CUNA Regulatory Comment Call


August 16, 2005

FASB Proposed Guidance on Mergers
(Major Rule)

EXECUTIVE SUMMARY

BACKGROUND

DESCRIPTION OF THE EXPOSURE DRAFT

Identifying the Acquirer

Determining the Acquisition Date

Measuring the Fair Value of the Acquiree

Measuring and Recognizing the Assets Acquired and the Liabilities Assumed

Disclosures

QUESTIONS TO CONSIDER REGARDING THE EXPOSURE DRAFT
(It is not necessary to respond to every question. Please respond to those issues about which you have a strong opinion.)

    Measuring the Fair Value of the Acquiree

  1. Does the Proposed Statement provide sufficient guidance for measuring the fair value of an acquiree? (For more detailed information, please see paragraphs A8–A26; also see paragraphs 19 and 20 as well as paragraphs B56–B99.)

    Yes_____ No_____

    If not, what additional guidance is needed?
















  2. Do you agree that the costs that the acquirer incurs in connection with a business combination -- for example valuation costs, legal fees and accounting fees -- are not assets and generally should be expensed? (See paragraph 27 and paragraphs B93–B99.)

    Yes_____ No_____

    If not, why?
















    Measuring and Recognizing the Assets Acquired and the Liabilities Assumed

    This Exposure Draft proposes that an acquirer measure and recognize as of the acquisition date the fair value of the assets acquired and liabilities assumed as part of the business combination, with limited exceptions. (See paragraphs 28–41 and paragraphs B100–B142.)

  3. Do you believe that these proposed changes to the accounting for business combinations are appropriate? Yes_____ No_____

    If not, which changes do you believe are inappropriate, why, and what alternatives do you propose?
















    Measurement Period

    This Exposure Draft proposes that an acquirer recognize adjustments made during the measurement period to the provisional values of the assets acquired and liabilities assumed as if the accounting for the business combination had been completed at the acquisition date. Thus, comparative information for prior periods presented in financial statements would be adjusted, including any change in depreciation, amortization, or other income effect recognized as a result of completing the initial accounting. (See paragraphs 62–68 and paragraphs B161–B167.)
  4. Do you agree that comparative information for prior periods presented in financial statements should be adjusted for the effects of measurement period adjustments? Yes_____ No_____ If not, what alternative do you propose and why?
















    Disclosures

    This Exposure Draft proposes broad disclosure objectives that are intended to ensure that users of financial statements are provided with adequate information to enable them to evaluate the nature and financial effects of business combinations. Those objectives are supplemented by specific minimum disclosure requirements. In most instances, the objectives would be met by the minimum disclosure requirements that follow each of the broad objectives. However, in some circumstances, an acquirer might be required to disclose additional information necessary to meet the disclosure objectives. (See paragraphs 71–81 and paragraphs B184–B191.)

  5. Do you agree with the disclosure provisions (minimum disclosure requirements)?

    Yes_____ No_____

    If not, how would you propose amending the objectives or what disclosure requirements would you propose adding or deleting, and why?
















  6. Other comments.
















Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Lilly Thomas • Assistant General Counsel • (202) 508-6733 • lthomas@cuna.com
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com