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The FASB announced in late August that it was distributing a final draft of its proposed accounting for derivatives and similar financial instruments to its Financial Instruments Task Force with a request for comment on the operational effectiveness and clarity of the draft. Because of the high level of interest, the board also decided to make the draft broadly available to other interested parties who may wish to comment on its clarity and operational effectiveness.

The board's stated intention is to issue a final statement by December 31, 1997. In announcing the limited re-exposure, the board said it would close the comment period 45 days after the date of distribution to the task force and would not consider comments received after that cut-off date.

The announcement is a bold move on the part of the board to move forward in spite of continued pressure from the financial community to make a full re-exposure of the document. The American Bankers Association released a copy of a letter dated August 20, 1997, addressed to FASB chair Edmund Jenkins and SEC Chairman Arthur Levitt and signed by the chief executives of 13 financial institutions urging a full re-exposure of the revised proposals. Among those marked for copies of the letter were Senators D'Amato, Gramm, and Dodd, Congressman Dingell, and Federal Reserve Chief Alan Greenspan.

FASB, based on published news accounts, has the backing of SEC Chairman Levitt and Chief Accountant Michael Sutton. AICPA president Barry Melancon has also spoken out in support of FASB.

Lurking on the horizon is the possibility of Congressional hearings to see if all is right in the standard setting world. This is clearly the time for all in the private sector to watch these events unfold and support the efforts of FASB to deal with these contentious issues. Political intervention is not the answer.

The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

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