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Accounting Research Manager(TM)
Weekly Summary of Developments
March 19-23, 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:

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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

Derivatives and Hedging -- Guidance Revised and Added in Our Interpretations of FASB Statement 133
AcSEC Meeting Minutes -- AcSEC Discusses Revisions to Various Audit and Accounting Guides and Considers Other Matters at March 20-21, 2007 Meeting
Convertible Debt -- FASB Discusses Convertible Debt with Elements of Foreign Exchange Risk and Other Matters at March 14, 2007 Meeting
Customer Loyalty Programs -- IFRIC Discusses Loyalty Programs and Other Matters at March 8-9, 2007 Meeting

Auditing Headlines

SSAE Hierarchy -- Discussion and Analysis of SSAE 14

Government Headlines

Service Efforts and Accomplishments -- Discussion of GASB Project

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ACCOUNTING AND SEC HEADLINES:
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Derivatives and Hedging -- Guidance Revised and Added in Our Interpretations of FASB Statement 133
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We have revised and updated the interpretations in our publication, Derivatives and Hedging - Interpretations of Statement 133. Specifically, we added Interpretation 17-5, "Issuer Recognition of Registration Payment Arrangement Separate From Derivative Financial Instrument," to reflect the issuance of FASB Staff Position (FSP) EITF 00-19-2. "Accounting for Registration Payment Arrangements," which addresses an issuer's recognition and measurement of its contingent obligations under a registration payment arrangement. We also added Interpretation 29h-3a, "Cannot Designate Benchmark Hedge for Issuance of Auction Rate Notes," to reflect the issuance of FASB Staff Implementation Guide, Question G26, "Hedging Interest Cash Flows on Variable-Rate Assets and Liabilities That Are Not Based on a Benchmark Interest Rate."

Our update also includes numerous changes to incorporate comments made by members of the SEC staff at the 2006 AICPA National Conference on Current SEC and PCAOB Developments, and the issuance of the SEC staff's Current Issues and Rulemaking Projects (CIRP), "Current Accounting and Disclosure Issues in the Division of Corporation Finance," dated November 30, 2006.

We also updated the section entitled, "Recent Developments," for recent deliberations at the FASB on a variety of relevant projects, and Appendix II, "Index of Accounting Literature Cited."

AcSEC Meeting Minutes -- AcSEC Discusses Revisions to Various Audit and Accounting Guides and Considers Other Matters at March 20-21, 2007 Meeting
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We have prepared minutes of the AcSEC meeting held on March 20-21, 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 the FASB Exposure Draft, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133;
-Comment Letter on the Federal Accounting Standards Advisory Board's Preliminary Views, Accounting for Social Insurance, Revised; and
-Other information, "Chair's Report."

As described in our minutes, AcSEC has identified certain differences between GAAP used by some airline companies and what AcSEC plans to include in its updated Airline Guide. AcSEC decided that representatives from the FASB staff and the AICPA staff should discuss this situation with the appropriate members of the SEC staff to understand the SEC staff views on implementation, preferability, auditor involvement, disclosure, etc., before AcSEC releases the updated Airline Guide for public comment.

See our minutes for a discussion of this and other topics covered at the March 20-21, 2007 meeting.

Convertible Debt -- FASB Discusses Convertible Debt with Elements of Foreign Exchange Risk and Other Matters at March 14, 2007 Meeting
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As reported in its "Action Alert" publication, the FASB met on March 14, 2007, and addressed the following projects or topics:

-Statement 133 Implementation Issue - Convertible Debt with Elements of Foreign Exchange Risk
-Agenda Decision: Valuation of Commodity Inventory
-Transfers of Financial Assets

At this meeting, the FASB decided that it would issue guidance, in the form a derivative implementation issue, relating to embedded conversion options indexed to both an entity's own stock and currency exchange rates. The FASB also decided that it would add to its agenda to consider whether Accounting Research Bulletin No. 43, Restatement and Revision of Accounting Research Bulletins, should be amended to require fair value accounting for certain nonfinancial assets with readily determinable fair values that are held in trading inventory, including traded emissions allowances.

The Action Alert also notes that the following projects or topics are scheduled to be discussed by the FASB at its March 28, 2007 meeting:

-Earnings per Share
-Conceptual Framework
-FASB Ratification of EITF decisions

Customer Loyalty Programs -- IFRIC Discusses Loyalty Programs and Other Matters at March 8-9, 2007 Meeting
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As reported in the IASB's "IFRIC Update" publication, the IFRIC met on March 8-9, 2007, and discussed the following matters:

-D19 IAS 19-The Asset Ceiling: Availability of Economic Benefits and Minimum Funding
-D20 Customer Loyalty Programs
-IAS 18 Revenue-Sales of Real Estate
-IAS 21 The Effects of Changes in Foreign Exchange Rates-The Hedge of a Net Investment in a Foreign Operation
-IAS 38 Intangible Assets-Advertising and Promotion
-IFRS 5 Non-current Assets Held for Sale and Discontinued Operations-Plan to Sell the Controlling Interest in a Subsidiary
-IFRIC Agenda Decisions
-Tentative Agenda Decisions
-Preliminary Discussion of IFRIC Issues

The IFRIC continued its redeliberation of certain issues in the draft Interpretation D20 Customer Loyalty Programs, which was previously exposed for comment. Redeliberations on the following subjects took place: (a) allocation of consideration received; (b) recognition of revenue allocated to awards; (c) awards supplied by third parties; (d) customer relationship intangible assets; (e) transitional arrangements; and (f) effective date. One of the decisions that was confirmed during these redeliberations is that expected forfeitures should be taken into consideration when measuring the fair value of all awards granted. In addition, examples will be added to illustrate how certain guidance in the interpretation should be applied. These illustrations will include examples on how an entity should: (a) recognize revenue on forfeited award credits; (b) account for changes in the estimated forfeiture rate; and (c) account for awards supplied by third parties.

The IFRIC also continued its discussions on how entities should account for training, advertising, and promotion activities. IFRIC agreed with the view that payments made for these activities should be recognized by an entity as an expense at the point in time those activities first take place rather than when the expenditure is incurred. IFRIC requested that the IASB staff reflect this view in a proposed amendment to paragraph 70 of IAS 38 Intangible Assets and present that proposed amendment to the IASB so that it can be addressed as part of the IASB's annual improvements process.

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AUDITING HEADLINES:
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SSAE Hierarchy -- Discussion and Analysis of SSAE 14
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We have added a GAAS Update Service that provides discussion and analysis of AICPA Statement on Standards for Attestation Engagements (SSAE) No. 14 entitled, SSAE Hierarchy, which establishes three levels of literature within the SSAE hierarchy: (a) attestation standards, (b) attestation interpretations, and (c) other attestation publications. SSAE 14 identifies attestation publications that practitioners are required to follow in conducting an attestation engagement and clarifies the authority of such publications. Also, this SSAE (a) amends the 11 attestation standards to conform them with the use of terms established in SSAE No. 13, Defining Professional Requirements in Statements on Standards for Attestation Engagements, and (b) establishes an attest hierarchy that is consistent with Statement on Auditing Standards (SAS) No. 95, Generally Accepted Auditing Standards. SSAE 14 is effective when the subject matter or assertion of an attestation engagement is as of or for a period ending on or after December 15, 2006.

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GOVERNMENT HEADLINES:
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Service Efforts and Accomplishments -- Discussion of GASB Project
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We have added a Governmental GAAP Update Service that summarizes and discusses the controversial GASB project on the reporting of service efforts and accomplishments (SEA) by governmental entities. The update service discusses the objectives and the scope of the project, both from the perspective of what is included in its objectives and scope as well as what is not included. For example, one of the project's objectives is developing and proposing principles-based guidelines that would help improve voluntary reporting of SEA performance information. In addition, objectives that are not part of the project's scope include: (a) establishing mandatory reporting of specific nonfinancial performance measures for state and local government services and (b) establishing target or benchmark levels of performance that should be met by government services. The update service also discusses the controversy surrounding this issue, which is primarily related to whether the GASB is going beyond the bounds of its authority in attempting to provide guidance on the reporting of SEA by governmental entities.

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