What have you done for me lately, CCR?

• Position: Financial Executives Institute's Committee on Corporate Reporting - From FEI

After spectacular success in influencing the accounting for income taxes standard and the 1990 Wyden Bill, FEI's Committee for Corporate Reporting (CCR) has established a solid track record on issues confronting the business community.

"We believe CCR more than any other business group influenced the repeal of FASB Statement 96, on accounting for income taxes, and its replacement with Statement 109," said current CCR Chairman Michael F. Sullivan, controller of Shell Oil.

With 35 to 40 members, he explained, CCR is divided into subcommittees that also maintain contact with the SEC, FASB, and AIC-PA, in addition to overseeing developing issues. Current hot topics CCR subcommittees are now dealing with, he said, include financial instruments, hedging, and stock compensation.

At a recent CCR meeting, members of five subcommittees discussed how they conveyed industry's message on these hot issues to Congress and the FASB.

* Financial Instruments: Jay Perrell, vice president--financial standards, American Express; alternate to Chairman Daniel T. Henry.

Since 1986, the FASB has been discussing how to account for the new financial instruments of the 1980s. "Our first major success," said Perrell, "was convincing the board that a company shouldn't be forced to disclose virtually every financial instrument it uses, regarding maturity, cost basis, market value, applicable interest rates, etc. We convinced them that was too much, not only difficult to put together but also to read." As a result, the FASB concentrated on disclosure requirements for off-balance sheet financing (interest rate swaps, etc.), and the subcommittee generally supported the resulting Statement 105.

For the recognition and measurement part of the project, the FASB focused on distinguishing between debt and equity. This was driven by the need to understand employee stock options (see the stock compensation subcommittee below), and Perrell reported the board has reached a tentative conclusion that such options are not a liability. "That's good, we told them." However, a second phase, the disclosure of current values of financial instruments, produced Statement 107, which Perrell reported is "very close to what was proposed. We had mixed success there."

The subcommittee has also analyzed a detailed discussion memorandum that takes a building-block approach to financial instruments. Perrell called it "one of the most comprehensive works they have ever come out with. It's like...