Loss Contingency – Disclosure Demystified Best Practices for Managing Litigation Disclosure, SEC Review and FASB Topic 450
Reporting litigation loss contingencies continues to be an evolving, controversial and challenging area for many public companies and their financial executives, auditors, and legal advisors. Starting in 2008, the Financial Accounting Standards Board (FASB) made a series of proposals to amend rules in Topic 450 Statement on Loss Contingency Disclosures, formerly Statement of Financial Accounting Standards No. 5 (FAS 5), in ways that would require publicly traded companies to make more extensive disclosure than historically required. In the wake of hundreds of comment letters on FASB’s latest 2010 iteration of the proposed amendments, FASB deferred further action until December 2011. Meanwhile, however, the SEC has ramped up review and comment on public company reporting of litigation loss contingencies.
The FASB’s proposed changes to Topic 450, coupled with increased SEC scrutiny, has led many companies to re-examine their processes, procedures, and disclosure of litigation loss contingencies in their annual and quarterly filings. Finance executives as well as auditing and legal professionals need to understand this important and evolving landscape. Key issues include changes in how corporate auditors and legal counsel interact, protection of privileged communications, potential impacts on the ABA Treaty, and managing an array of corporate risks and challenges of more detailed litigation loss contingency reporting and disclosure.
The Knowledge Group has assembled a panel of key thought leaders and regulators to help financial and tax executives, auditors, and lawyers understand all the important issues with respect to this evolving topic. This live webcast is a must attend for all corporate financial and tax executives, as well as other accounting, auditing and legal professionals who need to be in the know and prepared to manage the challenges of more extensive loss contingency reporting.
Salome J. Tinker, CPA, Director, Accounting & Financial Reporting,
Association for Financial Professionals
- Background on the Accounting for Loss Contingencies under ASC 450; and
- Comparison of the previous accounting guidance to the new guidance
- Comparison of the previous disclosure guidance to the new guidance
Pamela S. Palmer, Partner,
Latham & Watkins LLP
- The amended disclosure threshold requires disclosure of “remote” loss contingencies with a “potentially severe impact” – will this standard significantly expand loss contingencies that must be disclosed?
- Will disclosure of the likelihood, potential magnitude, and potential timing associated with a loss contingency potentially impact the outcome of the contingency?
- Will the new standard require the disclosure of prejudicial or confidential information?
- Will the new disclosure standard impact the former Topic 450’s protections against waiver of the attorney-client privilege?
John R. Formica, Jr., Partner, National Professional Services Group,
- SEC views on this topic and its activities to date
- Relevance of the ABA treaty
- How and what the FASB has contemplated intersects with the related IASB’s project.
Thomas W. White, Partner,
- Key issues in counseling clients on contingency issues
- Applicability of ASC 450 to government investigations
- Lawyers’ communications with auditors about contingencies
Who Should Attend:
- Directors of Corporate Development
- M&A Specialists and others involved in the development of their company’s M&A strategy
- Senior Financial Professionals
- Business Valuation Specialists
Salome J. Tinker is the Director of Accounting and Financial Reporting for the Association for Financial Professionals. She serves as a subject matter expert where she works closely with AFP’s Financial Accounting and Investment Relations taskforce of their Government Relations Committee and has authored articles that focused on US GAAP convergence with IFRS. She has helped to develop comment letters to both the FASB and the IASB on issues deemed relevant to AFP members such as fair value measurement, impairment, leasing, and pension accounting.
Prior to joining AFP, Ms. Tinker was a Senior Manager of Accounting Policy at Fannie Mae where she wrote corporate policy and closely monitored accounting standard setters’ rule making. Ms Tinker has also been a Supervisory Financial Analyst with the Board of Governors of the Federal Reserve in their Accounting Policy and Regulatory Reporting group and an auditor with the public accounting firm of Deloitte and Touche. She retired from the US Army after 21 years of combined active and reserve service.
Ms. Tinker is a member of the American Institute for Certified Public Accountants (AICPA) and serves on their task force member for the IFRS Accounting Guide Project. She serves on the Board for the Southern Maryland Chapter of the Maryland Society for Certified Public Accountants. Salome is also actively involved in several local civic and charitable organizations.
Salome J. Tinker is the Director of Accounting and Financial Reporting for the Association for Financial Professionals. She serves as …
Pamela Palmer is a litigation partner in the Los Angeles and Orange County offices of Latham & Watkins. Ms. Palmer specializes in defending companies, officers and directors and audit firms in securities disputes, class actions, derivative suits, business judgment and fiduciary claims, M&A litigation, SEC matters and corporate investigations. She also counsels clients regarding privilege, corporate governance, and ethics.
Ms. Palmer was named as a leading securities litigation attorney in the US Legal 500 Litigation Guide 2007 and as one of the Daily Journal’s top 100 women litigators in California in 2009. She was also named to the list of Southern California “Super Lawyers” by Los Angeles magazine every year since 2005. Ms. Palmer has lectured and published for a variety of organizations, including the American Bar Association, the Center for Professional Education, ALI-ABA, the Association of Corporate Counsel (ACC), Wall Street Lawyer and other conferences.
Ms. Palmer is Co-Chair of the Derivative Suits Committee of the American Bar Association’s Class Actions & Derivative Suits Committee and an active member of the Forum for Corporate Directors in Orange County. She serves on Latham & Watkins’ Ethics Committee. Prior to private practice, she clerked on the Ninth Circuit Court of Appeal.
Pamela Palmer is a litigation partner in the Los Angeles and Orange County offices of Latham & Watkins. Ms. Palmer …
John R. Formica, Jr. is a partner with the National Professional Services Group of PricewaterhouseCoopers located in Florham Park, NJ. He is a leader in the Firm’s thought-leadership efforts in the loss contingencies area. John has closely followed the FASB’s deliberations on its loss contingency disclosure project and the IASB’s recent deliberations on the accounting for loss contingencies. Previously, John spent more than 25 years serving public and large private manufacturing companies as an audit partner in the Hartford, CT office. John is a graduate of Providence College, with a BS in Accounting. He is a Certified Public Accountant and is licensed to practice in ten states. John is a member of the American Institute of Certified Public Accountants, and the Connecticut Society of Certified Public Accountants. He is on the Board of Directors of The Connecticut Forum, serving as its Treasurer, and the National Multiple Sclerosis Society – Connecticut Chapter.
John R. Formica, Jr. is a partner with the National Professional Services Group of PricewaterhouseCoopers located in Florham Park, NJ. …
Thomas White is a partner in the Corporate and Bankruptcy and Financial Restructuring Practice Groups and a member of the Dodd-Frank Whistleblower Working Group. He joined the firm in 1979. Mr. White has practiced corporate and bankruptcy law at the firm since 1983. He is one of the firm’s leading practitioners in the area of corporate governance, and also has extensive experience representing corporate and institutional clients in complex business transactions. Mr. White also serves as General Counsel of WilmerHale.
Since passage of the Sarbanes-Oxley Act in 2002, Mr. White has developed a multidisciplinary corporate governance practice. He has advised numerous Fortune 100, midcap, and small-cap companies and their boards and management on key issues under the Act, including internal control over financial reporting, attorney responsibility policies, director/officer loans, whistleblowers and auditor independence. He also advises clients and their boards and management on difficult corporate law, securities and accounting issues and in conducting internal investigations.
Mr. White is corporate and securities counsel for a Houston oilfield services company. Mr. White and WilmerHale helped this company successfully navigate a difficult multi-year financial reporting process, which included restating prior year financial statements, bringing the company current in its public SEC filings and obtaining relisting on the New York Stock Exchange, advising with respect to management separation issues, and responding to government investigations. Mr. White also provides ongoing advice to the Board on corporate governance matters. Mr. White recently advised an institutional investment manager with respect to restructuring of its short-term investment fund.
Thomas White is a partner in the Corporate and Bankruptcy and Financial Restructuring Practice Groups and a member of the …
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About Association for Financial Professionals
The Association for Financial Professionals® (AFP) serves a network of more than 16,000 treasury and finance professionals. Headquartered just outside of Washington DC, AFP provides members with breaking news, economic research and data on the evolving world of treasury and finance, as well as world-class treasury certification programs, networking events, financial analytical tools, training, and public policy representation to legislators and regulators. AFP is the daily resource for treasury and finance professionals.
AFP’s global reach extends to over 150,000 treasury and financial professionals worldwide, including AFP of Canada; gtnews, an on-line resource for the treasury and finance community; and the London-based bobsguide, a financial IT solutions network
About Latham & Watkins LLP
Latham & Watkins is one of the world’s premier business law firms, with approximately 2,000 attorneys in 31 offices around the world. The firm has internationally recognized practices in a wide spectrum of transactional, litigation, corporate and regulatory areas, advising industry-leading clients on their most important legal issues. From corporate governance issues to intellectual property protection, Latham & Watkins attorneys take innovative and collaborative approaches to finding solutions.
About PricewaterhouseCoopers LLP