10. The rule states, "Each member of the staff is expected to devote his full business time to the activities of the Standards Board, and shall not engage in any outside activity which interferes with the performance of his duties to the Standards Board, or which in any way may be, or appear to be in conflict with the staff member's responsibilities to the Standards Board. Each member of the staff is urged to consult with the Chairman of the Standards Board at the earliest possible time if he feels that he is involved in an outside activity which might conflict with his responsibilities to the Standards Board." 11. The rule states, “Staff members may accept reimbursement for out-of-pocket expenses incurred in connection with any such speech or writing, but any fees, honorariums or other payments in connection therewith shall be remitted or paid over to the Foundation." 12. The rule states, “Members of the staff shall not, directly or indirectly, use or otherwise place themselves in a situation to benefit personally from, or, directly or indirectly, disclose or make available to others (other than as required by their employment and duties), any information which might be regarded as material relating to the functions or activities of the Foundation or the Standards Board obtained in the course of their employment and which has not been released or announced or otherwise made available publicly." 13. Citations are to Standing Rules of the Senate set out in the Senate Manual, 95th Cong. 14. Citations are to Rules of the House of Representatives set out in Jefferson's Manual and Rules of the House of Representatives, 95th Cong. 15. No member or employee of the SEC may effect transactions in commodity futures; margin accounts; short sales; securities of an issuer who has had any registration statement declared effective within 60 days or which is pending; securities of any registered public utility holding company, investment company, broker, dealer or investment adviser; or securities which are involved in any investigation. 16. Incompatible activities include employment or association with any registered broker, dealer, public utility holding company, investment company or investment adviser, work in which any government may be significantly interested, employment which creates, or appears to create, a conflict of interest, and employment which impairs any employee's ability. 17. Exceptions to the general prohibition apply when an obvious family relationship motivates the gift; when food and refreshments are offered in the course of a proper conference or tour; when promotional material such as pens, notepads and other items of nominal value are offered; or when the Commission makes an exception. 18. Incompatible activities include those which may result in, or create the appearance of, a conflict of interest and those which impair the employee's ability. 19. Citations are to the U. S. Code and the Code of Judicial Conduct adopted by the American Bar Association. 20. "Financial interest" means ownership of a legal or equitable interest, however small, or active participation in the affairs of a party. Excepted are ownership in a mutual fund, provided the judge does not participate in management; ownership by holding policies of a mutual insurance company, deposits in a mutual savings association and holdings of government securities, provided the outcome of the proceedings do not substantially affect the value of the interest; and offices. . educational, religious, charitable, fraternal or civic organizations. 21. The prohibition applies to judges and members of his family residing in his household. Exceptions are made for gifts incident to public testimonials, books supplied by publishers, invitations to bar-related functions, ordinary social hospitality, gifts from relatives, wedding or engagement gifts, loans from lending institutions made in the regular course of business, scholarships and fellowships. Other gifts, etc. are permitted from those whose interests have not come and are not likely to come before the judge, but any gift over $100 must be disclosed publicly. 22. "Earned income" does not include pensions, profit-sharing or stock bonus plans or amounts not "significant" received from family-controlled businesses. 23. Exclusions from "outside earned income" include book royalties, income from family businesses and partnerships (provided Senators' services are not materially income producing), gains from dealing in property or investments, interest, rents, dividends, alimony, annuities and buy-out arrangements not related to future profitability of the enterprise. The FAF's Trustees have recently directed its Committee on Personnel Policies to review existing Personnel Policies. In particular, the Trustees have charged the Committee to consider a requirement that FASB members and staff directors schedule all investments, even immaterial ones; specific limitations on certain securities transactions and receipt of gifts from non-family members; and adoption of a more general rule with respect to potential conflicts of interest. The Committee is expected to make its recommendations at a meeting of the FAF Trustees later this spring. EXHIBIT D THE RECORD OF THE FASB AND THE ACCOUNTING I. Introduction Since its formation in 1973, the FASB has issued: --14 Statements of Financial Accounting Standards; -18 Interpretations of FASB Statements, APB Opinions and Accounting Research Bulletins; -20 Exposure Drafts; and -13 Discussion Memoranda analyzing significant issues, soliciting written comments and serving as bases for public hearings, including in December 1976 its second Discussion Memorandum on a Conceptual Framework for Financial Accounting and Reporting: Elements of Financial Statements and Their Measurement and its Tentative Conclusions on Objectives of Financial Statements of Business Enterprises. In addition, the FASB has not yet taken final action on one Exposure Draft of a proposed Statement of Financial Accounting Standards. Public hearings have been announced on two projects (Conceptual Framework and Accounting for Business Combinations and Purchased Intangibles), and public hearings on the FASB's Extractive Industries Project were held on March 30-April 1 and on April 4, 1977. Additionally, the FASB has other technical projects on its agenda. The Study asserts that the FASB's output has not improved financial accounting and reporting. As examples, the Study claims that the FASB and its standard-setting predecessors have not dealt with the significant accounting issues, have not eliminated alternative accounting practices, have not developed objectives of financial statements or a conceptual framework within which all accounting standards may be established, and have protected the prerogatives of "special interest groups.' This Exhibit examines the record in relation to these charges. II. Table of Statements, Interpretations and Discussion Memoranda Issued and Public Hearings Held by the FASB and Current Projects Statements of Financial Accounting Standards No. 1 No. 2 No. 3 Disclosure of Foreign Currency Translation Information-Issued December 1973 Accounting for Research and Development Costs-Issued October 1974 Reporting Accounting Changes in Interim Financial Statements-An No. 4 Reporting Gains and Losses from Extinguishment of Debt-An Amendment of APB Opinion No. 30-Issued March 1975 No. 5 Accounting for Contingencies-Issued March 1975 * See also Exhibit B as to the independence and objectivity of the FASB as evidenced by the analysis of responses to its most significant accounting proposals. No. 6 -Classification of Short-Term Obligations Expected to Be Refinanced-An No. 7 -Accounting and Reporting by Development Stage Enterprises-Issued June 1975 No. 8 Accounting for the Translation of Foreign Currency Transactions and Foreign Currency Financial Statements-Issued October 1975 No. 9 Accounting for Income Taxes-Oil and Gas Producing Companies-An Amendment of APB Opinions No. 11 and 23-Issued October 1975 No. 10 Extension of "Grandfather" Provisions for Business Combinations-An Amendment of APB Opinion No. 16-Issued October 1975 No. 11 Accounting for Contingencies-Transition Method-An Amendment of FASB Statement No. 5-Issued December 1975 No. 12 No. 13 No. 14 Interpretations No. 2 Accounting for Certain Marketable Securities-Issued December 1975 Financial Reporting for Segments of a Business Enterprise-Issued Decem- -Accounting Changes Related to the Cost of Inventory (APB Opinion -Imputing Interest on Debt Arrangements Made under the Federal Bank- No. 3 Accounting for the Cost of Pension Plans Subject to the Employee Retirement Income Security Act of 1974 (APB Opinion No. 8)-Issued December 1974 No. 4 -Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method-Issued February 1975 No. 5 Applicability of FASB Statement No. 2 to Development Stage Enterprises-Issued February 1975 No. 6 -Applicability of FASB Statement No. 2 to Computer Software-Issued February 1975 No. 7 -Applying FASB Statement No. 7 in Financial Statements of Established Operating Enterprises-Issued October 1975 No. 8 -Classification of a Short-Term Obligation Repaid Prior to Being Replaced by a Long-Term Security (FASB Statement No. 6)—Issued January 1976 No. 9 -Applying APB Opinions No. 16 and 17 When a Savings and Loan Association or a Similar Institution Is Acquired in a Business Combination Accounted for by the Purchase Method-Issued February 1976 No. 10 Application of FASB Statement No. 12 to Personal Financial Statements-Issued September 1976 No. 11 Changes in Market Value after the Balance Sheet Date (FASB Statement No. 12)-Issued September 1976 No. 12 Accounting for Previously Established Allowance Accounts (FASB Statement No. 12)-Issued September 1976 No. 13 Consolidation of a Parent and Its Subsidiaries Having Different Balance Sheet Dates (FASB Statement No. 12)-Issued September 1976 -Reasonable Estimation of the Amount of a Loss (FASB Statement No. 5) -Issued September 1976 No. 14 No. 15 Translation of Unamortized Policy Acquisition Costs by a Stock Life Insurance Company (FASB Statement No. 8)-Issued September 1976 No. 16 Clarification of Definitions and Accounting for Marketable Equity Securities That Become Nonmarketable (FASB Statement No. 12)-Issued February 1977 No. 17-Applying the Lower of Cost or Market Rule in Translated Financial Statements (FASB Statement No. 8)-Issued February 1977 No. 18 Accounting for Income Taxes in Interim Periods (APB Opinion No. 28) -Issued March 1977 Discussion Memoranda An Analysis of Issues Related to Accounting for Research and Development and Similar Costs-Issued December 28, 1973 An Analysis of Issues Related to Reporting the Effects of General Price-Level Changes in Financial Statements-Issued February 15, 1974 An Analysis of Issues Related to Accounting for Foreign Currency Translation—Issued February 21, 1974 An Analysis of Issues Related to Accounting for Future Losses-Issued March 13, 1974 An Analysis of Issues Related to Financial Reporting for Segments of a Business Enterprise-Issued May 22, 1974 Conceptual Framework for Accounting and Reporting: Consideration of the Report of the Study Group on the Objectives of Financial Statements-Issued June 6, 1974 An Analysis of Issues Related to Accounting for Leases—Issued July 2, 1974 An Analysis of Issues Related to Criteria for Determining Materiality—Issued March 21, 1975 An Analysis of Issues Related to Accounting and Reporting for Employee Benefit Plans-Issued October 6, 1975 Accounting by Debtors and Creditors When Debt is Restructured-Issued May 11, 1976 An Analysis of Issues Related to Accounting for Business Combinations and Purchased Intangibles-Issued August 19, 1976 An Analysis of Issues Related to Conceptual Framework for Financial Accounting and Reporting: Elements of Financial Statements and Their Measurement-issued December 2, 1976 An Analysis of Issues Related to Financial Accounting and Reporting in the Extractive Industries-Issued December 23, 1976 |