Financial Accounting Standards Board: Accounting support fee; review,

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Federal Register: August 7, 2003 (Volume 68, Number 152)NoticesPage 47110From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr07au03-104

SECURITIES AND EXCHANGE COMMISSION

Securities Act of 1933 Release No. 8263/August 1, 2003 and Securities Exchange Act of 1934 Release No. 48277/August 1, 2003Order Regarding Review of FASB Accounting Support Fee Under Section 109 of the Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 (the ``Act'') establishes criteria that must be met in order for the accounting standards established by an accounting standard-setting body to be recognized as ``generally accepted'' for purposes of the federal securities laws. Section 109 of the Act provides that all of the budget of an accounting standard- setting body satisfying these criteria shall be payable from an annual accounting support fee assessed and collected against each issuer, as may be necessary or appropriate to pay for the budget and provide for the expenses of the standard setting body, and to provide for an independent, stable source of funding, subject to review by the Commission. Under Section 109(f), the annual accounting support fee shall not exceed the amount of the standard setter's ``recoverable budget expenses.'' Section 109(h) amends Section 13(b)(2) of the Securities Exchange Act of 1934 to require issuers to pay the allocable share of a reasonable annual accounting support fee or fees, determined in accordance with Section 109 of the Act.

On April 25, 2003, the Commission issued a policy statement concluding that the Financial Accounting Standards Board (``FASB'') and its parent organization, the Financial Accounting Foundation (``FAF''), 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'' under section 108 of the Act.\1\ As a consequence of that recognition, the Commission undertook a review of the FASB's proposed accounting support fee for calendar year 2003. In connection with its review, the Commission also reviewed the proposed budget for the FAF and the FASB for calendar year 2003.

\1\ Financial Reporting Release No. 70.

Section 109 of the Act also provides that the standard setting body can have additional sources of revenue for its activities, such as earnings from sales of publications, provided that each additional source of revenue shall not jeopardize the actual or perceived independence of the standard setter. In this regard, the Commission also considered the interrelation of the operating budgets of the FAF, the FASB and the Government Accounting Standards Board (``GASB''), the FASB's sister organization, which sets accounting standards to be used by state and local government entities. The Commission has been advised by the FAF that neither the FAF, the FASB nor the GASB will accept contributions from the accounting profession.

After its review, the Commission determined that the 2003 annual accounting support fee for the FASB is consistent with section 109 of the Act. Accordingly,

It is ordered that the FASB may act in accordance with this determination of the Commission.

By the Commission. Margaret H. McFarland, Deputy Secretary.

FR Doc. 03-20133 Filed 8-6-03; 8:45 amBILLING CODE 8010-01-P

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