Tension between regulators and the regulated in the U.S. is about as inevitable as taxes and death. Think about your--or your company's--attitude toward OSHA. Or the Environmental Protection Agency. Or the Commerce Dept. folks who handle export licensing. Or the IRS. Or the FASB. The FASB, you ask? What's a FASB. Well, the private-sector, Norwalk, Conn.-based, seven-member Financial Accounting Standards Board (FASB) writes corporate accounting rules in the U.S. For months now manufacturers, other non-financial corporations, and banks have differed rather dramatically with the FASB over whether earnings statements should reflect the fair market value of financial contracts known as derivatives. (The value of a derivative security is tied to some other kind of asset--such as a stock or a bond--and hence the name.) Significantly, whether derivatives should be accounted for in the ways the FASB is proposing and whether the data will result in investors being better informed are only two of the issues in the current debate between the regulator--the FASB--and the regulated--businesses. There is an underlying issue that goes beyond derivatives--and it has been a point of contention between the FASB and corporations for many years. The issue is disclosure. Companies that produce goods and services in a highly competitive world understandably want to limit the amount and content of information that goes beyond their office and factory walls. But, at the same time, people and institutions--including a whole lot of corporate pension plans--that are being asked to invest in a company, or retain their investments in a company, deserve an accurate profile of that company. Talking to writers, users, and outside observers of U.S. corporate accounting rules does not suggest there's much of a basis for reconciling the quite different perspectives of the regulators and the regulated. For example, what exactly constitutes "adequate" information? Chances are that what's adequate to the regulator is way too much for one of the regulated. Similarly, what's adequate to one of the regulated is likely to be woefully inadequate in the eyes of a regulator. Why do CFOs and regulators like the FASB need to take a new look at disclosure? Why do both need to broaden their perspectives and re-examine some of their traditional arguments? Because when it comes to investing corporations, tradition is about to be shaken in ways it has not been before. The issue of the adequacy--or inadequacy--of financial disclosure is going global. In a world where capitalism in one form or another is commonplace, can--or should--companies headquartered in countries outside the U.S., be allowed to trade their stocks in the U.S. while retaining their home-country--and allegedly inadequate--accounting standards? It's not an academic question. And the answer will help define the international accounting standards that surely are to be proposed. And what about the standards? Should it be assumed that U.S. standards will be--or should be--the benchmark for writing new rules? Should there be a set of interim accounting rules for countries and companies new to capitalism and for which sophisticated data- management systems are a someday prospect rather than today's reality? Is there something businesses could contribute to answering such questions out of their own international financial information management experiences. What kinds of data, for example, do they use in taking the measure of foreign competitors or potential merger partners? Derivatives may seem to be of concern only to those who deal in the arcane world of corporate finance. But with the estimate of the value of derivatives in use at least in the high hundreds of billions of U.S. dollars, it's tough to argue that they don't need to be accounted for if their volatility can significantly affect a company's performance. International financial accounting rules promise to be an even more complex issue. But in their own interest and the interest of their present and future shareholders, companies need now to be asking themselves the new hard questions of disclosure--disclosure in the context of competitive world where competition will become even more intense.