TO:	Files
FROM:	J. Minke-Girard
RE:	Release Nos. 33-8098; 34-45907; International Series Release No. 1258 File No. S7-16-02
DATE:	July 12, 2002

On April 1, 2002, Bob Herdman (Chief Accountant) and other members of the Office of Chief Accountant and Division of Corporation Finance staff met with representatives of the Committee on Corporate Reporting (CCR) of Financial Executives International (FEI). During the meeting, SEC staff indicated that the Commission is in the process of considering proposed rules that would call for improved disclosure in Management's Discussion and Analysis (MD&A) about companies' critical accounting estimates. Members of the CCR were generally supportive of the initiative but cautioned the staff against detailed requirements in new rules and expressed the need for more "safe harbors" related to MD&A disclosure. The CCR also provided the following specific comments:

• CCR agrees in principle that critical accounting policies should be disclosed in the MD&A at a high-level, but is concerned if these disclosures would require inclusion of ranges, sensitivity analysis, impact analysis, etc.

• CCR is concerned that companies will be repeating disclosure of "Footnote 1, Summary of Significant Accounting Policies". MD&A critical accounting disclosures should be used to emphasize policies involving judgment issues, and link, as applicable, to details provided in Footnote 1.

• CCR supports these disclosure requirements, but strongly recommends that before the SEC proceeds with codifying these rules, they first evaluate disclosures of these policies made by registrants in the 2001 10-Ks.