February 17, 1989
TO: BOARD OF GOVERNORS NO. 11-89
ACCOUNTING/TREASURERS MEMBERS NO. 1-89
CLOSED-END FUND MEMBERS NO. 11-89
OPERATIONS MEMBERS NO. 9-89
SEC RULES MEMBERS NO. 12-89
UNIT INVESTMENT TRUST MEMBERS NO. 15-89
INDEPENDENT ACCOUNTANTS ADVISORY COMMITTEE
RE: FASB ISSUES SFAS NO. 102, AMENDING SFAS NO. 95
__________________________________________________________
The Financial Accounting Standards Board (FASB), on
February 10, 1989, issued the attached Statement of Financial
Accounting Standards No. 102 (Statement) which, among other
things, exempts most investment companies from the general
requirement to present a statement of cash flows in accordance
with SFAS No. 95. The exemption criteria and definitions in the
Statement are substantially unchanged from the Exposure Draft.
Provided that the conditions in paragraph 7 are met,
paragraph 6 of the Statement makes the exemption available to (a)
investment companies subject to the Investment Company Act of
1940 ('40 Act), (b) investment companies having essentially the
same characteristics as those subject to the '40 Act, and (c)
common trust funds, variable annuity accounts, or similar funds.
The conditions in paragraph 7 are:
a. During the period, substantially all of the
enterprise's investments were highly liquid (for
example, marketable securities and other assets for
which a market is readily available).
b. Substantially all of the enterprise's investments are
carried at market value.
c The enterprise had little or no debt, based on average
debt outstanding during the period, in relation to
average total assets.
d. The enterprise provides a statement of changes in net
assets.
We will keep you advised of further developments
Donald J. Boteler
Director of Operations/
Fund Accounting
Attachment