Editorial Staff

Publisher/Editor-in-Chief
Colleen Katz

Managing Editor
Elizabeth Uva

Senior Editors
Laura Baron
Katharine W. Coveleski
Peter D. Fleming
Michael Hayes
Robert Tie
Stanley Zarowin

Senior Assistant Editor
Sarah Cobb

Assistant Editor
Vincent Nolan

Contributing Editors
Anita Dennis, Lesli S. Laffie
Joan Mancuso, Barbara J. Shildneck

Production Director
Peter M. Tuohy 

Art Director
Jeryl A. Costello

Production Manager
Gene Cioffi

Senior Manager—
Production Services—
Publishing Technology
Robert DiCorcia

Production Editor
D. Hillel Lofaso

Senior Production Associates
Valrie Mason, Ingrid Medina

Art Assistant
Patricia L. Arrington

Associate Publisher
Thomas R. Greve

Advertising Team Manager
Karin DeMarco

Advertising Representatives
Gwenn M. Paness
Joseph Torres 

Advertising Coordinator
John Weinberg

Editorial Offices
201-938-3292
e-mail: joaed@aicpa.org

Advertising Office
201-938-3767

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Highlights

FASB REVISES DERIVATIVES GUIDANCE
In April the Financial Accounting Standards Board issued Statement no. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (www.fasb.org/news/nr043003.shtml). FASB changed and clarified the earlier statement by requiring companies to account similarly for derivatives contracts with comparable characteristics. The board said it expected the amendment to foster greater consistency of financial reporting for contracts that were composed entirely of derivatives or that included embedded derivatives which call for separate accounting. Specifically, the new statement clarifies the circumstances under which a contract with an initial net investment has the characteristics of a derivative as defined in paragraph 6(b) of Statement no. 133. It also describes the situations in which a derivative contains a financing component that warrants special reporting in the statement of cash flows.

With the following exceptions, Statement no. 149 is effective for contracts entered into or modified—and for hedging relationships designated—after June 30, 2003:

Those of its provisions relating to Statement no. 133 implementation issues that have been effective for fiscal quarters that began before June 15, 2003, should continue to be applied according to their respective effective dates as specified in Statement no. 133.

Paragraphs 7(a) and 23(a) of the new statement, which relate to forward purchases or sales of when-issued, or other not-yet-created, securities should be applied to existing contracts as well as new ones entered into after June 30, 2003.

Copies of the statement are available from FASB’s order department at 800-748-0659 or http://store.yahoo.com/fasbpubs.

SEC REQUIRES INSIDER HOLDINGS REPORTS ONLINE
To disseminate information on corporate insiders’ equity transactions more quickly and widely than ever before, the commission issued final rules—and updated its EDGAR filing manual—requiring officers, directors and anyone holding more than 10% of a company’s outstanding stock to disclose transactions involving such holdings via a new Web-based system (https://www.onlineforms.edgarfiling.sec.gov) the SEC established for that purpose.

The deadlines for filing the reports—which include SEC Forms 3, Initial Statement of Beneficial Ownership of Securities; 4, Statement of Changes in Beneficial Ownership of Securities; and 5, Annual Statement of Beneficial Ownership of Securities—vary according to criteria specified in SEC rules related to the Securities and Exchange Act of 1934 (www.sec.gov/divisions/corpfin/forms/16rules.htm). Further, the new provisions require a corporation that maintains a Web site to post the reports there by the end of the business day after it files them on the EDGAR system.

The rules (www.sec.gov/rules/final/33-8224.htm) implement provisions of the Sarbanes-Oxley Act of 2002. When they take effect June 30, the SEC will consider forms companies submit by 10 p.m. (ET) as filed on that same business day. In view of these extended filing hours, the commission no longer will allow temporary hardship exemptions for reports filed late.

PCAOB AND FASB RECEIVE SEC APPROVAL
Following an evaluation it made in keeping with the Sarbanes-Oxley Act, the commission determined the Public Company Accounting Oversight Board’s structure and capacity enabled it to carry out the act’s requirements and enforce public companies’ compliance with it. After a separate but similar assessment required under the act, the SEC reaffirmed that FASB satisfied all criteria an accounting standard setter must meet for the commission to generally accept its pronouncements for the purpose of submitting securities filings.

Editorial Advisers

Kenneth D. Askelson, James Bean, Phyllis Bernstein, John C. Boma, Jacob R. Brandzel, Steven J. Brown, Jolene C. Brucks, Thomas F. Burrage, Linda Burt, J. Gregory Bushong, R. Patrick Cargill, Benson J. Chapman, Rosemarie T. Dunn, Thomas Emmerling, Elizabeth Fender, Robert J. Freeman, John S. Gibbons, Alan Glazer, Randi K. Grant, Patrick T. Hanratty, DeAnn Hill, James E. Hunton, Frank J. Kopczynski, Jeffrey B. Kraut, Dennis B. Kremer, William F. Laurie, Alan Levin, John Lewison, Joseph P. Liotta, Mano Mahadeva, Benjamin F. Mathews, David McIntee, Anita Meola, Debra Mitchell, Roger H. Molvar, Brenda Morris, Craig Murray, Lyne P. Noella, Edward T. Odmark, Stanley Person, Mary P. Ricciardello, Mark L. Richardson, Marshall B. Romney, Peggy Scott, Carolyn Sechler, Gary Shamis, Ivan J. Sotomayor, Alan Steiger, Paul C. Sullivan, Gary R. Trugman, Robert Willens, Mark A. Yahoudy