FASB Considers Revising FAS 133
The Financial Accounting Standards Board (FASB) announced that it will discuss revising Financial Accounting Statement 133 (FAS 133) at its next meeting on Wednesday, May 16. The announcement follows an "education session" held by the Board this week. The session included:
- Clarification of the application of the shortcut method,
- Discussion of practice issues related to the hedge accounting guidance in FAS 133
- Whether to add a FAS 133 project to the Board's agenda
- Identifying an approach for accounting for hedging activities if the Board decides to add the project to the agenda.
In a Wall Street Journal article this week, FASB Chairman Robert Herz explained that the question before the Board is "whether we do anything broadly with FAS 133 and if so, what would we do?" A broad reexamination of FAS 133 does not guarantee the results industry seeks, but getting FASB to reconsider the rule is a substantial achievement. The accounting standard has led to more than 120 restatements of financial results in the last two years.
CMC has coordinated a coalition effort to amend FAS 133 since 2004. Our most recent effort included submitting a draft Staff Position to FASB; however, the Board decided to not take the issue up at that time. A timeline and all of CMC's efforts on FAS 133 are detailed on our website.