FASB proposed accounting standard sparks controversy
2nd September 2008
Foundations have been shaken throughout corporate America with the Federal Accounting Standards Board’s (FASB) June 5, 2008 release of an exposure draft proposal entitled Disclosure of Certain Loss Contingencies: An Amendment of FASB Statements No. 5 and 141(R), according to Jon Walker, Director Corporate, Legal and Government Services at Environmental Data Resources.
The proposed accounting standard seeks to modify the rules currently governing loss contingencies, including the disclosure of the costs of ongoing environmental litigation and pending unsettled lawsuits. With the proposed standard set to change the number of loss contingencies that a company must disclose, many corporate giants, including several pharmaceutical companies, have raised strong objections to the amendment.