M&A Accounting Standards Revamped

January 11 - Web CPA - The International Accounting Standards Board has issued a revised version of its standards for accounting for business combinations such as mergers and acquisitions, in coordination with the Financial Accounting Standards Board, in a move that will highlight the expenses of business combinations that used to be considered assets.

While FASB has not yet issued its own revised standards, they're expected to closely resemble the new ones released by the IASB. The two boards are working together on a convergence process that will ultimately unite International Financial Reporting Standards with U.S. generally accepted accounting principles.

"Investors and their advisers have a difficult enough job assessing how the activities of the acquirer and its acquired business will combine," said IASB Chairman Sir David Tweedie in a statement. "But comparing financial statements is more difficult when acquirers are accounting for acquisitions in different ways, whether those differences are a consequence of differences between U.S. GAAP and IFRS, or because IFRS or U.S. GAAP are not being applied on a consistent basis." Read More.

Economic forecast: A year of volatility

January 5 - The Kansas City Star - Our experts predict a volatile year as the economy flirts with recession, banks scramble for capital and the Federal Reserve tries to pump confidence back into credit markets.

In a recent discussion, they talked about the Fed’s tightrope walk of fighting recession without feeding inflation. They weighed potential changes in the capital gains tax, parsed the impact of a weak U.S. dollar, measured prospects of foreign stock markets and mentioned a few favorite stock plays. Read More.

FASB issues new M&A accounting standard

December 4 - Reuters - The Financial Accounting Standards Board, which sets U.S. accounting rules, issued new rules for accounting for business combinations on Tuesday.

The rules, known as FAS 141 and FAS 160, are intended to simplify and converge with international rules on how companies account for mergers, acquisitions, noncontrolling interests and other business combinations in financial statements.

The rules take effect for fiscal years beginning after Dec. 15, 2008, FASB said.

It is the first major joint project that the FASB conducted with its international counterparts at the International Accounting Standards Board. Read More.

Dollar Near Record Low Versus Euro Before Bernanke's Testimony

September 20 - Bloomberg - The dollar traded near a record low against the euro on speculation Federal Reserve Chairman Ben S. Bernanke will signal a U.S. housing slump threatens to slow economic growth in congressional testimony today.

The U.S. dollar fell against 15 of the 16 most-active currencies as traders bet the central bank will cut its benchmark interest rate further after the first reduction since June 2003 on Sept. 18. The currency dropped to the lowest in nine years against the Indian rupee and a six-week low against the Australian dollar.

"We're going to see a continuation of U.S. dollar weakness,'' said Greg Gibbs, a strategist at ABN Amro Holding NV in Sydney. "Bernanke will talk about the housing market and how that could flow through to the rest of the economy. The possibility of more U.S. rate cuts is completely open.'' Read More.

Dutch finance ministry publishes proposals aimed at sharpening M&A laws - UPDATE

September 14 - Forbes - The Dutch Finance Ministry has published proposals to sharpen regulations around company takeovers to provide greater transparency about the bonuses paid to company directors and the consequences for employees, while also implementing stricter time frames.

The legislation will also serve to implement the Dutch government's response to the EU Takeover Directive, obligating a company that takes a 30 pct stake or more of another company to make a mandatory offer for all of the company's outstanding shares at a fair price.

Greater supervisory powers will also be granted to the Dutch stock markets regulator AFM, which will in future be required to assess a company's offer documentation. Read More.

Credit crunch: Blackstone smells opportunity

President Tony James says the private equity firm has an eye on debt that has been oversold in the market.

August 13 - CNNMoney.com - The debt markets may be creating trouble for some leveraged buyout deals, but private equity titan Blackstone is sniffing out opportunities.

The private equity firm is keeping an eye on the debt of buyout deals that have come under financing pressure, Blackstone President and Chief Operating Officer Tony James said Monday.

"We're starting to look directly at debt securities that are trading at distressed levels" but which aren't distressed at all, he told analysts. Read More.

Seven Questions: Steve Forbes Loves Private Equity

August 12 - Foreign Policy - Many in the U.S. Congress complain that Wall Street’s new titans aren’t paying their fair share of taxes. But Steve Forbes, editor in chief of Forbes magazine, warns that a proposed new tax on private-equity managers would only weaken the U.S. economy, punish entrepreneurs for taking risks, and hurt ordinary retirees. Read Q&A.

Energy Bill Raises Hopes

Cleantech investors hailed on Monday the passage of a long-awaited energy bill in the U.S. House of Representatives as a step toward a more cohesive national energy policy, even as they lamented what it left out.

Among the more striking provisions of the bill is a national renewable energy standard requiring utilities to generate 15 percent of their electricity from renewable energy sources by 2020. But the legislation, which passed in a 241-172 vote Saturday just before the summer recess, fell short of calling for an increase in fuel economy. Those and other results drew mixed reactions from venture capitalists and other investors who closely monitor the cleantech sector.

“There’s a real need for us to rethink how we use personal transportation,” said Peter Grubstein, managing member at NGEN Partners. “Changing the CAFÉ [Corporate Average Fuel Economy] standard would have been a push to both producers and consumers.” Mr. Grubstein also expressed disappointment the bill didn’t mandate a carbon cap-and-trade system. Read More.

Industry Groups Warn Against Tax Hike

July 31 - Associated Press - Private equity, hedge fund and real estate executives warned senators on Tuesday that raising taxes on their firms would harm a wide range of companies that benefit from their investments, including developers in poor urban areas.

Congress is debating whether to force companies set up as limited partnerships _ and their managers _ to pay taxes at the same rate as income earned by ordinary Americans. Proposed legislation would raise taxes from 15 percent to as much as 35 percent for profits earned by private equity and hedge funds, and fees paid to their managers.

Though private equity groups and hedge funds could be tempting targets for lawmakers looking to pay for new federal programs, the industry has been lobbying aggressively against the tax hike and key senators appear to be heeding their concerns. Read More.