AIG to Convert Preferred Shares Into Common to Repay U.S. [Bloomberg]
“American International Group Inc. agreed with U.S. regulators to repay its bailout by converting the government’s holdings into common shares for sale, a step toward independence for the insurer whose near collapse two years ago threatened the global economy.
The U.S. Treasury Department will convert its preferred stake of about $49.1 billion for 1.66 billion shares of common stock and then sell the holdings in the open market, AIG said today in a statement. Common shareholders, who hold about 20 percent of the company, will have their stake dilut ent, the insurer said. Those investors will receive as many as 75 million warrants with a strike price of $45.”
Spain loses AAA status, stands firm on austerity [Reuters]
“Spain lost its final top-line debt rating on Thursday as the government sought backing from lawmakers for a budget it hopes will be austere enough to convince markets it can slash the deficit at a time of economic weakness.
Moody’s become the third and last rating agency to cut Spain out of the highest AAA category which has helped it finance its debt relatively cheaply. The one-notch cut had been expected and the agency said it hoped not to have to cut again soon, bolstering Spanish debt markets.
But the agency also said a poor growth outlook meant Madrid would have to take further steps to meet its deficit targets in years to come. The Bank of Spain said a sluggish recovery would slow further in the third quarter.”
IASB head knows all about cross-channel frictions [FT]
“In a decade spent overseeing international accounting standards, Sir David Tweedie has become an amateur student of French psychology.
The Scot has locked horns with France several times as head of the International Accounting Standards Board, the body that sets the International Financial Reporting Standards rules followed in the European Union and other countries.
His fascination for his adversary is such that he recently thrust into my hands an academic paper entitled “France and the ‘Anglo-Saxon’ Model: Contemporary and Historical Perspectives”. The article explores the hostility often felt in France towards the British and American way of doing business.”
McDonald’s May Drop Health Plan [WSJ]
“While many restaurants don’t offer health coverage, McDonald’s provides mini-med plans for workers at 10,500 U.S. locations, most of them franchised. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.
Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.”
Wal-Mart picks successor to longtime CFO [Reuters]
“Wal-Mart Stores Inc (WMT.N) named Charles Holley to succeed Chief Financial Officer Tom Schoewe, who will retire on November 30.
The world’s biggest retailer said on Wednesday that Schoewe, 57, will stay at Wal-Mart until January 31 to help with the transition.
Holley, 54, joined Wal-Mart in 1994 and is treasurer and executive vice president of finance.
Those credentials should make him a capable CFO, said Wall Street Strategies analyst Brian Sozzi, though Wall Street could view the transition negatively since it adds uncertainty.”
All We Are Saying Is Give Dick Fuld a Chance [Jonathan Weil/Bloomberg]
Names being floated to replace Larry Summers as the National Economic Council include Citigroup Chairman Dick Parsons and Xerox CEO Anne Mulcahy. Jonathan Weil sees where Obama is going with this:
“There’s much we can learn about the kind of person the president is looking for by studying these two contenders’ credentials. In addition to CEO chops, it seems Obama is seeking someone who also has served on the board of directors of at least one company that either had a massive accounting scandal, blew up so spectacularly that it threatened to take down the global financial system, or both.”
…and doesn’t think he’s aiming high enough. He has some of his own suggestions.
Sharpton faced with fresh tax woe [Tax Watchdog]
The Rev. owes around $538k to the IRS for 2009. His lawyer is a tad confused by the whole thing and says everything will paid up by Oct. 15th.
Summers exit lets Obama retool team and message [Reuters]
“The departure of economic adviser Larry Summers opens the way for President Barack Obama to shake up leadership of his economic team and show he is taking seriously growing public frustration over the sluggish economic recovery.
Whoever replaces Summers ions constrained by a record $1.47 trillion budget deficit and the possible Democratic loss of control of the House of Representatives in November 2 congressional elections.”
The Obama Tax Plan: Who’s in the Crosshairs? [TaxVox]
“President Obama’s plan to raise taxes on the nation’s highest income households may not quite mean what you think. A closer look suggests that fewer people may get whacked than either Obama or his Republican critics suggest. And for many of the victims, the club won’t be the president’s plan to raise rates to 36 percent and 39.6 percent. Those rate hikes may be getting most of the attention, but the real cudgel would be higher taxes on capital gains and dividends going to high-earners.”
H&R Block Announces New Chief Financial Officer [MarketWatch]
“H&R Block (HRB 12.82, -0.08, -0.62%) announced today the appointment of Jeff Brown as chief financial officer. Brown has been the company’s interim CFO for the past five months. As an eight-year veteran of H&R Block, Brown has played an important role in a variety of financial functions.
‘I am very pleased with the leadership Jeff has provided me and the organization in his interim role,; said Alan Bennett, H&R Block’s president and chief executive officer. ‘Jeff has all the talent and personal characteristics needed to be highly successful as the permanent CFO. He has earned my full confidence, as well as that of the board of directors.’
Most recently, Brown served as H&R Block’s corporate controller. Prior to that, he was the corporate controller and vice president of finance (Americas) at Bacou-Dalloz, now Sperian Protection, and served in key positions at KPMG. Brown has a business administration degree from the University of Nebraska and is a certified public accountant.”
Sentencing of Petters’ accountant is postponed [Minneapolis Star-Tribune]
“Tuesday’s scheduled sentencing of James Wehmhoff, the accountant who helped Tom Petters file false tax returns, has been postponed until sometime in October. The postponement was ordered by U.S. District Judge Richard Kyle at his own behest.
Wehmhoff faces a prison sentence of between 70 and 80 months on tax charges, but federal prosecutors have asked Kyle to consider Wehmhoff’s cooperation in the Petters investigation and his previously “unblemished” career before he hooked up with Petters Group Worldwide. The government also noted that Wehmhoff was not part of the $3.65 billion Ponzi scheme that Petters and others orchestrated for more than 10 years.”
KPMG Continues to Add Restructuring Talent With Appointments of Tony Murphy, Tom Bibby [PR Newswire]
The House of Klynveld must be counting on more companies falling prey to their massive debt loads with the appointment of Tony and Tommy who both have “proven track records” as restructuring professionals.
Accounting Basics: A Guest Post From Robert B. Walker [Re:The Auditors]
“[New Zealand] follows an American model in which people who are to become accountants are ‘educated’ in Universities. There is minimal emphasis on double entry. Most of the courses are dedicated to theory, bullshit sociology, complex management accounting, auditing and so on. None of this makes any sense to a student if they first do not know the basics of accounting and that can only be gained by actually practicing the discipline.”
Comparing the Ethics Codes: AICPA and IFAC [JofA]
“Sharp increases in the number of multinational audits being performed by U.S. accounting firms means that more CPAs are performing services under the International Federation of Accountants (IFAC) audit and attest standards. Although auditors must comply with the specific standards adopted in each jurisdiction, familiarity with IFAC’s International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants (IESBA Code) in addition to the AICPA Code of Professional Conduct (AICPA Code) is a critical first step. When specifications differ, members should comply with the more restrictive of the applicable standards.”