IMC Global Inc.
2100 Sanders Road
Northbrook, Illinois 60062-6146

April 17, 2000

Jonathan G. Katz
U.S. Securities and Exchange Commission
File Reference No. S7-03-00
450 Fifth Street, N.W.
Washington, D.C. 20549-0609

Dear Mr. Katz:

You have requested comments on the rule proposal, Supplementary Financial Information (Rule Proposal). At IMC Global Inc. (IMC), we believe that the Rule Proposal will have a significant effect on IMC's financial reporting as required under SEC Regulations S-X and S-K.

We have structured our response to address those issues outlined in the letter of request for comments that will or could impact IMC.

Issue 1: Expansion of Valuation and Qualifying Accounts Disclosures

The Rule Proposal would require a company to include information concerning all loss accruals, which expands the definition of valuation and qualifying accounts, within the Supplementary Financial Information section of Regulation S-K. It is stated that this new requirement would limit the possibility of "earnings management" by providing more transparency in the financial statements.

Currently, in accordance with Rule 12-09 of Regulation S-X, the detail and activity of valuation and qualifying accounts must be provided for each period for which an audited income statement is required. Additionally, in accordance with Rule 5-02, Balance Sheets, of Regulation S-X a company is currently required to disclose all material loss accruals and related allowance accounts on the face of an audited balance sheet or in the notes thereto. Activity within the accounts under Rule 5-02 is not specifically detailed, however by providing the activity of charges to expense, other accounts and general other additions/deductions for all material accounts, the cost of preparing the information would far outweigh the benefits achieved.

Issue 2: Expansion of Property, Plant and Equipment and Related Accumulated Depreciation, Depletion and Amortization Disclosures

The Rule Proposal would also add expanded information concerning property, plant and equipment and related accumulated depreciation, depletion and amortization. The disclosure would be similar to schedule information previously required under Rules 12-06 and 12-07 of Regulation S-X. Prior to 1995, companies were required to provide detailed schedules of property, plant and equipment and related accumulated depreciation, depletion and amortization in cases where they exceeded 25 percent of total assets. Activity disclosed through these schedules included additions, retirements and other changes in each major fixed asset account. The SEC rescinded these schedule requirements in 1994, as the information provided was considered redundant to that already required in the financial statements.

We believe that the information currently provided in the financial statements concerning long-lived assets and related accumulated depreciation, depletion and amortization is more than adequate for investors to develop an accurate picture of the company presented. Therefore, the proposed schedules, which were considered redundant information only six years ago, should not be required.

Comments to Questions on specific elements of the Rule Proposal

In reference to our discussions above, we believe that current reporting practices are adequate. However, if the Rule Proposal were passed then we have the following comments:

1. Are there other specific loss accrual or valuation accounts that should be added to the list of accounts identified within proposed Item 302(c)?

We would not recommend adding additional accounts to the list identified within Proposed Item 302(c).

2. Should specific percentage tests be used to trigger specific account disclosures within the proposed rules?

We agree that an account materiality threshold should be placed in effect. Five to ten percent of total assets appears to be a reasonable pre-established numerical threshold.

3. Should the placement of the proposed data be moved within MD&A or to some other section of the filing to enhance the prominence of the disclosures?

We would prefer the proposed data be limited to an exhibit and/or schedule in the Form 10-K.

4. Should presentation of the proposed data be limited to the Form 10-K?

We would prefer the proposed data be limited to an exhibit and/or schedule in the Form 10-K.

5. Should the disclosure requirements be restricted to those registrants that exceed a certain size or meet some other threshold?

We would prefer that all companies, regardless of size, should be subject to the additional reporting requirements. "Earnings management" is not just limited to large public companies.

6. Are there circumstances where registrants may appropriately exclude disclosure about loss accruals related to litigation because of concerns about confidentiality while still conforming with GAAP?

We believe that providing detail regarding loss accruals related to litigation would be competitively harmful. Therefore, we would agree that loss accruals related to litigation should be excluded from disclosure requirements.

7. Should the disclosures concerning valuation and loss accrual account activity be required when interim financial statements are presented?

We would prefer the proposed data be limited to an exhibit and/or schedule in the Form 10-K.

8. Should the disclosures concerning changes in property, plant, equipment, and intangible assets and related accumulated depreciation, depletion, and amortization be required when interim financial statements are presented?

We would prefer the proposed data be limited to an exhibit and/or schedule in the Form 10-K.


The main purpose of this Rule Proposal is to provide sufficient analytical information so that changes in the amounts and activities of valuation and loss accrual accounts, long-lived assets and related depreciation, depletion and amortization accounts are transparent to investors. IMC disagrees with the Rule Proposal and feels that the proposed changes will unduly burden companies in providing additional information that is, for the most part, included in the Annual Report and Form 10-K.

Additionally, the SEC has noted that examples of abusive "earnings management" by public companies has been occurring with increased frequency as failure to meet analyst's expectations by even small amounts can have a significant negative effect on market capitalization. It appears that the SEC is taking the stance that providing significant amounts of additional financial information can minimize "earnings management." We believe that this Rule Proposal, which could lead to competitively harmful disclosures given the extent of required additional financial information, would not deter a company who currently practices abusive "earnings management." This Rule Proposal would only burden the already voluminous financial reporting process of public companies whose management properly follows the current rules of earnings recognition.

We appreciate your consideration.

Very truly yours,

/s/ Anne M. Scavone

Anne M. Scavone
Vice President and Controller