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Accounting Research Manager(TM)
Weekly Summary of Developments
March 26-30, 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
EITF Decisions -- FASB Ratifies EITF Consensus and Tentative Conclusion from March 15, 2007 EITF Meeting
Leases -- FASB Discusses Lease Accounting and Other Matters at March 21, 2007 Meeting
Exiting Exchange Act Registration and Reporting Obligations -- SEC Finalizes Rules for Foreign Private Issuers
Technical Amendment -- SEC Finalizes Rules Amending Regulation S-T with Respect to Mandated Electronic Submissions
AICPA Issues Audit Risk Alerts -- Interpretive Guidance Available
Borrowing Costs -- IASB Issues Amendments to IAS 23
IASB Update -- IASB Discusses Business Combinations and Other Matters at Its March 20-22, 2007 Meeting
IASB Insight Publication Issued -- IASB Issues Quarterly Newsletter Detailing Overall Agenda and Other Matters
Auditing Headlines
AICPA Issues Audit Risk Alerts -- Interpretive Guidance Available
Government Headlines
Real Estate -- GASB Proposes New Guidance
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ACCOUNTING AND SEC HEADLINES:
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EITF Decisions -- FASB Ratifies EITF Consensus and Tentative Conclusion from March 15, 2007 EITF Meeting
For detail, please contact info@zy-cpa.com
We have prepared a hot topic that documents the FASB's ratification of decisions made by the EITF at its March 15, 2007 meeting. Specifically, the FASB ratified the consensus reached in EITF issue No. 06-10, "Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements." An entity is required to apply the consensus in its first fiscal year beginning after December 15, 2007.
The FASB also ratified the tentative conclusion reached in EITF Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities." The FASB will be exposing the EITF tentative conclusion for public comment. The comment period is expected to end on May 3, 2007.
See our hot topic for complete details.
Leases -- FASB Discusses Lease Accounting and Other Matters at March 21, 2007 Meeting
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As reported in its "Action Alert" publication, the FASB met on March 21, 2007, and addressed the following projects or topics:
-Accounting for Leases
-Statement 133 Implementation Issue - Hedging Proceeds to Be Received from a Forecasted Foreign Currency Denominated Debt Issuance
-Financial Statement Presentation
-Business Combinations: Applying the Acquisition Method
-Agenda Decision: Intangible Assets
At this meeting, the FASB addressed preliminary views on its new lease project. The FASB considered a relatively simple lease transaction as follows. A company enters into a 5-year noncancelable lease of machinery that ordinarily would have a 10-year useful life. Terms of the lease are fixed, require regular payments by the lessee, and there are no rights to extend the lease term or to purchase the machinery at the end of the lease term and there is no residual value guarantee. Under this fact pattern, the FASB tentatively concluded the accounting model that should be developed by its staff is the "right-to-use" model. This model is based on the premise that once the machinery has been delivered, the lessee has a right to use that machinery during the lease term. Consequently, the lessee recognizes an asset for its right to use the machinery during the lease term and recognizes a liability for the rentals payable under the lease. Under this model, the lessor has exchanged some of its ownership rights over the machine (its right to use the machinery during the lease term) for a contractual right to receive payments under the lease. Therefore, the lessor recognizes as an asset its right to receive payments during the lease term and derecognizes a portion of the machinery in exchange for the right to receive payments over the lease term.
The FASB also decided that it would not finalize proposed Derivatives Implementation Group Issue H17, "Hedging Functional-Currency-Equivalent Proceeds to Be Received from a Forecasted Foreign-Currency-Denominated Debt Issuance." Instead, the FASB will consider at a future meeting adding a broader project to its agenda to address the application of cash flow hedging and related issues.
See the Action Alert for complete details of these activities and other FASB decisions.
Exiting Exchange Act Registration and Reporting Obligations -- SEC Finalizes Rules for Foreign Private Issuers
For detail, please contact info@zy-cpa.com
On March 27, 2007, the SEC issued a release adopting amendments to the rules that allow a foreign private issuer to exit the Exchange Act reporting system. The new rule (Rule 12h-6) will permit a foreign private issuer to terminate its Exchange Act registration and reporting obligations regarding a class of equity securities, assuming it meets the various conditions in the rule. To qualify for this rule, an issuer must also demonstrate that share trading volume in the U.S. of its securities is not significant when compared with trading volume throughout the world. The rule amendments will become effective 60 days after publication in the Federal Register.
Technical Amendment -- SEC Finalizes Rules Amending Regulation S-T with Respect to Mandated Electronic Submissions
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The SEC adopted amendments to Regulation S-T to clarify that a filing submitted on an electronic filing system other than the EDGAR system is not a mandated submission under Regulation S-T and to clarify that filers who submit forms on EDGAR for review by the Division of Market Regulation are subject to the requirements of Regulation S-T. The SEC also amended its Rules of Organization and Program Management to delegate authority to the Director of the Division of Market Regulation to adjust the filing date of an electronic submission and to grant or deny a continuing hardship exemption from electronic filing under Regulation S-T. These changes are effective April 27, 2007.
AICPA Issues Audit Risk Alerts -- Interpretive Guidance Available
The AICPA has issued the following Audit Risk Alerts:
-Insurance Industry Developments - 2006/2007
For detail, please contact info@zy-cpa.com
-Health Care 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 these industries.
Borrowing Costs -- IASB Issues Amendments to IAS 23
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The IASB has issued a revised version of IAS 23, Borrowing Costs. In this standard, the IASB concludes that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset should be capitalized as a part of the cost of the asset. This standard prohibits the immediate expensing of such costs as currently permitted under existing IAS 23. The effective date of this standard is annual periods beginning on or after January 1, 2009, with early adoption permitted. The IASB notes that the accounting prescribed in this standard moves international accounting on this issue closer to U.S. GAAP, as prescribed by FASB Statement No. 34, Capitalization of Interest Cost, although some differences will exist.
IASB Update -- IASB Discusses Business Combinations and Other Matters at Its March 20-22, 2007 Meeting
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As reported in its "IASB Update" publication, the IASB met on March 20-22, 2007, and discussed the following projects or topics:
-Financial Statement Presentation
-Business Combinations (Phase II)
-Annual Improvements Process
-Conceptual Framework
-Leases
-Financial Instruments
-Post-Employment Benefits
-IAS 37 Redeliberations
-Update on IFRIC Activities
-IAS 33 Earnings per Share
-Technical Plan
IASB Insight Publication Issued -- IASB Issues Quarterly Newsletter Detailing Overall Agenda and Other Matters
For detail, please contact info@zy-cpa.com
In this edition of the IASB's "Insight" publication, the following topics are discussed:
-News
-IASB Work Plan
-Project Updates
-Education
-Staff Changes
There is extensive discussion in this edition of the IASB Insight publication on the status of convergence of accounting under U.S. GAAP and accounting standards developed by the IASB. This publication discusses the status of projects and presents an estimated time frame for convergence. In addition, this publication has an extensive discussion on the recent proposal by the IASB to allow for different GAAP for "Small and Medium-sized 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:
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AUDITING HEADLINES:
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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:
-Insurance Industry Developments - 2006/2007
For detail, please contact info@zy-cpa.com
-Health Care 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 these industries.
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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Real Estate -- GASB Proposes New Guidance
For detail, please contact info@zy-cpa.com
The GASB has issued an Exposure Draft (ED), Land and Other Real Estate Held As Investments by Endowments. This proposal relates to the reporting of land and other real estate investments by permanent and term endowments, including permanent funds. Current accounting standards require these entities to report such investments at historical cost, although other entities that exist for the purpose of generating income - such as pension plans - report them at estimated fair value.
As provided in the ED, affected entities would report their land and other real estate investments at fair value. Governments would also be required to report the changes in fair value as investment income and to disclose the methods and significant assumptions employed to determine fair value, as well as other information that they currently present for other investments reported at fair value.
As proposed, the provisions in the ED would be effective for financial statements for periods beginning after June 15, 2008.
Comments on this proposal are due June 29, 2007.
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