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Accounting Research Manager(TM)
Weekly Summary of Developments
October 29 - November 2, 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
FASB Codification -- FASB Plans to Release Codification of Accounting Standards for Public Verification
Fair Value Accounting -- Overview of FASB Statements 157 and 159 Added
Financial Instruments and Market Risk Disclosures -- SEC Practice Guidance Updated and Expanded
SEC Regulations Committee -- Meeting Discussion Documents Published
FASB Report Issued -- International Convergence and Other Matters Discussed
Accounting for Income Taxes -- FASB to Discuss Deferral of FIN 48 for Nonpublic Companies
PCAOB Standing Advisory Group Meeting -- Minutes of the October 18, 2007 Meeting
Risk Alerts -- AICPA Issues Audit Risk Alerts Including SEC/PCAOB Alert and a Health Care Industry Alert
Auditing and Internal Controls Headlines
PCAOB Standing Advisory Group Meeting -- Minutes of the October 18, 2007 Meeting
Attestation Engagements -- AICPA Issues Statement of Position
Risk Alerts -- AICPA Issues Audit Risk Alerts Including SEC/PCAOB Alert and a Health Care Industry Alert
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ACCOUNTING AND SEC HEADLINES:
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FASB Codification -- FASB Plans to Release Codification of Accounting Standards for Public Verification
For detail, please contact info@zy-cpa.com
As reported in our Hot Topic, over the past few years, the FASB, together with its staff and other specialists, have been working on a project that would codify (by topic) all of the existing standards issued by a standard-setter within the levels A through D of the current generally accepted accounting principles (GAAP) hierarchy. As planned, once the final version is approved by the FASB, it will become the single source of authoritative U.S. GAAP and it will supersede all existing literature issued by the FASB, the AICPA and the EITF. It will not include GAAP promulgated by the GASB; however, certain material issued by the SEC or its staff, will be separately reflected.
The FASB plans to release the FASB Accounting Standards CodificationTM (Codification) in late-2007 or early-2008 for verification by constituents. The FASB will make the Codification available to constituents without charge for a one-year period through a web-based research system to solicit feedback on whether the Codification accurately reflects existing U.S. GAAP for nongovernmental entities. Once the FASB addresses constituent comments received during the planned one-year verification phase, the Codification must be approved by the FASB before it becomes effective.
See our Hot Topic for complete details, including a list of accounting standards expected to be included in the Codification.
Fair Value Accounting -- Overview of FASB Statements 157 and 159 Added
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We have published an overview to FASB Statement No. 157, Fair Value Measurements, and FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This overview may be helpful as entities begin the process of adopting these standards. Statement 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The overview also includes illustrative examples of the application of certain provisions of Statement 157 and 159.
Financial Instruments and Market Risk Disclosures -- SEC Practice Guidance Updated and Expanded
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We have updated and expanded both, Financial Instruments (including Derivatives and Hedging) within Chapter 10 of SEC Practice, and Quantitative and Qualitative Disclosures About Market Risk within Chapter 7 of SEC Practice. These sections consolidate views expressed by the SEC Staff on specific topics within each of the respective areas. The SEC staff periodically provides its views by means of speeches, specific accounting and disclosure publications, joint meetings with the SEC Regulations Committee and Staff Accounting Bulletins (SABs). Among the topics covered within these updated sections are the following:
-Applicability and scope of the SEC's market risk disclosure requirements;
-Specific required disclosures about market risk, including quantitative and qualitative disclosures and three presentation alternative forms: (a) tabular; (b) sensitivity analysis; and (c) value-at-risk (VAR);
-A discussion of other types of market risks not specifically required by the SEC's rules, but which a registrant may want to disclose;
-Guidance on making market risk disclosures in interim periods;
-Requirements regarding market risk disclosures and accounting policy footnote disclosures;
-Guidance for registrants using fair value measurements, including the importance of quality in methods used to measure fair value;
-Guidance related to derivative and hedging activities, including a discussion of formal hedge designation, using statistical techniques to assess hedge effectiveness, when using the shortcut method of assessing hedge effectiveness is appropriate, and related financial presentation and disclosure requirements; and
-Discussion of SEC staff views on other specific financial instruments, including forecasted transactions, embedded derivatives, written options, and those associated with oil and gas producing activities.
See our Literature Update for complete details.
SEC Regulations Committee -- Meeting Discussion Documents Published
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We have added discussion documents from the latest SEC Regulations Committee meeting held on October 11, 2007 covering the following topics:
-"Assessing the Age of Financial Statement Requirements Relating to an Acquired/To Be Acquired Business When the Registrant and the Acquiree Have Different Fiscal Year-Ends";
-"Financial Information Required in Registration Statements When there are Retrospective Accounting Changes as a Result of Eventual Adoption of Proposed FASB Staff Position APB 14-a";
-"Application of Rule 3-05(b)(3) of Regulation S-X Regarding Financial Statements Used to Measure Significance When an Acquired or to be Acquired Business Is a Successor to a Predecessor Company";
-"Application of Rules 3-10 and 3-16 of Regulation S-X to Automatic Shelf Registration Statements"; and
-"Application of Rules 3-09 and 4-08(g) of Regulation S-X to Investments Accounted for Using the Fair Value Option under SFAS No. 159 that Otherwise Would be Accounted for Under the Equity Method under APB 18."
FASB Report Issued -- International Convergence and Other Matters Discussed
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The September 2007 edition of the "FASB Report" has been issued and includes discussion of the following topics or items of interest:
-A Step Forward for International Convergence: FASB and IASB Completing Joint Project on Business Combinations;
-Teresa Polley Appointed Interim Chief Operating Officer of the Financial Accounting Foundation;
-Jim Leisenring Celebrates 25 Years of Standard-Setting;
-Who's News; and
-FASB at the Podium.
The Report discusses the significance that the forthcoming release of a joint standard by the FASB and IASB on accounting for business combinations has on standard setting convergence efforts. The joint standard will converge and the Boards believe will simplify the accounting for business combinations internationally while providing investors with more comparable, high-quality financial information. Companies will be required to start applying the standard for acquisitions taking place in fiscal years beginning after December 15, 2008.
Accounting for Income Taxes -- FASB to Discuss Deferral of FIN 48 for Nonpublic Companies
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As reported in its "Action Alert" publication, at its November 7, 2007 meeting, the FASB will discuss whether to add a project to its agenda to defer the effective date of FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes, for nonpublic entities and whether guidance should be issued for pass-through entities. The FASB will also discuss a fair value hedging approach to accounting for hedging activities in the context of cash flow hedges under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities.
The Action Alert also indicates that the FASB and the IASB (the "Boards") held a joint meeting October 22-23, 2007, and addressed the following projects or topics:
-Financial statement presentation;
-Conceptual framework: objectives and qualitative characteristics;
-Conceptual framework: elements and recognition;
-Revenue recognition; and
-Accounting principles for derecognizing financial assets.
The Boards decided that a "Preliminary Views" document for its Financial Statement Presentation project would be published in the second quarter of 2008.
PCAOB Standing Advisory Group Meeting -- Minutes of the October 18, 2007 Meeting
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As described in our minutes of the PCAOB Standing Advisory Group meeting held on October 18, 2007, the more significant topics of discussion at this meeting related to the following: (a) standards-setting activities, (b) audit implications for financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"), and (c) changes in market responses to the restatement of financial statements in the Sarbanes-Oxley era.
Risk Alerts -- AICPA Issues Audit Risk Alerts Including SEC/PCAOB Alert and a Health Care Industry Alert
The AICPA has issued the following four 2007/2008 Audit Risk Alerts:
-SEC/PCAOB Alert;
For detail, please contact info@zy-cpa.com
-Health Care Industry Developments;
For detail, please contact info@zy-cpa.com
-Government Auditing Standards and Circular A-133 Audits;
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-Bank, Credit Union, and Other Depository and Lending Institution Industry Developments.
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AICPA Audit Risk Alerts provide users with a detailed overview of recent industry, technical, regulatory, or professional developments. Topics covered in each Alert include: (a) legislative and regulatory activities (SEC, PCAOB, and other government agencies); (b) economic and industry developments or trends; (c) recent auditing and attestation pronouncements and related guidance; (d) recent AICPA independence and ethics pronouncements; and (e) future or emerging issues to monitor. In addition, each Alert includes a "Resources Central" section listing resources practitioners may find useful.
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 AND INTERNAL CONTROLS HEADLINES:
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PCAOB Standing Advisory Group Meeting -- Minutes of the October 18, 2007 Meeting
For detail, please contact info@zy-cpa.com
As discussed above in our Accounting and SEC Summaries, in our minutes of the PCAOB Standing Advisory Group meeting held on October 18, 2007, the more significant topics of discussion at this meeting related to the following: (a) standards-setting activities, (b) audit implications for financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"), and (c) changes in market responses to the restatement of financial statements in the Sarbanes-Oxley era.
Attestation Engagements -- AICPA Issues Statement of Position
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The AICPA has issued Statement of Position (SOP) 07-2, Attestation Engagements That Address Specified Compliance Control Objectives and Related Controls at Entities That Provide Services to Investment Companies, Investment Advisers, or Other Service Providers. SOP 07-2 represents interpretive guidance regarding the application of Statements on Standards for Attestation Engagements (SSAE) primarily to examination engagements in which a practitioner reports on the suitability of the design and operating effectiveness of a service provider's controls in achieving specified compliance control objectives. Specifically, the SOP includes guidance covering the following areas:
-Objective and subject matter of the examination engagement;
-Management's responsibilities;
-Measurement criteria;
-Practitioner's responsibilities;
-Matters addressed by the compliance control objectives;
-Evaluating control deficiencies;
-Management assertions and representation;
-Reporting; and
-Agreed upon procedures.
The SOP also includes illustrative examples of practitioner's examination reports, management's assertions, compliance control objectives, and agreed upon procedures. The SOP is effective October 15, 2007 (date of issuance).
Risk Alerts -- AICPA Issues Audit Risk Alerts Including SEC/PCAOB Alert and a Health Care Industry Alert
As discussed above in our Accounting and SEC Summaries, the AICPA has issued the following four 2007/2008 Audit Risk Alerts:
-SEC/PCAOB Alert;
For detail, please contact info@zy-cpa.com
-Health Care Industry Developments;
For detail, please contact info@zy-cpa.com
-Government Auditing Standards and Circular A-133 Audits;
For detail, please contact info@zy-cpa.com
-Bank, Credit Union, and Other Depository and Lending Institution Industry Developments.
For detail, please contact info@zy-cpa.com
AICPA Audit Risk Alerts provide users with a detailed overview of recent industry, technical, regulatory, or professional developments. Topics covered in each Alert include: (a) legislative and regulatory activities (SEC, PCAOB, and other government agencies); (b) economic and industry developments or trends; (c) recent auditing and attestation pronouncements and related guidance; (d) recent AICPA independence and ethics pronouncements; and (e) future or emerging issues to monitor. In addition, each Alert includes a "Resources Central" section listing resources practitioners may find useful.
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