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By Denise Lugo
Oct. 7 — Accounting support fees that public companies pay annually to fund the Financial Accounting Standards Board’s budget will likely increase in 2017, the president and CEO of FASB’s parent organization, the Financial Accounting Foundation said.
In 2015, 8,410 publicly traded companies paid a total of $23.9 million in accounting support fees for FASB, according to FAF’s website.
FASB’s accounting support fees are collected from issuers of publicly traded securities to fund the board’s annual recoverable expenses, a requirement under the Sarbanes-Oxley Act of 2002.
In determining accounting support fees, the FAF uses a portion of cash reserves to offset some recoverable expenses. But over the past three years, the extra $3 million used to offset recoverable expenses have been exhausted, FAF’s Terri Polley said during FASB’s Oct. 6 meeting with the Institute of Management Accountants.
“Our expenses are fairly flat year-to-year, in some cases zero increase; in another case, a one percent increase—so pretty flat,” she said.
FAF’s Trustees will approve the budget in November, which then gets submitted to the Securities and Exchange Commission for review to ensure it’s statutorily in line with the SOX Act, Polley said.
In 2016, the FAF completed the change in its cash management policy to reduce reserves over three-years, which meant a higher than normal offset in the last three years, FASB told Bloomberg BNA.
In 2017, because “we will be back to a normal level, the net impact likely will be an increase in accounting support fees despite our flat budget,” said Polley. “Even so, it’s important to point out that with that offset stakeholders do not pay 100 percent of recoverable expenses,” she said.
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