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Accounting Research Manager(TM)
Weekly Summary of Developments
April 2-6, 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

EITF Matters -- March 15, 2007 Meeting Minutes and Draft Abstract of Tentative Conclusion Issued
Disclosure Checklists -- GAAP and SEC Disclosure Checklists Updated through March 31, 2007
Earnings per Share -- FASB Addresses Earnings per Share and Other Matters at March 28, 2007 Meeting
GAAP Hierarchy -- PCAOB Proposes Standard to Remove GAAP Hierarchy from its Standards
Tax Services and Independence -- PCAOB Issues Staff Guidance and Concept Release

Auditing Headlines

Use of Electronic Confirmations -- AICPA Issues Auditing Interpretations of Section 330
GAAP Hierarchy -- PCAOB Proposes Standard to Remove GAAP Hierarchy from its Standards
Tax Services and Independence -- PCAOB Issues Staff Guidance and Concept Release

Government Headlines

GASB Report Issued -- GASB Discusses Derivatives

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ACCOUNTING AND SEC HEADLINES:
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EITF Matters -- March 15, 2007 Meeting Minutes and Draft Abstract of Tentative Conclusion Issued
For detail, please contact info@zy-cpa.com

The final minutes of the March 15, 2007 EITF meeting have been issued. The minutes document the meeting results as previously described in our hot topic dated March 28, 2007:
For detail, please contact info@zy-cpa.com

Consistent with the EITF's due process procedure, the FASB also issued for public comment the following draft abstract resulting from the tentative conclusion reached at the March 15, 2007 meeting:

-Issue No. 07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities"
For detail, please contact info@zy-cpa.com

Disclosure Checklists -- GAAP and SEC Disclosure Checklists Updated through March 31, 2007

As described in our Literature Update, we have updated our General U.S. GAAP Financial Statement Disclosures Checklist through March 31, 2007:
For detail, please contact info@zy-cpa.com

We have also updated the General U.S. GAAP Interim Financial Statement Disclosures Checklist and the Industry-Specific Disclosures Checklist: Not-for-Profit Organizations. Among other changes, the checklists were updated to incorporate the disclosure requirements included in FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities.

We have also updated the following four SEC related checklists through March 31, 2007:

-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 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. It also provides a column for users to note implementation date.

-SEC 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

Earnings per Share -- FASB Addresses Earnings per Share and Other Matters at March 28, 2007 Meeting
For detail, please contact info@zy-cpa.com

As reported in its "Action Alert" publication, the FASB met on March 28, 2007, and addressed the following projects or topics:

-Earnings per Share
-Conceptual Framework
-FASB Ratification of EITF Consensus and Tentative Conclusion

At this meeting, the FASB discussed the remaining issues that need to be addressed to achieve convergence between FASB Statement No. 128, Earnings per Share, and International Accounting Standard 33, Earnings per Share. Among the decisions reached at this meeting, the FASB decided that instruments that can be settled in cash or shares, are classified as a liability, and are marked-to-market (in their entirety) each reporting period with gains and losses recognized in earnings should no longer be subject to (a) the treasury stock method (including fully and partially vested share-based payment awards), (b) the if-converted method, or (c) the two-class method. That is, the FASB decided that the change in fair value recognized in earnings captures the dilutive effect of those instruments, eliminating the need to include such instruments in the determination of diluted earnings per share.

The Action Alert also notes that the following projects or topics are scheduled to be discussed by the FASB at its April 11, 2007 meeting:

-Conceptual Framework
-Implementation Guidance for FIN 48

At its April 11, 2007 meeting, the FASB is scheduled to discuss the comment letters received on proposed FASB Staff Position (FSP) FIN 48-a, "Definition of 'Settlement' in FASB Interpretation No. 48," and whether to approve that FSP for final issuance.

GAAP Hierarchy -- PCAOB Proposes Standard to Remove GAAP Hierarchy from its Standards
For detail, please contact info@zy-cpa.com

The PCAOB has issued a proposal, Evaluating Consistency of Financial Statements and Proposed Amendments to Interim Auditing Standards. The PCAOB is proposing changes to its auditing standards in light of the existence of FASB Statement No. 154, Accounting Changes and Error Corrections, and the FASB Exposure Draft, The Hierarchy of Generally Accepted Accounting Principles. The PCAOB's proposals would, if adopted and approved by the SEC, supersede AU Section 420, Consistency of Application of Generally Accepted Accounting Principles, with a new auditing standard; remove the hierarchy of generally accepted accounting principles from the interim auditing standards; and make conforming amendments to the interim auditing standards.

Comments on this PCAOB proposal are due May 18, 2007.

Tax Services and Independence -- PCAOB Issues Staff Guidance and Concept Release

The PCAOB staff released "Staff Questions and Answers - Ethics and Independence Rules Concerning Independence, Tax Services, and Contingent Fees":
For detail, please contact info@zy-cpa.com

This guidance was issued in the form of six questions and answers, on Rule 3522, "Tax Transactions," and Rule 3523, "Tax Services for Persons in Financial Reporting Oversight Roles." Several of the questions and answers address issues that the SEC encouraged the PCAOB to provide additional guidance on when it approved the PCAOB rules on tax services and independence. For example, this release addresses whether a registered public accounting firm can advise an audit client on the tax consequences of alternative ways of structuring a tax planning transaction.

Separately, the PCAOB issued a concept release soliciting comments regarding one aspect of Rule 3523:For detail, please contact info@zy-cpa.com

The PCAOB is seeking information about the possible effects on a firm's independence of providing tax services to a person covered by Rule 3523 during the portion of the audit period that precedes the beginning of the professional engagement period, and other practical consequences of applying the restrictions imposed by Rule 3523 to that portion of the audit period.

In addition, the PCAOB has extended the implementation schedule for Rule 3523 in order to allow sufficient time for consideration of comments on the issues raised in this concept release. Specifically, Rule 3523 will not apply to tax services provided on or before July 31, 2007, when those services are provided during the audit period and are completed before the professional engagement period begins.

Comments on the concept release are due May 18, 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

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AUDITING HEADLINES:
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Use of Electronic Confirmations -- AICPA Issues Auditing Interpretations of Section 330
For detail, please contact info@zy-cpa.com

The AICPA has issued a new auditing interpretation, "Use of Electronic Confirmations." This guidance interprets AU Section 330, The Confirmation Process. This release sets forth guidance to an auditor whether use of electronic confirmation with third parties is reliable audit evidence. The interpretation concludes if the auditor is satisfied that the electronic confirmation process is secure and properly controlled and the confirmation is directly from a third party who is a bona fide authorized respondent, electronic confirmations may be considered as sufficient, valid confirmation responses. Various means might be used to validate the sender of electronic information and the respondent's authorization to confirm the requested information. For example, the use of encryption, electronic digital signatures, and procedures to verify website authenticity may improve the security of the electronic confirmation process.

GAAP Hierarchy -- PCAOB Proposes Standard to Remove GAAP Hierarchy from its Standards
For detail, please contact info@zy-cpa.com

As discussed above in our Accounting and SEC Summaries, the PCAOB has issued a proposal, Evaluating Consistency of Financial Statements and Proposed Amendments to Interim Auditing Standards. The PCAOB is proposing changes to its auditing standards in light of the existence of FASB Statement No. 154, Accounting Changes and Error Corrections,and the FASB Exposure Draft, The Hierarchy of Generally Accepted Accounting Principles. The PCAOB's proposals would, if adopted and approved by the SEC, supersede AU Section 420, Consistency of Application of Generally Accepted Accounting Principles, with a new auditing standard; remove the hierarchy of generally accepted accounting principles from the interim auditing standards; and make conforming amendments to the interim auditing standards.

Tax Services and Independence -- PCAOB Issues Staff Guidance and Concept Release

As discussed above in our Accounting and SEC Summaries, the PCAOB staff released "Staff Questions and Answers - Ethics and Independence Rules Concerning Independence, Tax Services, and Contingent Fees":
For detail, please contact info@zy-cpa.com

This guidance was issued in the form of six questions and answers, on Rule 3522, "Tax Transactions," and Rule 3523, "Tax Services for Persons in Financial Reporting Oversight Roles." Several of the questions and answers address issues that the SEC encouraged the PCAOB to provide additional guidance on when it approved the PCAOB rules on tax services and independence. For example, this release addresses whether a registered public accounting firm can advise an audit client on the tax consequences of alternative ways of structuring a tax planning transaction.

Separately, the PCAOB issued a concept release soliciting comments regarding one aspect of Rule 3523:
For detail, please contact info@zy-cpa.com

The PCAOB is seeking information about the possible effects on a firm's independence of providing tax services to a person covered by Rule 3523 during the portion of the audit period that precedes the beginning of the professional engagement period, and other practical consequences of applying the restrictions imposed by Rule 3523 to that portion of the audit period.

In addition, the PCAOB has extended the implementation schedule for Rule 3523 in order to allow sufficient time for consideration of comments on the issues raised in this concept release. Specifically, Rule 3523 will not apply to tax services provided on or before July 31, 2007, when those services are provided during the audit period and are completed before the professional engagement period begins.

Comments on the concept release are due May 18, 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

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GOVERNMENT HEADLINES:
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GASB Report Issued -- GASB Discusses Derivatives
For detail, please contact info@zy-cpa.com

The March edition of the "GASB Report" has been issued and includes the following discussion items:

-GASB Calendar
-Comments Sought on Proposal Related to Investment Reporting by Endowments
-Board Meeting Summary
-GASAC Meets in Norwalk
-Governmental Accounting Research System Available
-Who's Who at the GASB

As documented in this edition of the GASB Report, the GASB discussed accounting for derivatives at its February 20-22, 2007 meeting. At this meeting, the GASB decided that at the inception of a hedging relationship, governments would be required to test for hedge effectiveness using each of the quantitative methods available to them in the Exposure Draft, Elements of Financial Statements, before determining that the hedging relationship is ineffective for accounting purposes. During the life of a hedging relationship, a government would be allowed to change from one quantitative measurement of effectiveness to another as long as doing so does not change the classification of the hedge from effective to ineffective. For a hedge to be classified as ineffective during its life, a government would be required to test for effectiveness using each of the available quantitative methods, and each would have to classify the hedge as ineffective. Recognizing that the proposed effectiveness testing requirement could place an additional burden on preparers, the GASB encouraged its staff to research ways of reducing the difficulty of applying regression analysis to common hedge applications. The GASB made certain other decisions on derivative accounting which are discussed in the GASB Report.

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