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Deloitte Haskins+Sells In this issue: · 1 Accounting & Reporting 2 The Washington Scene 5 Management 6 Taxes 7 PersonalBusiness Thoughts 'i e6l 14 July 8 1985 SEC sets additional disclosure requirements for "repurchase" and 're~/erse repurchase" agreements New capital rules for government securities dealers; "One share/one vote" proposal introduced in Senate; FDIC to permit direct real estate and insurance activites by banks; Top earners pay greater share of income taxes Outside directors'pay continues upward trend; Former NYSE .head discusses leadership Employers electing no withholding on fringe benefits must notify employees by Aug. 1; IRS will rule on property transfers to foreign affiliates Exporting ideas for small businesses Accounting & Reporting ! I I I I I I I I SEC proposes more disclosures for "repos" and "reverse repos" The SEC has issued proposed new rules that would require additional disclosure of the nature and extent of a registrant's asset repurchase and reverse repurchase transactions, and the degree of risk involved in these transactions. The proposal would call for: · Separate balance sheet classification and footnote disclosure when either the aggregate carrying amount of assets sold under agreement to repurchase, or assets purchased under agreement to resell, exceed 10% of total assets · When the risk of loss from these transactions (as defined) exceeds 5% of stockholders' equity, disclosure of certain information, including the names of the parties to the agreements. The SEC has also initiated a project to consider the need for addi- tional rulemaking or other guidance concerning these transactions as well as other types of financial transactions and instruments that may need to be addressed (e.g., interest rate swaps, securitized assets, and sales of assets with "put" arrangements). Finally, the Commission determined that there are broad-based account- ing measurement and recognition issues involved in these transactions that may be best addressed by the FASB. It authorized the Chief Accountant to send a letter to the FASB recommending that the Board add a project to its agenda to deal with the accounting issues involved in the broad area of financial assets and transactions.