[Federal Register Volume 74, Number 163 (Tuesday, August 25, 2009)]
[Rules and Regulations]
[Pages 42772-42773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-20381]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 211, 231, and 241

[Release Nos. 33-9062A; 34-60519A; FR-80A]


Commission Guidance Regarding the Financial Accounting Standards 
Board's Accounting Standards Codification

AGENCY: Securities and Exchange Commission.

ACTION: Interpretation.

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SUMMARY: The Securities and Exchange Commission (the ``Commission'') is 
publishing interpretive guidance regarding the release by the Financial 
Accounting Standards Board (``FASB'') of its FASB Accounting Standards 
Codification\TM\ (``FASB Codification'').

DATES: Effective Date: August 25, 2009.

FOR FURTHER INFORMATION CONTACT: Questions about specific filings 
should be directed to staff members responsible for reviewing the 
documents the registrant files with the Commission. General questions 
about this release should be referred to Jenifer Minke-Girard, Senior 
Associate Chief Accountant, or Jeffrey S. Cohan, Senior Special 
Counsel, Office of the Chief Accountant, at (202) 551-5300, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-6628.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 108 of the Sarbanes-Oxley Act of 2002 \1\ amended Section 
19(b) of the Securities Act of 1933 \2\ to provide that the Commission 
may recognize, as generally accepted for purposes of the securities 
laws, any accounting principles established by a standard setting body 
that meets specified criteria. On April 25, 2003, the Commission issued 
a policy statement concluding that the FASB and its parent 
organization, the Financial Accounting Foundation, satisfied the 
criteria for an accounting standard setting body under the Act, and 
recognizing the FASB's financial accounting and reporting standards as 
``generally accepted'' for purposes of the federal securities laws.\3\
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    \1\ Public Law 107-204, 116 Stat. 745 (2002).
    \2\ 15 U.S.C. 77s(b).
    \3\ See Commission Statement of Policy Reaffirming the Status of 
the FASB as a Designated Private-Sector Standard Setter, Release 
Nos. 33-8221; 34-47743; IC-26028; FR-70 (April 25, 2003) [68 FR 
23333 (May 1, 2003)].
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    On June 30, 2009, the FASB issued FASB Statement of Financial 
Accounting Standards No. 168, The FASB Accounting Standards 
Codification\TM\ and the Hierarchy of Generally Accepted Accounting 
Principles--a replacement of FASB Statement No. 162 (Statement No. 
168), to establish the FASB Codification as the source of authoritative 
non-Commission accounting principles recognized by the FASB to be 
applied by nongovernmental entities in the preparation of financial 
statements in conformity with U.S. generally accepted accounting 
principles (``U.S. GAAP''). Statement No. 168 is effective for 
financial statements issued for interim and annual periods ending after 
September 15, 2009. The FASB Codification reorganizes existing U.S. 
accounting and reporting standards issued by the FASB and other related 
private-sector standard setters, and all guidance contained in the FASB 
Codification carries an equal level of authority.\4\
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    \4\ The FASB Codification is available at http://asc.fasb.org/home.
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    The FASB Codification directly impacts certain of the Commission's 
rules, regulations, releases and staff bulletins (collectively referred 
to in this release as ``Commission's rules and staff guidance''), which 
refer to specific FASB standards or other private sector standard-
setter literature under U.S. GAAP, because such references are now 
superseded by the FASB Codification. The Commission is therefore 
issuing interpretive guidance to avoid confusion on the part of 
issuers, auditors, investors, and other users of financial statements 
and Commission rules and staff guidance.

II. Discussion

    Many parts of the Commission's rules and staff guidance include 
direct references to specific standards under U.S. GAAP. For example, 
Regulation S-X, which, together with the Commission's Financial 
Reporting Releases, sets forth the form and content of and requirements 
for financial statements required to be filed with the Commission,\5\ 
includes specific references to specific standards under U.S. GAAP.\6\ 
In addition, some parts of the Commission's rules and staff guidance 
outside of the financial statement context include specific references 
to specific standards under U.S. GAAP, such as in Item 402 of 
Regulation S-K regarding disclosure of executive compensation.\7\
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    \5\ 17 CFR 210.1-01.
    \6\ See, e.g., Rule 1-02(u) of Regulation S-X [17 CFR 210.1-
02(u)], which defines the term ``related parties'' by reference to 
FASB Statement of Financial Accounting Standards No. 57, Related 
Party Disclosures.
    \7\ 17 CFR 229.402.
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    Given the possible confusion between the Commission's rules and 
staff guidance, on the one hand, and the FASB Codification, on the 
other hand, the Commission believes it is necessary to publish the 
guidance in this release. Concurrent with the effective date of the 
FASB Codification, references in the Commission's rules and staff 
guidance to specific standards under U.S. GAAP should be understood to 
mean the corresponding reference in the FASB Codification. We note that 
the FASB Codification includes a cross-reference finding tool that can 
assist users in identifying where previous accounting literature 
resides in the FASB Codification. The Commission and its staff also 
intend to embark on a longer term rulemaking and updating initiative to 
revise comprehensively specific

[[Page 42773]]

references to specific standards under U.S. GAAP in the Commission's 
rules and staff guidance.
    It should be noted that although the FASB has stated that the FASB 
Codification supersedes existing references in U.S. GAAP, the FASB 
Codification does not supersede Commission rules or regulations. We 
understand that the FASB Codification, as a service to users, includes 
references to some Commission rules and staff guidance. However, the 
FASB Codification is not the authoritative source for such content, nor 
does its inclusion in the FASB Codification affect how such content may 
be updated in the future.

III. Codification Update

    The ``Codification of Financial Reporting Policies'' announced in 
Financial Reporting Release No. 1 (April 15, 1982) [47 FR 21028] is 
updated by adding at the end of Section 101, under the Financial 
Reporting Number (FR-80A) assigned to this interpretive release, the 
text in Sections I and II of this release.
    The Codification is a separate publication of the Commission. It 
will not be published in the Federal Register/Code of Federal 
Regulations.

List of Subjects

17 CFR Part 211

    Reporting and recordkeeping requirements, Securities.

17 CFR Parts 231 and 241

    Securities.

Amendments to the Code of Federal Regulations

0
For the reasons set out in the preamble, the Commission is amending 
title 17, chapter II of the Code of Federal Regulations as set forth 
below:

PART 211--INTERPRETATIONS RELATING TO FINANCIAL REPORTING MATTERS

0
Part 211, Subpart A, is amended by adding Release No. FR-80A and the 
release date of August 18, 2009 to the list of interpretive releases.

PART 231--INTERPRETATIVE RELEASES RELATING TO THE SECURITIES ACT OF 
1933 AND GENERAL RULES AND REGULATIONS THEREUNDER

0
Part 231 is amended by adding Release No. 33-9062A and the release date 
of August 18, 2009 to the list of interpretive releases.

PART 241--INTERPRETATIVE RELEASES RELATING TO THE SECURITIES 
EXCHANGE ACT OF 1934 AND GENERAL RULES AND REGULATIONS THEREUNDER

0
Part 241 is amended by adding Release No. 34-60519A and the release 
date of August 18, 2009 to the list of interpretive releases.

    By the Commission.

    Dated: August 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-20381 Filed 8-24-09; 8:45 am]
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