article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Financial Accounting for Intangibles Reexamination (FAIR) Act''. SEC. 2. SENSE OF CONGRESS. It is the sense of the Congress that, prior to changing existing rules of accounting for business combinations and intangible assets, the Securities and Exchange Commission and the Financial Accounting Standards Board should undertake a comprehensive reexamination of the appropriate methods of accounting for purchased and internally generated intangibles including goodwill, and should await the results of related studies of these issues. SEC. 3. MORATORIUM ON ELIMINATION OF POOLING OF INTERESTS METHOD OF ACCOUNTING. (a) Continued Validity of Method.--Notwithstanding any other provision of law, for purposes of any financial statement, report, or other document required under any of the securities laws, the availability and use of the pooling of interests method of accounting for any business combination shall be determined in accordance with generally accepted accounting principles as in effect on October 1, 2000 . (b) Duration of Moratorium.--This section shall take effect upon the date of the enactment of this Act and shall remain in effect until 90 days after the date of the submission of the report required by section 4(e). SEC. 4. FURTHER STUDY. (a) Establishment.--There is established a commission to be known as the Commission on Financial Accounting for Intangibles (referred to in this section as the ``Commission''). (b) Duties.--The Commission shall-- (1) consider the general usefulness of financial statements prepared under generally accepted accounting principles in light of recent trends in the securities markets; (2) consider the impact that shortcomings in generally accepted accounting principles have on securities market volatility, capital allocation, and the investment of retirement fund assets, both individual and institutional; (3) consider methods to better identify, value, and account for purchased and internally generated intangible assets; (4) examine the general questions surrounding the role of intangible assets in financial reporting in the economy; and (5) consider the economic impact that would result if the pooling of interests method of accounting for business combinations were eliminated. (c) Membership.-- (1) Number and appointment.-- (A) The Commission shall be composed of 10 individuals, of which-- (i) 3 shall be appointed by the majority leader of the Senate; (ii) 2 shall be appointed by the minority leader of the Senate; (iii) 3 shall be appointed by the Speaker of the House of Representatives; and (iv) 2 shall be appointed by the minority leader of the House of Representatives. (B) From the 10 commissioners appointed, a chairman shall be selected jointly by the majority leader of the Senate and the Speaker of the House of Representatives. (2) Qualifications for membership.-- (A) Of the members appointed under paragraph (1)(A), 4 shall come from the accounting profession. (B) The remainder of such members shall be experts capable of carrying out the duties described in this section. (3) Deadline for appointment.--All members of the Commission shall be appointed by no later than December 31, 2000. (4) Terms of appointment.--The term of an appointment to the Commission shall be for the life of the Commission. (5) Vacancy.-- (A) A vacancy on the Commission shall be filled, not more than 30 days after notice of the vacancy is given to the Commission, in the same manner in which the original members were selected. (B) A vacancy shall not affect the power of the remaining members to execute the duties of the Commission. (d) Procedure.-- (1) Meetings.--The Commission shall meet at the call of its chairman or a majority of its members. (2) Quorum.--A quorum shall consist of 7 members of the Commission. (e) Report.--Not later than 9 months after the date of the enactment of this Act, the Commission shall submit a report to the President and Congress which shall contain a detailed statement of the Commission's recommendations, findings, and conclusions, and may contain minority or individual member's views. (f) Termination.--The Commission shall terminate not more than 30 days after the date of submission of the report required in subsection (e). SEC. 5. DEFINITIONS. For purposes of this Act: (1) Pooling of interests.--The term ``pooling of interests'' refers to the method of accounting for business combinations described in the Federal Accounting Standards Board's APB Opinion Number 16, Business Combinations, as in effect on October 1, 2000. (2) Securities laws.--The term ``securities laws'' has the meaning given such term in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)).
summary: States that the availability and use of the pooling of interests method of accounting for any business combination shall be determined in accordance with generally accepted accounting principles in effect on October 1, 2000. Establishes the Commission on Financial Accounting for Intangibles to consider specified aspects of: (1) generally accepted accounting principles; (2) intangible assets; and (3) the pooling of interests method of accounting for business combinations. Instructs the Commission to report its recommendations and conclusions to the President and Congress.