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FEI/IMA letter - Issues on FAS #141 (R) - Business Combinations and FAS #160 - Non-Controlling Interests in Consolidated Financial Statements - an amendment of ARB No. #51

Monday, October 6, 2008

The Committee on Corporate Reporting (“CCR”) of Financial Executives International (“FEI”) and the Financial Reporting Committee (the “FRC”) of the Institute of Management Accountants (“IMA”) would like to make the Board aware of certain implementation issues we are encountering related to the adoption of FASB Statement No. 141(R), Business Combinations (“SFAS 141(R)”), and FASB Statement No. 160, Non-Controlling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”). We observe that issuance of these standards has introduced conflicts in the accounting literature that could result in diversity in practice if clarity is not provided as to how those conflicts should be resolved. In the spirit of adapting to a principles-based approach to accounting and financial reporting, our members are prepared to address these interpretive matters through discussions with our auditors provided other key stakeholders are willing to accept differences in conclusions that may be reached on each issue. In contrast, we also are concerned that issues that have arisen with the new accounting model for contingencies introduced in FAS 141(R) have raised operationality issues that warrant amendments being made. We believe that the Financial Accounting Standards Board should consider deferring the effective dates of those provisions of the standard until the underlying issues can be fully vetted with practitioners and an amendment can be developed to address these concerns.

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