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College: Lecturer: Course: Date: Summary and response Outline of contents Contents Page Abstract 3 Stimulus Bill Bites Losing Companies Summary 3 Response 4 FASB Adds Fair-Value Fix to 2009 Agenda Summary 4 Response 5 Abstract This paper is a summary of two articles posted on the internet in these sites respectively: 1. web? f = archives 2. web? f = archives 1. Stimulus Bill Bites Losing Companies Summary Under the title Stimulus bill bites losing companies, Marie Leone describes how a recent provision into the stimulus bills may result in only the small companies benefiting.
The provision, called the Net Operating Loss (NOL), implies that only companies with revenues below 15 million dollars will benefit from the 790 billion dollar stimulus package. The current provision within the stimulus package was arrived at after centrists demanded a cut back on the stimulus package. The original figures floated for the stimulus package were in the 800 billion range, but had to be cut back to form the compromise draft. Together with the overall reduction of the stimulus package, the NOL provision was also reduced to about a tenth of the original figures. The merit of the compromise bill is that debts repurchased by companies have the recognition of the gains associated with them differed for five years, thus easing off the financial strains. To further reduce the strain, this recognition has been spread over another five years.
Response Personally, the stimulus bill, in its present state, is the best compromise that could have been arrived at, considering the factors. On one hand, there were companies to revive, and on the other, the treasury had its concerns of an overdraft. Given these facts, the companies should just accept the stimulus package and be grateful that it was even possible for such a bill to pass. 2. FASB Adds Fair-Value Fix to 2009 Agenda Summary Under the title FASB Adds Fair-Value Fix to 2009 Agenda, Sarah Johnson describes how the Financial Accounting Standards Board (FASB) is working towards giving accountants a guide for measuring fair value in illiquid markets. The new guidelines will eliminate confusion when determining whether an asset or liability's market is active or inactive.
Along with this, companies will be called upon to expand on their fair-value disclosures. This will reduce the volatility currently observed in the financial services sector. The Securities and Exchange Commission is in support of mark-to-market accounting, despite the financial crisis. This is evidential of its support for the current FASB rules regarding such accounting, although it acknowledged the hardships that banks are facing when determining current asset value for products. Response From a personal point of view, the initiative by FASB is long overdue. The relief on the accountants after the guidelines have been provided will be profound.
The additional disclosures required of companies will further ease the load for accountants.
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Research essay sample on Fair Value Five Years
