Source:
Financial WeekThe Financial Accounting Standards Board has delayed by a year the deadline by which companies will have to consolidate qualified special-purpose entities under FAS 140.
The new rule, designed to help investors more easily gauge a company’s liabilities from off-balance-sheet securitized assets, was slated to go into effect Jan. 1 for certain preparers, with a one-year delay for existing QSPEs.
But during its meeting this morning, FASB nixed that timeline, which had been approved in June.
“There was pressure and interest from Washington for this change of heart,” Jim Vogel, an analyst with FTN Financial Group, wrote in an e-mail. “But it’s not clear how much FASB was bowing to that as they were to complaints of whipsawing accounting changes at financial institutions, which may soon have the option of moving to
” rather than complying with U.S. GAAP.
Read more: http://financialweek.com/apps/pbcs.dll/article?AID=/20080730/REG/769034436/1036
This is bigger news than you may realize. This rule was designed as an end-around for an accounting trick that companies are using to hide how much money they're losing. The fact that there was "pressure and interest from Washington for this change of heart" speaks volumes. What is being hidden from us, and why?