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SEC Speech: "Issues on Valuing Customer Relationship Intangibles and the Market Participant Approach"

Thursday, January 5, 2006

The Committee on Corporate Reporting (“CCR”) of Financial Executives International (“FEI”) and the Financial Reporting Committee (“FRC”) of the Institute of Management Accountants (“IMA”) (“the Committees”) are writing to provide their views on the recent speech by Pamela R. Schlosser, a U.S. Securities & Exchange Commission (“SEC”) Professional Accounting Fellow, regarding valuing customer relationship intangibles1. Specifically, we wish to provide further information regarding the applicability of a marketplace participants approach under existing GAAP. Both Committees were very involved in the Financial Accounting Standards Board’s (“FASB” or the “Board”) due process leading up to issuance of FAS 141 and 142 as well as subsequent discussions with members of the Board and Staff, which provides us with a perspective on this issue that may be helpful to the SEC Staff in giving this matter further consideration.

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