Health care reform: Private Insurers paying for federal lobbying

A recent article written by Zenei Cortez at the California Progress Report looks at how the current finances in the health care industry are being geared towards federal lobbying. In fact, the article state that the nation's top 13 private health insurers and their trade group, America's Health Insurance Plans (AHIP) spent nearly $23 million in federal lobbying to tilt reform in their direction. Cortez believes that the insurance industry is spending money that will go on to harm the American public in terms of higher profit for the private insurance companies while affecting the quality of care Americans receive due to the prices of health insurance. Do you agree with this article?

What do you foresee happening to the financial aspects of healthcare reform in terms of both the insured and the healthcare companies?

Adopting IFRS Key to global financial success

According to the Associated Press, federal regulators stated Monday that it's critical for the United States along with other countries to adopt one international accounting standard. By all countries having the same policies, we would better avoid another economic crisis. Both those on Wall Street and in the Accounting industry agree with this statement. US companies have the option to begin adopting the new accounting standards next year. Read the full article here.

Name Change for FAS 157

The Wall Street Journal Blog recently wrote about the name change for FAS 157. It will now be known as Topic 820. This rule currently requires companies mark their assets to market every quarter. With the old rule, the assets were held at cost. Read more about the name and rule change here.

Controlling your risk when converting to IFRS

The Journal Of Accountancy recently published a post that looks at how companies can take precautions when it comes to converting from GAAP to IFRS. One of the key areas that will be affected during the conversion will be IT, as many of the systems will be changing due to the new accounting methods. Read the full article here.

FASB's changes on disclosing private information

According to CFO, there is debate as to how companies are handling lawsuits and their accounting rules and disclosures. Under the new rules of FASB, companies would not have to disclose any information that they feel is prejudicial or confidential. This would include not disclosing any information about the money they pay to investors to settle disagreements.

Last September, when the board decided companies would have at least another year before having to comply with the new rules, it agreed to collect more feedback by asking companies to do sample runs of its first proposal and the alternative version currently being crafted. However, only a few companies have shown interest in participating.

Read the full article here.

Adopting IFRS slowing

In an article recently at Reuters India, they look at how the current global economy is just one of the latest factors holding up the adoption of IFRS globally. Due to the credit crisis, many countries have seen the need to adopt a more consistent and transparent accounting system. However, with the US failing to provide a date as to when they'll be adopting the system. The G20 Finance ministers are meeting in London next month, which many hope will be the key to getting the adoptoin of IFRS on track. Read the full article here.

Fair market value rules may expand

According to Bloomberg, last week, FASB decided to consider expanding fair market value rules. Accountants could end up expanding mark-to-market across all financial assets. Read the full article here.

Tweedie encourages US to join IFRS

At WebCPA, they divulge that Sir David Tweedie has encouraged the United States to come up with an adoption plan for IFRS. Although Tweeide has and FASB Chairman Bob Hertz have worked closely together to weave US GAAP into IFRS, the new leader of the SEC, Mary Schapiro has not said whether or not she has approved of the latest model of the roadmap to adoption.

During the American Accounting Association's annual accounting meeting, Tweedie stated: "This is a very interesting moment for us, a once-in-a-lifetime moment. Where is the USA? That is a question I am asked all around the world. The convergence program is designed to reduce the cost of transition. FASB is riding two horses: U.S. GAAP and trying to converge at the same time, but so are we. We get a lot of criticism over the favored-nation status toward the United States. The European Federation of Accountancy Bodies has just talked about how the point has been reached where there have been diminishing returns from convergence with U.S. GAAP, particularly as more and more countries, including major economies such as Japan and India, move toward direct adoption of full IFRS, and the IASB should change its strategy and concentrate exclusively on major improvements and simplifications of IFRS for the short term. We think that’s wrong. If you’re going to have global standards, we need the U.S., but it can’t go on indefinitely. We’ve been converging for seven years. We have a timetable to finish in 2011. It’s designed to fit these major economies — Korea, Canada, Japan, India — who are converging that year. We have to finish this year.”

Read the full write up here.

CPAs knowledge in IFRS and GAAP

The IFRS blog recently asked if your CPA was bilingual. Although the United States has not yet fully committed to adopting IFRS, many other countries throughout the world have begun to take the steps to adopt this new worldwide accounting system. EM sees a new state of accounting in 2012, that where either the US has adopted IFRS or an accounting world where IFRS and GAAP coexist. So, he believes CPAs should begin now learning how to account in both systems. Many accounting classes throughout colleges have already begun to integrate this new system. What do you think? Even though it's not clear if accounting will be in the IFRS system by 2012, should CPAs begin acquainting themselves now? If you are a CPA, what's your stance?

Tenent Healthcare Corp improves returns

According to Fierce Healthcare, Tenent Healthcare Corporation has posted better returns than previously expected for the second quarter. By holding down costs, offsetting growing bad debts, and lowering patient volumes they managed to push revenue up 4.5% and improve their free cash flow.

Current financial crisis not caused by change in accounting rules

According to the AP, The Financial Crisis Advisory Group has stated that changes in accounting rules did not cause the most recent credit crisis. They did state that there are weaknesses in the application rules that may reduce the credibility in the financial reporting. To see all of their current views, please read the article here.

Tata Motors profits rise after change in accounting rules

According to Bloomberg, Tata Motors, who won Jaguar and Land Rover, saw an increase in profit after the Indian government changed accounting rules. They allowed companies to alter provsions for mark-to-market losses in foreign currency loans. This resulted in a profit rise of 58%. Read more here.

Bank of America has new Chief Accounting Officer

Yesterday, Neil Cotty was named the new Chief Accounting Officer at Bank of America. His previous position was chief financial officer at a global wealth and investment management firm. Read more about their new selection here.

Fare Value Accounting affected by current market situation

According to an article at BizTimes, the current state of the marketplace has damaged the effectiveness of Fair Value Accounting, otherwise known as market-to-market accounting. This rule calls for companies to reflect the current market value of their assets of the balance sheets.

P. J. Patel, CFA, senior vice president of Valuation Research Corp, who conducted the study stated, "Respondents to this survey came down hard on Fair Value Accounting. While in less volatile times, Fair Value Accounting has improved transparency, in unusual times like we've seen, FVA becomes more difficult to implement and understand.”

Read the full story here.

Germans loosen accounting rules

According to Forbes, German banks responded well to the news that the government would recend an accounting rule to help banks boost spending in the current economy. This ruling will ease up on the capital requirements governing a bank. The rule, created to be helpful in bull markets harms the banks in bear markets. Read what this ruling would do for German banks here.

Types of accounting

At the Chillicious blog, they recently laid out the different types of accounting, which are mainly determined by the different types of firms they serve.

• Private or Industrial Accounting
• Public Accounting
• Governmental Accounting
• Fiduciary Accounting
• National Income Accounting

For an in-depth look at these different types of accounting, read here.

Pharma deals with taxes and working overseas

In a recent blog post at the Wall Street Journal Health Blog, they look at what different Pharma companies are facing when they go abroad to conduct business.

The dispute has to do with something called “earnings stripping,” in which a multinational company reduces its taxes by claiming interest deductions for payments to a related overseas unit. The company claims deductions on its U.S. tax return, but no money ultimately leaves the parent company’s coffers, and publicly reported profit doesn’t change. The WSJ explains the nitty gritty. Glaxo didn’t comment, but in court filings has said the payments were properly classified as tax-deductible interest.

Read the full article here.