Historically the financial reporting requirements for ESOP companies have been have been limited to the requirements of Statement of Position 93-6 Employers’ Accounting for Employee Stock Ownership Plans (SOP 93-6). While the Financial Accounting Standards Board (FASB) explored additional reporting requirements in recent years those requirements have been shelved. That could soon change...
As part of the AICPA Employee Benefits Conference the DOL reiterated their desire to impose a potential legal liability on financial advisors (i.e. ESOP appraisers) and specifically mentioned ESOPs as an audit priority. They also provided an update on the timing of the DOL Re-Proposal of the DOL ESOP Fiduciary Regulation that would be consistent with the July 2012 timeframe we have been discussing.
Yesterday we shared the latest timing update that the revised DOL ESOP Fiduciary Regulations will be available in July 2012 (or later). The Department of Labor Wants to Redefine “Fiduciary” to Include ESOP Appraisers. Why? discusses how the DOL has still not provided a meaningful analysis of the improper ESOP stock appraisals they cite nor quantified the extent of the problem. The article provides an overview and analysis of the proposed regulations, discusses valuation industry recommendations, and provides an update on the status of the revised proposed regulations:
The video is about 10 minutes in length and the section about employee ownership is at the four to five minute mark. This particular speech was given in regard to the 1986 Report released by the Presidential Task Force on Project Economic Justice. These remarks were made at the ceremony where President Reagan received the Report on how employee ownership could counter Communism in Central America. The first four minutes are remarks about individual rights and freedom. President Reagan in the last six minutes speaks directly about employee ownership as key to economic justice.
Last month we provided an analysis of the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), and earlier this week we shared a Summary of Key WRERA Provisions. Here are links to two additional summaries:
Rep. Dana Rohrabacher [R-CA] introduced H.R. 6419: To amend the Internal Revenue Code of 1986 to exclude from gross income compensation received by employees consisting of qualified distributions of employer stock on June 26, 2008, which was cosponsored by Rep. Virgil Goode [R-VA], Rep. Walter Jones [R-NC], and Rep. Peter Roskam [R-IL], and has been referred to the House Ways and Means Committee. Rep. Ron Paul [R-TX] also cosponsored the bill on July 17, 2008.