick, Taft Kortus – Moss Adams













FASB & EITF issuances are down – likely holding back due to US, Int’l
convergence
157 – Establishes framework for Fair Value – effective for ’09 – applies to
anything not covered by anything else (i.e. stock based comp covered elsewhere)
Fair value should be for an orderly transaction.
Hierarchy –
o Lvl 1 – quoted market price
o Lvl 2 – Observable assumptions for assets/liabilities
o Lvl 3 – unobservable assumptions
Disclosure changes – spend more time explaining what you did/tabular format
Personal financial statements are often non-GAAP, so are not necessarily subject
to FAS 157
FAS 158 – Pension Accounting – No real change, but dates must be matched up
now
FAS 159 – Fair Value option for Financial Assets/Liabilities; this is an optional
standard. You can opt in, but you cannot opt out later. Need to recognize
impairment of assets before recognizing FV of assets, but you can report
securities at fair value.
o You can adopt this for each set of securities, but if you adopt for one set,
that set needs be be measured at FV for the full period of ownership. Is
not applicable to pension, lease, or classified as a part of shareholders
equity.
o Real estate and other assets may be given FV options later, but there are
comparability issues at this time.
o Asset valuation estimators will come into greater demand
FAS 141 – business combinations
o More transaction costs are expensed, adds guidance on assumption of
contingent liabilities
FAS 160 – Non-controlling interests
o If consolidating non-controlled partner, changes how reporting flows;
when non-controlling interest is increased to controlling interest, net
income and loss are allocated
EITF 6-10
o Accounting for expense for life insurance arrangements and reporting the
liability for split-dollar life insurance (creates book vs tax variance; EITF
follows closer to tax treatment)
EITF 7-02
o Identified issues with convertible debt issues – does not come to any firm
conclusion
EITF 07-01
o Collaborative arrangements that are not joint ventures – how to record
expenses and revenues















EITF 07-03
o Accounting for non-refundable R&D payments – Should be recognized as
expense over life of services (deferred recognition)
EITF 07-04 and 06 –
o How to account for items linked to stock price
FIN 48
o Applies to tax positions under FAS 109
o Only deals with federal income taxes – how to account for potential
liabilities, disclosures, reporting reserves for uncertain tax positions,
reporting for interest and penalties
o Publics adopted for 07, Privates are to adopt for 08, if you think there will
be a cumulative effect, privates must report for 07
o Can lead to a discussion of probability approach (largest benefit with more
than 50% prob of occurring) or materiality discussion
Many new audit standards – increased auditor work, increased documentation of
controls and procedures for companies
SAS 114 – Auditor’s communication with those charged with governance –
significant audit findings (see slides)
Convergence – US is only country who has not adopted IFRS (International
Financial Reporting Standards). IFRS may be different between some countries,
US objected and wants stronger standards from other countries.
SEC has eliminated IFRS to US GAAP rec for foreign filing companies
Revenue recognition is less stringent for IFRS, US seeks to tighten up those rules
in IFRS
Where can you see differences between GAAP and IFRS standards? Moss
Adams will provide documentation, Nancy will provide to members via email.
IFRS is often less onerous than US GAAP, but can be more so (long lived assets,
for instance)
Current projects:
o Codification of GAAP
o Conceptual framework
o Revenue recognition
o Financial statement presentation – possible change in Income Statement?
o Leasing Transactions
o What qualifies as Liabilities vs Equity – as bankers come up with debt vs.
equity instruments
Many changes to tax code under stimulus act
o Quicker depreciation to encourage investment
State & Local Tax – What’s your source of information? Auditor? Currently,
must figure out taxes based on customer address rather than
wholesaler/manufacturer address
XBRL – Real time financial reporting; likely to not have impact on private
companies, but may affect public companies
Gift cards – Localities have laws regarding these accruals




Tax theme – Had CEO with low salary, took dividends instead. Tax auditor
looked, but did not ask for change; can work for S Corp or LLC to avoid 2.9%
No changes with Fin 46 and Variable Interest Entities
Current Topics –
o Equipment leases for high tech – can allow higher equipment turnover for
tech companies, but can also be lease – purchase agreement
Who is feeling slowdown in economy?
o Radio is slowing
o CFO selections is faster
o Group consensus – Seattle is stronger right now than many other areas in
US
o Woods Creek has not seen softening
o Speakeasy small business segment has not slowed
o Suburban single family housing is down -Seeing some movement toward
multi-family
o Freight forwarding – commercial business is up, military business is down
o Gene Juarez is very slightly up