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NORWALK, CONN. -- The ink is barely dry on the exposure draft, but some are already hailing the arrival of a new Financial Accounting Standards Board statement on consolidated financial statements.
Broad in scope, the proposed standard would apply to publicly held corporations as well as not-for-profit organizations.
"I think this statement is a good move," said Patty Hlavinka, policy analyst for the Healthcare Financial Management Association. "It's a good attempt to establish consistency between for-profits and not-for-profits."
Among the industries expected to be most concerned by the new rule are financial institutions, telecommunications companies and other businesses involved in the current flurry of mergers and acquisitions. Among the entities most curious about the effects of new rules are not-for-profit hospitals, an increasing number of which are being bought up by for-profit corporations.
The proposed statement, which has been under construction at the FASB since 1982, attempts to get at the root of consolidation. That root, says FASB, is not an arbitrary percentage. Rather,...