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Accounting Research Manager(TM)
Weekly Summary of Developments
January 8-12, 2007
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Accounting Research Manager subscriber,
The Accounting Research Manager database now contains this week's weekly summary of developments. Click the link below to access and print the fully-formatted Weekly Summary:
For detail, please contact info@zy-cpa.com
If you do not have immediate Internet access to the Accounting Research Manager database, below is the text of this week's Weekly Summary.
Accounting and SEC Headlines
Disclosure Checklists -- GAAP and SEC Disclosure Checklists Updated through December 31, 2006
Pension and Other Postretirement Benefit Plans -- Discount Rates, Other Valuation Issues, and Enhanced Disclosures
AcSEC Meeting Minutes -- AcSEC Discusses Revisions to Various Audit and Accounting Guides and Considers Other Matters at January 9-10, 2007 Meeting
Statement 133 Implementation Issues -- FASB Clears and Revises DIG Issues
AICPA Issues Audit Risk Alerts -- Interpretive Guidance Available
Liabilities and Equity -- FASB Discusses Liabilities and Equity Project and Other Matters at January 3, 2007 Meeting
Structured Finance Activities -- Final Interagency Statement Issued
International Financial Reporting -- IASB Issues Agenda for International Financial Reporting Interpretations Committee (IFRIC) Meeting on January 11-12, 2007
Auditing Headlines
Auditor's Communication -- AICPA Issues Auditing Statement
Amendments to Existing Auditing Standards -- Discussion and Analysis of SAS 113
AICPA Issues Audit Risk Alerts -- Interpretive Guidance Available
Government Headlines
Government-Wide Financial Statements -- GFOA Identifies Common Deficiencies upon Review of CAFRs
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ACCOUNTING AND SEC HEADLINES:
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Disclosure Checklists -- GAAP and SEC Disclosure Checklists Updated through December 31, 2006
As described in our Literature Update, we have updated our General U.S. GAAP Financial Statement Disclosures Checklist through December 31, 2006:
For detail, please contact info@zy-cpa.com
We have also updated the General U.S. GAAP Interim Financial Statement Disclosures Checklist through December 31, 2006 and the Industry-Specific Disclosures Checklist: Real Estate.
We have also updated the following four SEC related checklists through December 31, 2006:
-Financial Statement Disclosures - This checklist outlines the required SEC disclosures for financial statements included in 1934 and 1933 Act domestic filings that are incremental to U.S. GAAP. The checklist is organized by accounting topic.
-Management's Discussion and Analysis - This checklist outlines the required SEC disclosures for MD&A included in 1934 and 1933 domestic filings, including Forms 10-K and S-1.
-Incremental Certifications, Disclosures, and Reporting Mandated by Sarbanes-Oxley - This checklist outlines the certification, disclosure, and reporting requirements resulting from the SEC rules mandated by the Sarbanes-Oxley Act of 2002. The checklist provides a by-topic "tickler" and effective dates for the new requirements. It also provides a column for users to note implementation date.
-Form 10-Q Checklist - This checklist is for financial and nonfinancial information included in Form 10-Q and is organized by form item number.
See our Literature Update for complete details of these SEC related checklists:
For detail, please contact info@zy-cpa.com
Pension and Other Postretirement Benefit Plans -- Discount Rates, Other Valuation Issues, and Enhanced Disclosures
For detail, please contact info@zy-cpa.com
We have issued a hot topic that discusses the appropriate discount rate that companies should use when valuing their pension and postretirement benefit obligations (OPEBs). We have also discussed certain other valuation considerations and recently enhanced disclosure requirements that should be taken into consideration as companies prepare for year-end reporting. We are covering those subjects together with a brief discussion of the activities at the FASB as they relate to pension accounting and are also alerting our users to certain views expressed by staff members of the SEC. Although much of the discussion in our hot topic refers to statements or views of the SEC staff, we believe such discussion is relevant to nonpublic companies as well.
AcSEC Meeting Minutes -- AcSEC Discusses Revisions to Various Audit and Accounting Guides and Considers Other Matters at January 9-10, 2007 Meeting
For detail, please contact info@zy-cpa.com
We have prepared minutes of the AcSEC meeting held on January 9-10, 2007. At this meeting, AcSEC considered the following matters or topics:
-Revisions to the Audit and Accounting Guide (AAG), Audits of Airlines;
-Revisions to the AAG, Health Care Organizations;
-Revisions to the AAG, Audits of Casinos;
-Comment Letter on GASB Exposure Draft, Elements of Financial Statements;
-Comment Letter on FASB Exposure Drafts, Not-for-Profit Organizations: Mergers and Acquisitions,and Not-for-Profit Organizations: Goodwill and Other Intangible Assets Acquired in a Merger or Acquisition;and
-Other information, "Chair's Report."
As described in our minutes, AcSEC considered and approved various revisions to the above mentioned existing audit and accounting guides. In addition, AcSEC learned that the FASB will consider whether to defer the effective date (currently internal replacements occurring in fiscal years beginning after December 15, 2006) in Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts.
See our minutes for a discussion of these and other topics covered at the January 9-10, 2007 meeting.
Statement 133 Implementation Issues -- FASB Clears and Revises DIG Issues
For detail, please contact info@zy-cpa.com
The FASB has revised the guidance in DIG issue G-19, "Hedging Interest Rate Risk for the Forecasted Issuances of Fixed-Rate Debt Arising from a Rollover Strategy" and cleared guidance in DIG Issue G-26, "Cash Flow Hedges: Hedging Interest Cash Flows on Variable-Rate Assets and Liabilities That Are Not Based on a Benchmark Interest Rate."
AICPA Issues Audit Risk Alerts -- Interpretive Guidance Available
The AICPA has issued the following Audit Risk Alerts:
-Bank, Credit Union, and Other Depository and Lending Institution Industry Developments - 2006/2007
For detail, please contact info@zy-cpa.com
-Construction Contractors Industry Developments - 2006/2007
For detail, please contact info@zy-cpa.com
These Audit Risk Alerts may be useful to preparers and auditors in gaining an understanding of how current accounting, auditing, and regulatory developments affect construction contractors and depository and lending institutions.
In addition to the above industry specific alerts, the AICPA has also issued the following Audit Risk Alert:
-Compilation and Review Alert - 2006/2007
For detail, please contact info@zy-cpa.com
Liabilities and Equity -- FASB Discusses Liabilities and Equity Project and Other Matters at January 3, 2007 Meeting
For detail, please contact info@zy-cpa.com
As reported in its "Action Alert" publication, the FASB met on January 3, 2007, and addressed the following projects or topics:
-Liabilities and Equity
-Fair Value Option
Of note, the FASB considered a suggestion by the EITF that the FASB undertake a project to make targeted, short-term improvements to existing standards of accounting for financial instruments with characteristics of both a liability and equity. After considering various alternatives, the FASB decided to focus its resources on the existing modified joint project on liabilities and equity and not to add a short-term improvements project to its agenda.
The Action Alert also notes that the following projects or topics are scheduled to be discussed by the FASB at its January 17, 2007 meeting:
-Agenda Request—Delay of FIN 48 Effective Date
-Computational Guidance for Computing Diluted EPS under the Two-Class Method
The FASB will consider several requests that have been received from constituents to delay the effective date of FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes. In addition, the FASB will discuss whether to issue formal guidance in the form of a proposed FASB Staff Position that would provide computational guidance for diluted earnings per share when applying the two-class method pursuant to FASB Statement No. 128, Earnings per Share.
Structured Finance Activities -- Final Interagency Statement Issued
For detail, please contact info@zy-cpa.com
The SEC, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and the Office of Thrift Supervision jointly issued a final statement on the complex structured finance activities of financial institutions. This Statement describes the types of internal controls and risk management procedures that could help financial institutions identify, manage, and address risk that could be associated with complex structured finance transactions. The original proposal was issued May 19, 2004, and was subsequently revised on May 9, 2006 to be more "principles-based" and to focus on the types of complex structured finance activities that pose heightened risk to financial institutions. The guidance in the final Statement is effective January 11, 2007.
International Financial Reporting -- IASB Issues Agenda for International Financial Reporting Interpretations Committee (IFRIC) Meeting on January 11-12, 2007
For detail, please contact info@zy-cpa.com
The IASB has issued the agenda for the IFRIC January 11-12, 2007, meeting which includes:
-IFRIC Due Process Handbook
-D20 Customer Loyalty Programs
-IAS 19 Employee Benefits
-IAS 39 Financial Instruments: Recognition and Measurement
-IAS 18 Revenue
-IAS 38 Intangible Assets
-IAS 21 The Effects of Changes in Foreign Exchange Rates
-IAS 41 Agriculture 12
-IAS 27 Consolidated and Separate Financial Statements
-IAS 17 Leases
-IAS 36 Impairment of Assets
Some of the documents listed above may not be accessible under your current subscription. For information about upgrading your subscription to include additional content, click here:
For detail, please contact info@zy-cpa.com
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AUDITING HEADLINES:
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Auditor's Communication -- AICPA Issues Auditing Statement
For detail, please contact info@zy-cpa.com
The AICPA has issued Statement on Auditing Standards (SAS) No. 114, The Auditor's Communication With Those Charged With Governance. This SAS focuses on the communications that should take place between an auditor and those charged with governance of the entity being audited. Under the SAS, both a company's board of directors and audit committee would be considered to have been charged with governance of the entity, but the SAS also provides guidance on how to determine others that are charged with such governance. The primary subjects on which an auditor is required to communicate with those charged with governance of the entity include: (a) the responsibilities of the auditor under generally accepted auditing standards; (b) an overall picture of the auditor's planned scope and timing for the audit; and (c) significant audit findings. Additional guidance regarding the nature of the communications on each of these subjects is provided in the SAS. In addition, the SAS provides guidelines on how these communications should be documented. SAS 114 is effective for audits of financial statements for periods beginning on or after December 15, 2006.
Amendments to Existing Auditing Standards -- Discussion and Analysis of SAS 113
For detail, please contact info@zy-cpa.com
We have added a GAAS Update Service that provides discussion and analysis of AICPA Statement on Auditing Standards (SAS) No. 113 entitled, Omnibus Statement on Auditing Standards - 2006. This SAS amends the following SASs for a variety of reasons:
-SAS 1, Codification of Auditing Standards and Procedures, "Subsequent Events";
-SAS 57, Auditing Accounting Estimates;
-SAS 59, The Auditor's Consideration of an Entity's Ability to Continue as a Going Concern;
-SAS 85, Management Representations;
-SAS 95, Generally Accepted Auditing Standards;
-SAS 99, Consideration of Fraud in a Financial Statement Audit; and
-SAS 101, Auditing Value Measurements and Disclosures.
SAS 113 amends (a) SAS 1, SAS 57, SAS 59, and SAS 101 to remove references to the "completion of fieldwork" and replace them with "the date of the auditor's report" and (b) SAS 1 and SAS 85 to change the date of management representations from "a date no earlier than the date of the auditor's report" to "the date of the auditor's report." These amendments are effective for audits of financial statements for periods ending on or after December 15, 2006, with earlier application permitted.
Also, SAS 113 amends (a) SAS 95 to clarify the terminology used to describe professional requirements imposed on auditors (e.g., use of "must" instead of "shall") and (b) SAS 99 to provide a clear link between the auditor's consideration of fraud and the auditor's assessment of risk and the auditor's procedures in response to those assessed risks. These amendments are effective for audits of financial statements for periods beginning on or after December 15, 2006, with earlier application permitted.
AICPA Issues Audit Risk Alerts -- Interpretive Guidance Available
As discussed above in our Accounting and SEC Summaries, the AICPA has issued the following Audit Risk Alerts:
-Bank, Credit Union, and Other Depository and Lending Institution Industry Developments - 2006/2007
For detail, please contact info@zy-cpa.com
-Construction Contractors Industry Developments - 2006/2007
For detail, please contact info@zy-cpa.com
These Audit Risk Alerts may be useful to preparers and auditors in gaining an understanding of how current accounting, auditing, and regulatory developments affect construction contractors and depository and lending institutions.
In addition to the above industry specific alert, the AICPA has also issued the following Audit Risk Alert:
-Compilation and Review Alert - 2006/2007
For detail, please contact info@zy-cpa.com
Some of the documents listed above may not be accessible under your current subscription. For information about upgrading your subscription to include additional content, click here:
For detail, please contact info@zy-cpa.com
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GOVERNMENT HEADLINES:
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Government-Wide Financial Statements -- GFOA Identifies Common Deficiencies upon Review of CAFRs
For detail, please contact info@zy-cpa.com
We have added a Governmental GAAP Update Service that discusses the most common financial reporting deficiencies found in the comprehensive annual financial reports (CAFRs) of state and local governments as identified by the Government Finance Officers Association (GFOA) Certificate of Excellence in Financial Reporting program. This is the second in a series of update services focused on this subject. The common deficiencies focused on in this update service are those related to the government-wide statement of net assets and the statement of activities presented in accordance with GASB Statement No. 34, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments. Examples of such deficiencies found in the government-wide statement of net assets are: (a) failure to properly classify a portion of the unreserved fund balance reported in individual governmental funds as restricted net assets and (b) failure to report depreciable assets separately from those that are not being depreciated. Examples of such deficiencies found in the government-wide statement of activities are: (a) failure to properly report special items and (b) failure to report insurance recoveries as program revenues.
Some of the documents listed above may not be accessible under your current subscription. For information about upgrading your subscription to include additional content, click here:
For detail, please contact info@zy-cpa.com