July 19, 2002
Jonathan G. Katz
Secretary, U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Proposed Rule: Disclosure in Management's Discussion and Analysis about the Application of Critical Accounting Policies
Dear Mr. Katz:
Delphi Corporation respectfully submits this correspondence communicating our position on the above noted proposed rule.
We agree with the U.S. Securities and Exchange Commission's (SEC) position that an important challenge facing capital markets today is a need to improve the quality and transparency of financial disclosure. We also agree that transparency of financial disclosure would be improved by enhancing investors' understanding of a company's application of critical accounting policies. Accordingly, we support the proposed rule requiring expanded disclosure of the methods, assumptions and effects of a company's critical accounting estimates. This improved understanding of a company's critical accounting policies will assist investors in their assessment of the company's financial position and operating results; and whether the company's past performance is indicative of future performance.
We also agree with the SEC's assessment that investors will not benefit from a lengthy discussion of a multitude of accounting estimates, in which the truly critical ones are obscured. Accordingly, we support, and urge the SEC to emphasize its position, that the majority of companies' disclosure will be limited to three to five critical estimates.
Please contact us if you desire further input or clarification at (248) 813-2605.
John D. Sheehan
Chief Accounting Officer and Controller