Events.

• Position: Financial reporting standards conference details - Brief Article

Research foundation reporting conference

More than 80 senior financial executives and accounting experts gathered in New York City on June 11 to hear about new developments in financial reporting and disclosure. Co-sponsored by the FEI Research Foundation and Treasury & Risk Management magazine, the day-long event, "The New Rules of Financial Disclosure," featured talks and panel discussions by preparers, auditors, regulators, ratings agency executives and others.

In one session examining the current complexity of reporting standards, Philip D. Ameen, vice president and comptroller of General Electric Co. and chairman of FEI's Committee on Corporate Reporting, supported a rules-based approach that minimizes the possibility of ambiguity. "I don't want any chance of a regulator overturning a transaction," he told the audience.

Ameen noted that GAAP contains both principles-based and rules-based accounting, but said that some areas, like lease accounting, are "quite unambiguous." FAS 133, the standard on derivatives that Ameen has been publicly critical of, "is a good example of principles-based accounting," with much of its interpretation based on the question of what constitutes a derivative.

Another panelist, John Wulff, a former treasurer of FEI who now serves on the Financial Accounting Standards Board, argued for a more principies-based approach. Wulff, who conceded that the current plethora of rules is "a profoundly frustrating environment," said their complexity has made it impossible for companies to keep up with the standards.

Wulff argued that some of the FASB's January 2002 announcements offered hope for reducing complexity by promoting broader, simpler standards. "Principles-based standards presuppose a conceptual framework" but need a clear objective, he said, since fully understanding the objective allows drafting standards with less detail.

Ameen, however, argued for doing away with the conceptual framework approach. The FASB, he...