Since its introduction, FAS No. 157 companies have struggled with implementation and compliance issues. Companies have been grappling with accounting and valuation issues related to Fair Value. Many have seen market value melt away particularly which has been exacerbated by the current economic free fall. Although there is much uncertainty surrounding this issue – one thing remains clear Fair Value is here to stay at least for the time being and companies must learn to deal with this most pressing issue.
The Knowledge Congress is assembling a panel of distinguished professionals and key regulators to help understand Statement No. 157 and its impact on your firm and the broader market. The speakers will present their expert opinions in a two-hour LIVE Webcast.
Course Level: Intermediate
Prerequisite: None
Method Of Presentation: Group-Based-Internet
Developer: The Knowledge Conference
Recommended CLE/CPE Hours: 2.0
(Please note, your State Bar or Accounting Board will make the final determination with respect
to continuing education credit.)
Advance Preparation: Print and review course materials
Course Code: 093851
Craig Stevens
Senior Manager, Regulatory & Capital Markets Consulting
Elie Zabal
Senior Vice President, Treasury and Regulatory Compliance Division
Kurt S. Schulzke
Special Counsel
Scott A. Taub
Managing Director
Richard Marshall
Partner
Craig Stevens, Senior Manager, Regulatory & Capital Markets Consulting, Deloitte & Touche
- FAS 157 valuation requirements (overview)
- active markets
- exit prices
- distressed transactions
- Fair Value in an illiquid market
- Mark to model (new FAS 157 FSPs)
- Changes to current guidance
- Comment letters
- Impact on financials
- Credit valuation adjustments
Scott A. Taub, Managing Director, Financial Reporting Advisors, LLC (FRA)
- Where are we and How Did We Get Here? Where are we?
- A Problem and a (Possible) Solution Fair Value problems and the FAS 157 Solution
- Statement 157 – Fair Value
- Fair Value (Entity-Specific) vs. Fair Value (SFAS 157)
- FSP FAS 157-3: Fair Value in Messy Markets
- FSP FAS 157-4: Fair Value in REALLY Messy Markets
- Where do We Go from Here: SEC Mark-to-Market Study
- Advice for Practitioners
Elie Zabal, Senior Vice President, Treasury and Regulatory Compliance Division, Triple Point Technology
- 157 Disclosures
- Complexities of Incorporating Credit Risk into Valuations
- Implementation Issues
Richard Marshall, Partner, Ropes & Gray, LLP
- SEC expectations and guidance on testing valuations
- The "acid test"
- The "static price" test
- Required disclosures
- Relevant recent enforcement cases on valuation: lessons for compliance
- The Citigroup case
- Earlier MD&A cases
- The Bear Stearns case and its implications for valuation disclosure
- Reflections on the implications of the FAS 157 debate on the process for developing accounting standards
- Congressional efforts to modify FAS 157
- The SEC report and its response
- Congressional pressure and the changes to FAS 157
- Implications for the future development of accounting standards
- Did FAS 157 contribute to the financial crisis?
- The argument that FAS 157 contributed to the financial crisis
- The case exonerating FAS 157
Kurt S. Schulzke, Special Counsel, Slappey & Sadd, LLC
1. In implementing FAS 157, beware the tendency to focus on details at the expense of the big picture
2. FAS 157 calls for detailed analysis, management judgment and disclosure in a highly ambiguous factual context using reporting guidance that is sometimes poorly worded, contradictory or incomplete (e.g. FAS 157-4 uses the phrase “significant decrease in the volume and level of activity” without distinguishing between “volume” and “level of activity”)
3. Against this backdrop, watch out for SEC Rule 12b-20 (and similar provisions) which the SEC often uses to sanction companies that provide a misleading overall view of financial results or position while literally complying with GAAP.
4. The rule: “In addition to the information expressly required to be included in a statement or report, there shall be added such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made not misleading.”
5. Examples of Rule 12b-20 enforcements: Coca Cola (gallon pushing) and Sony (failing to disclose music and movies as separate segments). Both companies complied with GAAP. Both were held in violation of Rule 12b-20.
- Controllers
- Business Officers
- CFO’s
- Treasurers
- CPAs
- CFAs
- Auditors
- Financial Directors/Analysts
- Valuation Analysts
- Investment Bankers
This is a must attend event for anyone interested in knowing more about the Statement 157 and its impact on businesses.
- New guidance explained by the most qualified key leaders & experts
- Hear directly from key regulators & thought leaders
- Interact directly with panel during Q&A