Monday, April 03, 2006
EITF 00-19
NOTE: This is a work in progress.
The heirarchy of GAAP, from most authoritative to least:
A. Accounting principles promulgated by a body designated by the AICPA Council
B. Pronouncements of bodies, composed of expert accountants, that deliberate accounting principles or describing existing accounting practices that are generally accepted, providing those pronouncements have been exposed for public comment and have been cleared by A above.
C. Pronouncements of bodies, organized by a body in category A above and composed of expert accountants, that deliberate accounting issues in public forums: interpreting, establishing principles, describing practices that are generally accepted or by stuff in B that has been cleared by A, but not exposed for public comment.
D. Practices or pronouncements widely recognized in a particular industry or specific circumstances.
Category A: FASB's SFAS, APB's Opinions, AICPA's Accounting Research Bulletins
Category B: FASB Technical Bulletins, AICCPA Industry Audit and Accounting Guides that have been cleared by FASB, AICPA Statements of Position
Category C: AICPA AcSEC Practice Bulletins that have been cleared by FASB, consensus positions of the FASB EITF
Category D: AICPA accounting interpretations and implementation guides (Q&A), and misc stuff
...
Category Z: Google searches for accounting tips from strange websites.
(trivia: An auditor can't give an unqualified opinion if something departs from category A unless due to something weird it would make the statements misleading.)
IETF is the FASB Emerging Issues Task Force. Formed in 1984 by the FASB. Members come from public accounting firms and other experts. An IETF consensus is considered to be Category C GAAP.
According to Wiley GAAP 2002:
EITF Abstract Issue No. 00-10
Title: Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock
That kinda sounds like a country music song, doesn't it?
From the dates of discussion which go all the way back to 1987, it looks like this was the infamous battle over stock options that flared up in the early to mid 1990s and again around 2002.
This references FASB Statement 123, Accounting for Stock-Based Compensation, which is the set of methods that we've seen for a few years.
It also references FASB Statement 133, Accounting for Derivative Instruments and Hedging Activities
Also FASB Statement 138 which also deals with Certain Derivative Instruments and Certain Hedging Activities
And APB Opinion No 14, Accounting for Convertible Debt and Debt Issued with Stop Purchase Warrants
And lots of other Statements and Opinions and Stuff.
Like I said, this is a work in progress.
The heirarchy of GAAP, from most authoritative to least:
A. Accounting principles promulgated by a body designated by the AICPA Council
B. Pronouncements of bodies, composed of expert accountants, that deliberate accounting principles or describing existing accounting practices that are generally accepted, providing those pronouncements have been exposed for public comment and have been cleared by A above.
C. Pronouncements of bodies, organized by a body in category A above and composed of expert accountants, that deliberate accounting issues in public forums: interpreting, establishing principles, describing practices that are generally accepted or by stuff in B that has been cleared by A, but not exposed for public comment.
D. Practices or pronouncements widely recognized in a particular industry or specific circumstances.
Category A: FASB's SFAS, APB's Opinions, AICPA's Accounting Research Bulletins
Category B: FASB Technical Bulletins, AICCPA Industry Audit and Accounting Guides that have been cleared by FASB, AICPA Statements of Position
Category C: AICPA AcSEC Practice Bulletins that have been cleared by FASB, consensus positions of the FASB EITF
Category D: AICPA accounting interpretations and implementation guides (Q&A), and misc stuff
...
Category Z: Google searches for accounting tips from strange websites.
(trivia: An auditor can't give an unqualified opinion if something departs from category A unless due to something weird it would make the statements misleading.)
IETF is the FASB Emerging Issues Task Force. Formed in 1984 by the FASB. Members come from public accounting firms and other experts. An IETF consensus is considered to be Category C GAAP.
According to Wiley GAAP 2002:
The EITF has been severely criticized for promulgating GAAP without sufficient due process procedures. Only a limited audience is aware of each issue, and the period of exposure is sometimes very brief.Ok, so EITF Abstracts are considered Category C GAAP, like consensuses.
EITF Abstract Issue No. 00-10
Title: Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock
That kinda sounds like a country music song, doesn't it?
From the dates of discussion which go all the way back to 1987, it looks like this was the infamous battle over stock options that flared up in the early to mid 1990s and again around 2002.
This references FASB Statement 123, Accounting for Stock-Based Compensation, which is the set of methods that we've seen for a few years.
It also references FASB Statement 133, Accounting for Derivative Instruments and Hedging Activities
Also FASB Statement 138 which also deals with Certain Derivative Instruments and Certain Hedging Activities
And APB Opinion No 14, Accounting for Convertible Debt and Debt Issued with Stop Purchase Warrants
And lots of other Statements and Opinions and Stuff.
Like I said, this is a work in progress.
// posted by Bruce @ 7:06 PM 
