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The Federal Financial Institutions Examination Council (FFIEC) proposed guidance to help insured depository institutions improve their disclosure to customers with overdraft protection accounts (www.fdic.gov/news). The proposal explains how banks can reduce their credit and reputational risk by educating customers to use such accounts more effectively. Comments are due August 6, 2004. The council (www.ffiec.gov) comprises the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

The Governmental Accounting Standards Board (GASB) published Statement no. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans (www.gasb.org/news), which addresses financial reporting by plan trustees or administrators regarding their stewardship of trusts or other funds established to provide postemployment health care and other nonpension benefits—commonly referred to as “other postemployment benefits” (OPEB). The statement supersedes the interim guidance included in Statement no. 26, Financial Reporting for Postemployment Healthcare Plans Administered by Defined Benefit Pension Plans. At press time GASB was planning to issue an additional statement, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, that would address employers’ accounting for the costs and obligations associated with their commitments to provide postemployment health care and other nonpension postemployment benefits. Statement no. 43 appeared in last month’s JofA (See Official Releases, JofA, Jul.04, page 102) and also is available from GASB’s order department at 800-748-0659 or on the Web at http://store.yahoo.com/gasbpubs/gs43.html.

GASB also issued Statement no. 44, Economic Condition Reporting: The Statistical Section (www.gasb.org/st/summary/gstsm44.html), which amends the portions of National Council on Governmental Accounting (NCGA) Statement no. 1, Governmental Accounting and Financial Reporting Principles, that guide the preparation of statistics necessary to assess a government’s economic status. These modifications are in response to significant changes in government financial reporting, as exemplified in the comprehensive provisions of GASB Statement no. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments. Statement no. 44 (see Official Releases, page 92), which is effective for periods ending after June 15, 2005, is available from GASB’s order department at 800-748-0659 or on the Web at http://store.yahoo.com/gasbpubs/gs44.html.

GASB issued Technical Bulletin no. 2004-1, Tobacco Settlement Recognition and Financial Reporting Entity Issues, which clarifies accounting guidance on whether a tobacco settlement authority—established to obtain rights to future tobacco-related compensation—is part of the government that created it (www.gasb.org/news/nr051104-B.html). The bulletin is effective for periods ending after June 15, 2004, and can be ordered at 800-748-0659 or http://store.yahoo.com/gasbpubs/gtb0401.html.

The AICPA governing council renewed—for a second five-year period—its designation of the Federal Accounting Standards Advisory Board (FASAB) as the accounting standards setting body for federal government entities under rule 203 of the Institute’s Code of Professional Conduct (www.fasab.gov/fasabnews/fasabn85.pdf). Council based its decision on the recommendation of a panel it appointed to evaluate FASAB’s independence, due process and standards, domain and authority, human and financial resources, and comprehensiveness and consistency.

The AICPA released Auditing Governmental Financial Statements: Programs and Other Practice Aids, which contains programs and tools to help practitioners conduct government audits in keeping with GASB Statement no. 34’s new financial reporting model. Copies (product no. 006602JA) are available from the Institute at 888-777-7077 or www.cpa2biz.com.

The International Federation of Accountants (IFAC) revised its code of ethics (www.ifac.org/Guidance/EXD-Details.php?EDID=0027) to ensure that an individual who has served as lead partner of an audit engagement at an exchange-listed entity for a predefined period not longer than seven years may not participate in the engagement for another two years—whether as a lead or other partner.

The international financial reporting interpretations committee (IFRIC) of the International Accounting Standards Board (IASB) released IFRIC Interpretation 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities (www.iasb.org/news), containing guidance on modifications recognized as part of costs discussed in IAS 16, Property, Plant and Equipment, and also as a liability in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The interpretation can be ordered at www.iasb.org/resources/shop.asp.

The IASB published International Financial Reporting Standards (IFRSs) Bound Volume 2004, which provides the complete consolidated text of the latest versions of its official pronouncements—IFRSs, international accounting standards (IASs) and interpretations and supporting documents—that will take effect January 1, 2005. Australia, the European Union, Russia and other jurisdictions have said they will mandate application of IASs on or before the end of 2004. The volume can be ordered at publications@iasb.org or at www.iasb.org/resources/shop.asp.

The National Association of Securities Dealers (NASD) proposed a rule (www.nasdr.com/news/pr2004/) designed to address inappropriate practices discussed in Joint SEC/NASD Staff Report on Examination Findings Regarding Broker-Dealer Sales of Variable Insurance Products (www.sec.gov/news/studies/secnasdvip.pdf), which it released in conjunction with the SEC in June 2004. The report identified situations in which brokers inappropriately recommended variable insurance products to senior citizens and others who couldn’t afford them without obtaining home mortgages. Other questionable practices included brokers’ failure to fully disclose these products’ fees, risks and tax consequences as well as problems related to supervision and training of sales staff and account recordkeeping. The proposed rule would codify and make mandatory related best-practice guidelines NASD had issued previously. Comments are due August 9, 2004.

The Institute invited CPAs with fewer than seven years’ experience or who are under 40 years of age to participate in an online poll (http://websurveyor.net/wsb.dll/12391/memberneedspoll.htm) designed to gather information useful in developing services, products and programs that best meet the needs of new and/or younger CPAs.

The SEC published for comment proposed regulation B, which would implement provisions of the Gramm-Leach-Bliley Act of 1999 (GLBA) that delineate the securities activities in which banks may engage without registering as brokers under the Securities Exchange Act of 1934 (www.sec.gov/news/press/). GLBA introduced 11 functional exceptions to replace the act’s complete exception of banks from the definition of the term broker. The SEC proposal, which is based on interim rules the commission adopted in 2001, defines some of the statutory terms contained in the GLBA exceptions and recommends—with investor protection in mind—additional exemptions for certain other bank activities. Comments are due August 1, 2004.