CFO, The Magazine for Senior Financial Executives articles from March 2002

CFO, The Magazine for Senior Financial Executives archives from March 2002

A federal case. (From the Editor).(Brief Article)
March 1, 2002... DAVID WALKER IS A BUSY MAN. As head of the U.S. General Accounting Office, he has gained notoriety of late for suing Vice President Dick Cheney for access to the names of the people on Cheney's energy task force. But his relevance to CFO...

It's dereg. (Letters to the Editor).(Brief Article)
March 1, 2002... THE ENRON DEBACLE was preceded by, and partially caused by, unintended consequences of deregulation of the energy industry ("Beyond Enron," February). A good part of the problem is that once organizations no longer answer regulators' questions,...

Synthetically yours. (Letters to the Editor).(Brief Article)
March 1, 2002... I READ YOUR ARTICLE ON synthetic leases ("Double Whammy," January) with interest. What's getting companies in trouble is not amortizing their debt on real-estate synthetics and choosing a short-term instrument to finance a long-term asset. You...

You can run, but you can't hide. (Letters to the Editor).(Brief Article)
March 1, 2002... CFOs and other corporate executives may be "breathing a sigh of relief" that the Securities and Exchange Commission appears to be adopting a less-militant enforcement strategy in accounting-fraud cases ("Calling Off the Dogs," December 2001)....

Correction.(Brief Article)
March 1, 2002... In our January cover story, "Meet the New Boss," we erroneously stated that J.C. Penney CEO Allen Questrom earned his undergraduate degree from Brown University. He earned it from Boston University.

Pitt on the spot. (Newswatch).(after Enron bankruptcy, Harvey Pitt being pressured to restore U.S. accounting industry credibility)(Brief Article)
March 1, 2002... In the wake of Enron Corp.'s bankruptcy, Securities and Exchange Commission chairman Harvey Pitt is under mounting pressure to restore confidence in the U.S. accounting industry. His initial response, announced in January, is to replace the...

Enron's Domino effect. (Partnership Liability).(investment banks partly responsible for Enron's liabilities)(Brief Article)
March 1, 2002... MOST SECURITIES LAWYERS AGREE that investment banks that underwrote off-balance-sheet partnerships run by former Enron Corp. CFO Andrew Fastow bear a fiduciary responsibility to Enron shareholders. But the liability among Enron's limited...

Split decisions. (Executive Compensation).(Internal Revenue Service offers tax guidance for executives holding split-dollar life insurance)(Brief Article)
March 1, 2002... AFTER RAISING THE SPECTER of higher tax burdens for executives who hold split-dollar life insurance arrangements last year, the Internal Revenue Service this year offered up some handy ways to escape the coming doom. Transitional guidance...

A loaded revolver? (Giving Credit).(Financial Accounting Standards Board decision about commercial banks)(Brief Article)(Industry Overview)
March 1, 2002... Is the corporate credit crunch about to get worse? In late December, the Financial Accounting Standards Board decided that banks must mark to market certain types of commercial-loan commitments--such as revolvers-as well as financial...

To expense or not to expense. (Accounting Showdown).(European and U.S. stock-option accounting differ)(Brief Article)
March 1, 2002... IT'S BACK. The battle over stock-option accounting is rearing its ugly head again. This time it's a transatlantic showdown between U.S. companies--including General Electric, Compaq, Sun Microsystems, and Oracle--and the London-based...

U.S. KO'd in WTO Bout. (Trade Dispute).(World Trade Organization decides in favor of the EU in trade subsidy dispute with the U.S. over tax law violations)(Brief Article)
March 1, 2002... In January, the Geneva-based World Trade Organization (WTO) ended a two-year trade subsidy dispute by striking down a U.S. appeal and crowning the European Union the victor. The potentially arduous impact of the decision is that under WTO...

Show us your options. (Disclosure Rules).(SEC decides that U.S. companies will report information about employee stock option plans)(Brief Article)
March 1, 2002... THE SECURITIES and Exchange Commission's 2001 end-of-year meeting gave investors an unexpected bonus-- and corporate finance departments additional work. The SEC ruled that starting in April, companies must include tables in their 10-K reports...

Trade-show tax trap. (Tax Nexus).(Brief Article)
March 1, 2002... Trying to decide whether your company should participate in an upcoming trade show? Here's one more factor to consider: some states require companies to collect sales or use tax on items sold at the show and/or to pay state income tax on the...

Keeping the faith. (Global Confidence Survey).(poll of U.S. CFO's confident about the U.S. economy)(Brief Article)(Polling Data)
March 1, 2002... ARE THINGS LOOKING UP? U.S. finance chiefs think so. Fewer CFOs are fretting about the short-term domestic and global economies compared with a year ago, and more are registering a vote of confidence than was the case last quarter, according to...

Use it or lose it: Software "metering" can simplify licensing decisions and help ensure that IT resources aren't wasted. (Tech Watch).(Scalable Software Inc. offers Survey Technology Manager software to monitor software licensing)(Brief Article)
March 1, 2002... WITH MOKEY TIGHT and staff stretched thin, the thought of overspending on software licenses or internal support can make CFOs and their IT counterparts blanch. That's why, despite evidence that IT spending will actually decline this year over...

Calling for backup: You may have to keep quiet about them, but contingency plans are vital to any M&A strategy. (New Deals).(merger and acquisition strategy)(Brief Article)(Editorial)
March 1, 2002... AT HEWLETT-PACKARD AND COMPAQ COMPUTER, where the managements are in lockstep support of their proposed $25 billion combination, CFOs Robert Wayman and Jeff Clarke have plans for how their respective companies would go it alone if the deal...

Ready to pounce?: The IRS has taken a predatory stance against tax shelters. But several court decisions have altered the rules of the chase. (Spotlight: Taxes).
March 1, 2002... Remember the war on tax shelters? During the Clinton Administration, then- Treasury Secretary Lawrence Summers called abusive tax shelters "one of the most serious compliance problems in the U.S. tax system. He backed up his words with new...

Federal offenses: A dozen years after passage of the CFO act, the U.S. Government till struggles to close its books. (Cover Story).(Statistical Data Included)(Column)
March 1, 2002... We the people of the U n United States have a hard time keeping our finances in order. Our corporations may practice the world's most rigorous financial reporting (some recent debacles notwithstanding), but our government does not. Agencies...

Clinical trials: A new kind of pricing pressure puts pharmaceutical CFOs in an unfamiliar role: Evangelist.(Merck and Co. earnings)(Brief Article)
March 1, 2002... LAST DECEMBER, MERCK & Co., the world's third-largest pharmaceutical company, warned analysts that earnings would be flat for 2002, due to disappointing sales for arthritis drug Vioxx and expiring patents for other drugs. Stock of the drug...

Mutually acceptable; To former Fidelity Investments Vice Chairman Robert Pozen, the key to both social security reform and correcting enron-style retirement plan ills is the same: Diversification. (A CFO Interview).(Brief Article)
March 1, 2002... In his days as a senior executive at Fidelity Investments, Robert C. Pozen was wary of mutual funds with too few stocks. "Ex-post we are all geniuses, but ex-ante it is pretty hard to figure out which ones are going to go up and which are going...

Deskbound for glory: The PC market may be stagnant, but today even an old machine can take a knowledge worker new places. (Special Report: The Desktop PC).(IBM outsources manufacture and distribution of NetVista to Sanmina-SCL Corp.)(Brief Article)
March 1, 2002... IN JANUARY, IBM made an announcement that probably wouldn't have garnered much attention on even the slowest news day. The company signed a $5 billion deal with Sanmina-SCI Corp. to outsource the manufacture of its NetVista PC line. With...

Lies, Damn Lies, and Pro Forma: Pro forma earnings reports may be a cause du jour of reformers, but CFOs aren't about to back down from issuing them. (Accounting).(Thump Hotels and Casino Resorts Inc. nabbed by SEC for exaggerated earnings)(Brief Article)
March 1, 2002... THIS PAST JANUARY, THE SECURITIES AND Exchange Commission administered its first spanking of a company for abusing pro forma earnings figures. The culprit: Thump Hotels & Casino Resorts Inc. The sin: a "materially misleading" quarterly earnings...

Bottom Fishing: Many distressed assets are for sale these days, but because so many are intangible, how can buyers be sure they're getting a bargain? (Bankruptcy).(Enron Corp.)(Brief Article)
March 1, 2002... WHEN ENRON CORP. PUT ITS TRADING operation on the block last December after filing for bankruptcy, creditors and shareholders alike held their breath. After all, the business accounted for 90 percent of the failed energy giant's revenues...

Me and my shadow: Lessons from Predecessors. (Your Move).(John Spinney told to get as much info as possible from predecessor)(Brief Article)
March 1, 2002... WHEN JOHN SPINNEY joined Investors Financial Services Corp. last September, CEO Kevin Sheehan handed him an unusual mission: Extract as much knowledge as possible from departing CEO Karen Keenan, who had decided to leave the company upon the...