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Accounting Research Manager(TM)
Weekly Summary of Developments
November 5-9, 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
Accounting for Income Taxes -- FASB Agrees to Defer Effective Date in FIN 48 for Nonpublic Companies
Fair Value Measurements -- FASB to Discuss Alternatives for Deferral of Statement 157 and Other Matters at its November 14, 2007 Meeting
Written Loan Commitments -- SEC Staff Issues Staff Accounting Bulletin No. 109
PCAOB Inspections -- SEC Approves Amendments to PCAOB Inspection Rules
EDGAR Filing System -- SEC Proposes Mandatory Electronic Submission of Certain Investment Company Act Applications
Collaborative Arrangements -- EITF Materials Issued for the November 29, 2007 EITF Meeting
International Financial Reporting -- IASB Issues Agenda for the Standards Advisory Council (SAC) Meeting on November 8-9, 2007
Auditing and Internal Controls Headlines
Management Letter Comments -- Updated Edition Released
GAAS Practice Manual -- Updated Edition Released
PCAOB Inspections -- SEC Approves Amendments to PCAOB Inspection Rules
Government Headlines
Governmental Practice Manual -- Updated Edition Released
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ACCOUNTING AND SEC HEADLINES:
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Accounting for Income Taxes -- FASB Agrees to Defer Effective Date in FIN 48 for Nonpublic Companies
For detail, please contact info@zy-cpa.com
As reported in our Hot Topic on November 7, 2007, the FASB agreed to defer the effective date in FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes, for nonpublic companies. FIN 48 was issued in July 2006, and had an effective date of years beginning after December 15, 2006 (2007 for most nonpublic entities). The FASB approved a one-year deferral until periods beginning after December 15, 2007 for nonpublic companies. This deferral does not apply to those nonpublic companies that have already adopted FIN 48. The formal deferral extension will be set forth in a FASB Staff Position, that will be issued in exposure form for a 30-day comment period.
See our Hot Topic for complete details.
Fair Value Measurements -- FASB to Discuss Alternatives for Deferral of Statement 157 and Other Matters at its November 14, 2007 Meeting
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As reported in its "Action Alert" publication, at its November 14, 2007 meeting, the FASB will discuss alternatives for a deferral of the effective date of FASB Statement No. 157, Fair Value Measurements. The FASB will also discuss whether to add a separate project to its agenda to address certain issues on the application of Statement 157. In addition, the FASB is expected to discuss the following items at its November 14, 2007 meeting: (a) alternatives to be included in an initial discussion document on the FASB's financial statement presentation project and (b) constituent concerns raised regarding proposed FASB Staff Position (FSP) FAS 140-d, "Accounting for Transfers of Assets and Repurchase Financing Transactions."
The Action Alert also indicates that the FASB held a meeting October 31, 2007, and addressed the following projects or topics:
-Financial statement presentation;
-Valuation of nonfinancial assets and emission allowances that are acquired for resale; and
-Agenda decision: not-for-profit endowment.
Written Loan Commitments -- SEC Staff Issues Staff Accounting Bulletin No. 109
For detail, please contact info@zy-cpa.com
The SEC staff has issued SEC Staff Accounting Bulletin (SAB) No. 109, "Written Loan Commitments Recorded at Fair Value through Earnings." This SAB reflects the SEC staff's views regarding written loan commitments that are accounted for at fair value through earnings and supersedes SAB No. 105, "Application of Accounting Principles to Loan Commitments." Specifically, SAB 109 includes guidance on: (a) incorporating expected net future cash flows when related to the associated servicing of a loan when measuring fair value and (b) broadens the SEC staff's view that internally-developed intangible assets should not be recorded as part of the fair value of a derivative loan commitment or to written loan commitments that are accounted for at fair value through earnings.
SAB 109 is generally effective on the date of issuance, November 5, 2007. However, the guidance on the use of expected net future cash flows when measuring the fair value of a derivative loan commitment is effective on a prospective basis to derivative loan commitments issued or modified in fiscal quarters beginning after December 15, 2007.
PCAOB Inspections -- SEC Approves Amendments to PCAOB Inspection Rules
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The SEC issued an order formally approving the PCAOB's proposed rule amendments to its inspections of registered audit firms. The amendments add a new paragraph (d) to Rule 4003, Frequency of Inspections, that temporarily adjusts aspects of the PCAOB's inspection cycle requirement. Under the amendments, an audit firm that became registered in 2003 or 2004 is not subject to:
-First inspection sooner than the fourth year after the firm, while registered, first issues an audit report or plays a substantial role; and
-Second inspection sooner than the fifth year after the firm, while registered, first issues an audit report or plays a substantial role.
The PCAOB still retains the discretion to inspect any registered audit firm at any time. The amendments also include minor technical amendments to existing Rule 4006, Duty to Cooperate with Inspectors and Rule 4009, Firm Response to Quality Control Defects.
EDGAR Filing System -- SEC Proposes Mandatory Electronic Submission of Certain Investment Company Act Applications
For detail, please contact info@zy-cpa.com
The SEC has issued for public comment a proposal, Mandatory Electronic Submission of Applications for Orders under the Investment Company Act and Filings Made Pursuant to Regulation E. If adopted, the proposal would amend Regulation S-T to make mandatory the electronic submission on the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system of applications for orders under any section of the Investment Company Act of 1940 (the "Act") and Regulation E filings. Regulation E provides exemption from the registration of securities issued by small business investment companies and business development companies registered under the Act. Currently, applications under the Act or Regulation E are submitted in paper form and only available from the SEC's public reference room or electronically from private services. In addition, the proposal would make the temporary hardship exemption unavailable for submission of applications under the Act and eliminate certain requirements that applications be notarized upon submission since such submissions would be electronic.
Comments on the proposal are due December 14, 2007.
Collaborative Arrangements -- EITF Materials Issued for the November 29, 2007 EITF Meeting
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The FASB has issued the following additional materials for the EITF meeting scheduled for November 29, 2007:
-Issue No. 07-1, "Accounting for Collaborative Arrangements" (Comment Letters)
-Revised Proposed Meeting Agenda
The EITF plans to discuss comment letters received from constituents regarding EITF Issue 07-1 which addresses the accounting for collaborative arrangements, such as those to jointly develop and commercialize intellectual property. Collaborative arrangements present unique accounting issues, including how cost incurred and revenue generated should be reported by the participants, characterization of payments made between participants of the collaborative arrangements and what disclosures should be made about a collaborative arrangement. A consensuses-for-exposure was reached at the EITF meeting on September 11, 2007.
International Financial Reporting -- IASB Issues Agenda for the Standards Advisory Council (SAC) Meeting on November 8-9, 2007
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The IASB has issued the agenda for the SAC's November 8-9, 2007 meeting when it is scheduled to discuss the following projects or topics:
-Trustees' Update
-Discussion of IASB work program and convergence
-Financial statement presentation
-Agenda proposals
-Fair value measurement
-Revenue recognition
-Insurance
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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Management Letter Comments -- Updated Edition Released
For detail, please contact info@zy-cpa.com
We have published the 2008 edition of CPA's Guide to Management Letter Comments. This publication is a comprehensive resource that provides users with vital information on the preparation of management letter comments, including: (a) hundreds of management letter comment examples for numerous real-life situations involving all critical areas generally encountered during an audit; (b) suggestions and examples related to the opening and closing paragraphs of the management letter; and (c) suggestions and examples on related communications with audit committees. This publication can be used during the actual preparation of the management letter as well as an efficient review document for use in brainstorming for other effective and useful comments that apply to a client's situation.
GAAS Practice Manual -- Updated Edition Released
For detail, please contact info@zy-cpa.com
We have published the 2008 edition of the GAAS Practice Manual. The primary objective of the manual is to provide the practitioner with a comprehensive and quick reference source for currently effective AICPA pronouncements of Statements on Auditing Standards (SAS), Statements on Standards for Attestation Engagements (SSAE), Statements on Standards for Accounting and Review Services (SSARS), and interpretations of these standards. The manual provides answers to over 600 frequently asked questions on how to implement the standards and over 350 illustrations (including checklists and other practice aids) to clarify application of and compliance with the standards. The manual also features various efficiency and effectiveness practice tips to help the practitioner better plan and execute accounting, auditing, and attest engagements and to quickly integrate the standards into practice.
In addition, the manual includes coverage of PCAOB final auditing standards. The discussion, illustrations, and examples (e.g., auditor's reports) included within the manual have been updated, where applicable, to incorporate the guidance and requirements of the PCAOB.
PCAOB Inspections -- SEC Approves Amendments to PCAOB Inspection Rules
For detail, please contact info@zy-cpa.com
As discussed above in our Accounting and SEC Summaries, the SEC issued an order formally approving the PCAOB's proposed rule amendments to its inspections of registered audit firms. The amendments add a new paragraph (d) to Rule 4003, Frequency of Inspections, that temporarily adjusts aspects of the PCAOB's inspection cycle requirement. Under the amendments, an audit firm that became registered in 2003 or 2004 is not subject to:
-First inspection sooner than the fourth year after the firm, while registered, first issues an audit report or plays a substantial role; and
-Second inspection sooner than the fifth year after the firm, while registered, first issues an audit report or plays a substantial role.
The PCAOB still retains the discretion to inspect any registered audit firm at any time. The amendments also include minor technical amendments to existing Rule 4006, Duty to Cooperate with Inspectors and Rule 4009, Firm Response to Quality Control Defects.
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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Governmental Practice Manual -- Updated Edition Released
For detail, please contact info@zy-cpa.com
We have published the 2008 edition of the Governmental GAAP Practice Manual. The emphasis of this publication is on the process of preparing financial statements. As such, this publication describes how to apply GASB Statements, GASB Interpretations, GASB Technical Bulletins, NCGA Statements, NCGA Interpretations, and more, with a special emphasis on applying GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments. This publication includes plain-English explanations and numerous examples, including a "Worksheet Conversion Entry Checklist" that takes the numerous transactions that governmental entities experience that are initially recorded on the modified accrual basis (for presentation in the fund financial statements) and converts them to the accrual basis (for presentation in the government-wide financial statements).
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