July 1, 2016 – June 30, 2017
Through your efforts, you have enhanced your association, and when reflecting on the past fiscal year, you can be proud of the many initiatives we have set in motion.
- 23 Technical Committee meetings planned and executed
- 18 Comment letters filed
- 10 In-person conferences/courses/events held
- 103 Webinars presented
- 16 Research reports published by FERF
And this doesn’t take into account the excellent professional development and networking events at FEI Chapters across the country and in Japan. Together as one FEI there is a great deal of success to celebrate.
FEI’s Technical Activities team led the association’s advocacy efforts during fiscal year 2017, offering technical advice, commentary and policy recommendations on legislation, regulatory proposals and accounting standard updates.
In July, 2016, FEI’s Committee on Taxation (COT) joined with our Committee on Corporate Reporting (CCR) to provide insight on a U.S. Treasury Department proposal to amend the treatment of debt vs. equity for many U.S. companies under Section 385 of the Internal Revenue Code with a number of the COT/CCR recommendations having been included in the final rule. In September, 2016, COT and CCR once again joined forces to provide the Financial Accounting Standards Board (FASB) with feedback on a proposal to amend the Income Tax Disclosure accounting standard. In another joint effort in April, 2017, COT and CCR submitted a letter to FASB requesting they undertake informal efforts to examine the accounting implications of fundamental tax reform proposals currently being considered in Congress so that preparers have as much clarity as possible.
With tax reform a top priority of both Congress and the White House during the past fiscal year, COT provided a set of pro-growth principles on tax reform to the House Ways & Means Committee, Senate Finance Committee and The National Economic Council at the White House. FEI’s Committee on Private Companies Policy (CPC-P) was also actively engaged on tax reform. In April, 2017, the CPC-P held a Washington, D.C. Fly-In where FEI private company members met with key members and staff of House Ways & Means Committee and Office of the Speaker.
FEI was active on other public policy issues as well. In April, 2017, the Committee on Government Business (CGB) and FEI Board Chair John Panetta testified before the House Armed Services Committee’s Subcommittee on Oversight & Investigations to provide CGB members’ perspectives on issues related to the Defense Contract Auditing Agency (DCAA). Also in April five FEI private company members participated in the Treasury Department’s Roundtable on Access to Capital for Middle-Market Companies. As a follow up to the roundtable meeting, FEI signed a joint letter along with the Chamber of Commerce and the Association of Finance Professionals to emphasizing the impact of government regulation on the ability of middle market companies to access financing. In April, 2017, FEI’s Committee on Benefits Finance (CBF) joined 12 other trade associations and companies in a letter to members of Congress urging their support for legislation (H.R. 1962/S. 852) to amend nondiscrimination provisions of the Internal Revenue Code to protect older, longer service participants in employer-sponsored benefit plans.
FEI’s Committee on Finance and IT (CFIT) led a working group which also included CCR and Committee on Governance, Risk & Compliance (CGRC) members to review and provide comment on the June 2016, Committee of Sponsoring Organizations of the Treadway Commission (COSO), Enterprise Risk Management (ERM), Aligning Risk with Strategy and Performance public exposure draft. The group was generally supportive of the update and included five specific comments and observations for consideration. Additionally, CFIT collaborated with FEI in planning content for the 2017 Future of Finance Technology Conference held on June 15 in Minneapolis.
The Coalition for Effective and Efficient Tax Administration’s (CEETA), an FEI-administered coalition of organizations working to improve IRS exams and audits, efforts were rewarded when legislation, The Preserving Taxpayers’ Rights Act, was introduced in the House of Representatives in July, 2017. The bill is supported by both Republicans and Democrats in Congress and CEETA will work with key legislators to support its enactment in FY2018.
Click on the tabs below to learn more about highights from the past year.
INFORMATION
In the past year we launched a redesigned FEI website, and a new Chapter Support Program, and we are currently providing administrative services for three Chapters.
We created a Professional and Staffing Services Program – a partnership with Robert Half that connects FEI members and their companies with Robert Half offices in local markets to assist member’s companies with the search process and help find the best talent for your organization’s needs.
We partnered with Lincoln Financial and Alliant Insurance to develop FEI's Employee Benefits Program – which offers premium savings, plan design flexibility, contract enhancements, and national account service levels, and works through your existing broker if you desire.
FEI’s Corporate Membership Program was redesigned with a tiered pricing and discount structure and the ability for organizations to offer membership and FEI engagement opportunities to ‘pre-eligible’ staff members.
We responded to your requests for a deeper-dive into professional development for technical skills and presented the Developing SEC Reporting and Filing Competencies Course - a two-day workshop that provides practicing financial professionals with the expertise and knowledge they need to excel in their roles as a preparers or reviewers of corporate filings. We teamed with TriCorporation to launch an intensive new experiential leadership immersion and simulation course, Financial Leadership & Decision Making Amid Complexity. Delivered in an action-packed, team style across 3-1/2 days, the course is designed to build cross-functional, dynamic financial leaders.
We heard you, and developed two online and on-demand courses. FEI’s Leadership Master Class is the first story-based learning program designed for financial executives, covering the leadership skills executives need to succeed in the C-suite. StoryPathing™ for Professional Leadership Development is a narrative and identity development program for professionals who want to take charge of life, define the kind of person you want to be, how you want to approach life, how you want to be seen by others, and what kind of values and beliefs you hold.
INTEGRITY
In celebration of the profession FEI developed and hosted its inaugural Financial Executive of the Year Awards and Ceremony, in conjunction with our annual Financial Leadership Summit. This nation-wide awards program recognized five peer-nominated individuals who made considerable impact within their companies or organizations.
FEI partnered with the SEC Professionals Group on a special initiative to broaden exchanges around financial reporting processes. The direct relationship between the two organizations afforded FEI the opportunity to offer qualified SEC Professional members a chance to join complimentary for one-year.
Began exploration of consolidation of the FEI/FERF governance structures.
INFLUENCE
Our Technical Activities team is actively monitoring Internal Revenue Service and U.S. Treasury Department regulations under section 385, and expressing the views of preparers. The regulations in question address whether to treat certain related party financing arrangements as debt vs equity, and will significantly member companies from a tax planning, treasury management and related party financing perspective.
FEI’s Committee on Taxation (COT) and Committee on Corporate Reporting (CCR) jointly submitted a comment letter on the Financial Accounting Standards Board’s (FASB) request for comments on a proposal to amend the Income Tax Disclosure accounting standard. The comment letter, drafted by a joint working group of COT and CCR members, commended FASB for seeking to improve the information required by the standard but noted that while the proposals may provide some increase in decision-useful information about income taxes, the proposed changes to the standard could result in disclosure overload and create more confusion than decision-useful information, given that income taxes are already subject to extensive disclosure requirements.
FEI's CCR submitted a comment letter that focused on the U.S. Securities and Exchange Commission’s (SEC) initiatives to improve disclosures for the benefit of investors and public companies while also recommending that the SEC to focus its efforts in three key areas: Principles-based Framework; Material Information; and Flexibility. CCR also expressed its support of the SEC’s efforts to amend certain disclosure rules that have become redundant, duplicative, overlapping, outdated, or superseded. CCR noted that they agree that these amendments will better facilitate the disclosure of material and useful information to investors, without diminishing the value or utility of the current information we provide investors.
The SEC’s Investor Advisory Committee held its quarterly meeting which included a panel on disclosure effectiveness and the SEC’s recent FAST Act report. Erik Bradbury, FEI Professional Accounting Fellow, participated as FEI’s representative and shared views on disclosure effectiveness broadly while highlighting CCR’s two recent comment letters to the SEC on its request for comment on the Business and Financial Disclosures required by Regulation S-K, as well as the Disclosure Update and Simplification proposal.
In March, 2017 FEI's CCR submitted a letter to the SEC regarding the Commission’s Conflict Minerals Rule Implementation. CCR expressed support for the SEC’s suggestion that additional guidance on the rule may be needed and maintained that it has concerns about the suitability of the Conflict Minerals Rule for securities filings and questioned its effectiveness in fighting the underlying violence associated with conflict minerals.
CCR submitted a letter to the SEC in support of its efforts to improve the functionality and use of XBRL (eXtensible Business Reporting Language). At the appropriate time, making a change to accept Inline XBRL tagged filings should be considered given its ease of use, readability and consistency between the HTML (HyperText Markup Language) and XBRL documents. However, cautioned the SEC that there are certain transition issues associated with requiring Inline XBRL filings of tagged data at this time
Proposed Accounting Standards Updates (Updates), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost and; Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) Changes to the Disclosure Requirements for Defined Benefit Plans - In their comment letter, FEI's CCR and Committee on Benefits Finance (CBF) members’ views were mixed on the proposed requirement related to the allocation and presentation of retirement benefits on the face of the income statement. Members were supportive of the second proposal which identified disclosures to remove. They expressed concern on the proposed additional disclosure requirements, for quantitative and qualitative fair value information as this information is viewed as redundant since it is already presented in individual plan asset financial statement disclosures. COT and CCR did offer suggestions on how the proposed changes could be improved.
While expressing broad support for the FASB’s efforts to improve hedge accounting, CCR asked for the FASB via comment letter on November 29, 2016 to take on a secondary phase (Phase 2) for hedging intended to further address corporate risk management strategies used by corporate risk managers to better align the GAAP standards with actual practice. In the letter, CCR also provided specific examples and recommendations for the FASB to consider as it moves forward with this project. The FASB has recently issued the proposed accounting standards update for this project, and requests FEI to follow up once the final standard is issued to discuss a potential phase 2.
On December 16, Erik Bradbury, FEI Professional Accounting Fellow, participated in a FASB roundtable to discuss the FASB future agenda and CCR’s recent comment letter on the FASB’s agenda consultation. During this meeting, Erik shared the general preparer view that the FASB should not pursue a major overhaul of any existing standards, instead favoring a limited number of future projects that will ease the financial reporting burden of companies during this time of unprecedented change.
In March, 2017 FEI’s CCR submitted a comment letter on FASB’s Disclosure Framework – Inventory project. In its letter, CCR pointed out the increased burden this proposed update would place on preparers, maintaining that many of the proposed changes do not provide incremental value to investors, and place undue burden on the preparer. CCR is actively monitoring this project, and will continue to express the views of preparers.
Given major changes being discussed around tax reform in Washington, and with various proposals on the table from congress and the administration CCR and COT submitted a formal request to the FASB on April 27, 2017 requesting that they undertake informal efforts to examine the accounting implications of fundamental tax reform proposals. The financial reporting implications of these potential changes, and any potential standard setting implications they may have, will be an important part of the public dialogue and feedback to legislators on the viability of these proposals. It is therefore important to our members to have as much clarity as possible regarding the accounting before any new tax model is enacted. CCR is actively monitoring this issue, and revisited the matter with the FASB at the June CCR meeting, and will continue to express the views of preparers.
FEI’s Committee on Private Companies Policy (CPC-P) held a Washington, D.C. Fly-In on April 5, 2017. Participants met with key members and staff of House Ways & Means Committee and Office of the Speaker and provided input on how tax reform can benefit private companies. CPC-P is also providing guidance to Ways & Means staff on transition rules and will continue to advocate on behalf of FEI private companies as the legislative process continues.
FEI’s COT has developed a set of pro-growth principles on tax reform to increase competitiveness and foster job creation - competitive corporate tax rates, competitive international tax rules and establishment of territorial tax system, incentive to repatriate foreign earnings, foster technological innovation by retaining the R&D credit, encourage savings and business investment by eliminating the corporate AMT and adopt appropriate transition rules to help businesses incorporate changes to tax law. Principles have been provided to House Ways & Means Committee, Senate Finance Committee and the National Economic Council.
Five FEI private company members participated in the Treasury Department’s Roundtable on Access to Capital for Middle-Market Companies. As a follow up to the roundtable meeting, FEI signed a joint letter along with the Chamber of Commerce and the Association of Finance Professionals to emphasize some of the issues our members made in the roundtable regarding the impact of government regulation on the ability of middle market companies to access financing.
The Coalition for Effective and Efficient Tax Administration (CEETA) submitted a letter to the U.S. Treasury Department suggesting tax- related regulations and guidance that should be repealed.
FEI’s Committee on Government Business (CGB) member and current FEI Board Chair John Panetta testified before the House Armed Services Committee’s Subcommittee on Oversight & Investigations to provide CGB members’ perspectives on issues related to the Defense Contract Auditing Agency (DCAA).
INTERACTION
CFO vs. CEO: Fraud at HealthSouth | October 26 and 27, 2016 | California – FEI, in conjunction with the Sacramento and San Francisco Bay Area Chapters, hosted a professional development event where attendees learned from HealthSouth’s founding CFO, the CFO who exposed the fraud and a former FBI special fraud agent, as they discussed the roots and growth of the HealthSouth fraud, as well as its impact on executives today.
Current Financial Reporting Issues (CFRI) Conference | November 14-15, 2016 | New York City, NY - This preparer-focused conference brought financial executives together from across the country to hear directly from regulators, standard setters and preparers on a variety of pressing issues. Participants received valuable insights from the FASB, SEC and sage advice from senior financial executives leading and moderating our panel discussions. HIGHLIGHTS »
Financial Leadership Summit | April 23-25, 2017 | Anaheim, CA - FEI’s annual Financial Leadership Summit offered senior financial executives extensive personal and professional networking opportunities, and content-rich programming in an enjoyable atmosphere. The agenda focused on innovation management and connectivity and featured content tailored to the needs of public and private company executives. Key topics included blockchain, connectional intelligence, organizational change, cybersecurity, business disruption, managing mergers and acquisitions, and the growth of financial technology (FinTech). HIGHLIGHTS »
Future of Financial Technology | June 15, 2017 | Minneapolis, MN - This conference provided CFOs, controllers, corporate treasurers and others leaders in financial technology the opportunity to determine how to use existing and forthcoming technologies to streamline business functions, understand the impact of these technologies on finance and gain insight into audit innovation.
Conference sessions explored Gartner’s top 10 strategic technology trends, collaborative work management, understanding blockchain, agile planning and analytics for finance, artificial intelligence and finance in the age of machine learning. HIGHLIGHTS »
2017 Accounting Change for Financial Leaders Conference | June 27-28, 2017 | Philadelphia, PA - The conference addressed new accounting standards such as leases and revenue recognition, and financial instrument updates on both derivatives and hedging, and classification and measurement. Sessions were led by regulatory and industry leaders, and are designed to prepare financial executives to meet new regulatory requirements. HIGHLIGHTS »