

[Federal Register: April 19, 2006 (Volume 71, Number 75)]
[Notices]               
[Page 20143-20144]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ap06-143]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Securities Act of 1933 Release No. 8677]
[Securities Exchange Act of 1934 Release No. 53642]

 
Order Regarding Review of Financial Accounting Standards Board 
Accounting Support Fee for 2006 Under Section 109 of The Sarbanes-Oxley 
Act of 2002

April 13, 2006.
    The Sarbanes-Oxley Act of 2002 (the ``Act'') establishes criteria 
that must be met in order for the accounting standards established by 
an accounting standard-setting body to be recognized as ``generally 
accepted'' for purposes of the federal securities laws. Section 109 of 
the Act provides that all of the budget of an accounting standard-
setting body satisfying these criteria shall be payable from an annual 
accounting support fee assessed and collected against each issuer, as 
may be necessary or appropriate to pay for the budget and provide for 
the expenses of the standard setting body, and to provide for an 
independent, stable source of funding, subject to review by the 
Securities and Exchange Commission (the ``Commission''). Under Section 
109(f), the annual accounting support fee shall not exceed the amount 
of the standard setter's ``recoverable budget expenses.'' Section 
109(h) amends Section 13(b)(2) of the Securities Exchange Act of 1934 
to require issuers to pay the allocable share of a reasonable annual 
accounting support fee or fees, determined in accordance with Section 
109 of the Act.
    On April 25, 2003, the Commission issued a policy statement 
concluding that the Financial Accounting Standards Board (``FASB'') and 
its parent organization, the Financial Accounting Foundation (``FAF''), 
satisfied the criteria for an accounting standard-setting body under 
the Act, and recognizing the FASB's financial accounting and reporting 
standards as ``generally accepted'' under Section 108 of the Act.\1\ As 
a consequence of that recognition, the Commission undertook a review of 
the FASB's accounting support fee for calendar year 2006. In connection 
with its review, the Commission also reviewed the proposed

[[Page 20144]]

budget for the FAF and the FASB for calendar year 2006.
---------------------------------------------------------------------------

    \1\ Financial Reporting Release No. 70.
---------------------------------------------------------------------------

    Section 109 of the Act also provides that the standard setting body 
can have additional sources of revenue for its activities, such as 
earnings from sales of publications, provided that each additional 
source of revenue shall not jeopardize the actual or perceived 
independence of the standard setter. In this regard, the Commission 
also considered the interrelation of the operating budgets of the FAF, 
the FASB and the Government Accounting Standards Board (``GASB''), the 
FASB's sister organization, which sets accounting standards used by 
state and local government entities. The Commission has been advised by 
the FAF that neither the FAF, the FASB nor the GASB accept 
contributions from the accounting profession.
    After its review, the Commission determined that the 2006 annual 
accounting support fee for the FASB is consistent with Section 109 of 
the Act. Accordingly,
    It is ordered, pursuant to Section 109 of the Act, that the FASB 
may act in accordance with this determination of the Commission.

    By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E6-5798 Filed 4-18-06; 8:45 am]

BILLING CODE 8010-01-P
