Accounting Developments
By Brian Pollice
Community Bank Advisor, 2007 Fall

As fall approaches, many of you will begin developing “to do” lists to identify accounting items that need attention. There are several new items that may require your consideration relative to the 2007 year-end audit season.

To help with your list, here are several hot topics that might be applicable to your bank.

BOLI/Split Dollar Benefit Arrangements

Pronouncements in late 2006 and 2007 changed the accounting for certain BOLI/split-dollar arrangements. If you have any employment benefits that extend beyond retirement, an accounting adjustment may be required on January 1, 2008.

SFAS 158

This pronouncement, affecting some benefit plans, is applicable as of December 31, 2007 for non-public companies and was effective for public companies as of December 31, 2006. Companies with a defined benefit pension or other post-retirement plan should coordinate efforts with their actuaries or consultants to verify that the proper accounting adjustments are made as of December 31, 2007, and disclosure information is obtained in time for the audit.

FIN 48 Analyses

We’ve assisted clients in analyzing their uncertain tax positions. Regardless of the conclusion as to whether there’s little to no uncertainty, an internal memo documenting the reasons for such conclusion is recommended.

SOX 404 for Non-Accelerated Filers

For non-accelerated filers, the external audit opinion for internal controls over financial reporting is not applicable until 2008. However, management must perform its own evaluation procedures in 2007. Many clients have benefited from our assistance to cost-effectively implement SOX procedures, and we encourage you to contact us with any questions.

SOX 404 for Accelerated Filers

With the recent issuance of the PCAOB Audit Standard No. 5 and SEC guidance for management related to SOX 404, we have assisted clients in reevaluating current procedures to comply with SOX 404. The recent update to the audit requirements stress the importance of focusing on material items; this emphasis may cause companies to rethink the definition of “material.”

As always, please feel free to contact any Plante & Moran professional to discuss how these items may affect your business.