NewsPractice

FASB Adopts New Rules on Assets, Liabilities

Accounting guidelines that may force U.S. companies to move billions of dollars in assets and debt onto their balance sheets were adopted Wednesday by the Financial Accounting Standards Board.

The rules, spurred by the collapse of Enron Corp., will be published on the accounting board's Web site by Monday, and will take effect for new transactions two weeks after the publication date and in the third quarter for existing entities.

FASB, which sets U.S. accounting standards, has been pressured by lawmakers and regulators to limit off-balance-sheet financing.

“FASB is saying if you have responsibility for assets or debt they should be on your balance sheet,” said Al Hartgraves, accounting professor at the Goizueta Business School at Emory University. “Companies have hundreds of billions of assets and liabilities that should be on balance sheets but are not.”

Bond insurer MBIA Inc. said it may bring about $8.9 billion of assets and liabilities now in off-balance-sheet entities onto its books. Krispy Kreme Doughnuts Inc., 3Com Corp. and Cisco Systems Inc. have all said they'll stop using leasing arrangements with off- balance-sheet entities.

Related Articles

Back to top button
Stay up to date
Don't miss out on the latest industry news and articles
Stay up to date
Don't miss out on the latest industry news and articles
You are Subscribed!
Your subscriptions means a lot to us.
Don't miss out on the latest Industry news
You are Subscribed!