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Accounting Research Manager(TM)
Weekly Summary of Developments
January 14-18, 2008
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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 Releases Codification of Accounting Standards for Public Verification
Financial Guarantee Insurance -- FASB Discussed Financial Guarantee Insurance and Other Matters at January 9, 2008 Meeting
International Accounting -- Foreign Private Issuers Filing Prior to March 4, 2008 Should Consult SEC Staff
International Accounting -- SEC Chairman Cox Speaks about International Initiatives
EITF Materials Issued -- Agenda Committee Report Released for March 12, 2008 EITF Meeting
Inflation Rates -- Interpretation Issued, Inflation Rates for Judging Whether an Economy Is Highly Inflationary - December 2007
Pension and Profit Sharing -- Guidance in Our Interpretations Updated
Pensions and Other Postretirement Benefits -- Guidance in Our Publication "Accounting Standards" Updated
Share-based Payment -- IASB Issues Amendment to IFRS 2
Distributions of Non-cash Assets to Owners -- IASB Issues Draft IFRIC Interpretation
Customer Contributions -- IASB Issues Draft IFRIC Interpretation
International Financial Reporting -- IASB Issues Agenda for January Meeting
Auditing and Internal Controls Headlines
Engagement Standards -- Guidance Added on Risk Assessment Standards
Government Headlines
GASB Report Issued -- FAF Proposed Governance Changes and Other Matter
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ACCOUNTING AND SEC HEADLINES:
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FASB Codification -- FASB Releases Codification of Accounting Standards for Public Verification
For detail, please contact info@zy-cpa.com
We have prepared a hot topic that discusses the FASB's release of its Accounting Standards CodificationTM (Codification) for verification by constituents. During a one-year verification period, the Codification is available to constituents without charge through a web-based research system to provide feedback on whether it accurately reflects existing U.S. GAAP for nongovernmental entities.
As reported in our hot topic, over the past few years the FASB, together with its staff and other specialists, has been working on a project to codify (by topic) U.S. generally accepted accounting principles (U.S. GAAP). The Codification is not intended to change existing U.S. GAAP, but rather integrates existing accounting standards by multiple standard-setters within levels A through D of the current GAAP hierarchy. In addition, the Codification includes relevant portions of authoritative content issued by the SEC and selected SEC staff interpretations and administrative guidance. The Codification excludes other guidance from the SEC, including Current Issues and Rulemaking Projects (CIRPs), SEC staff speeches, and testimony. Pronouncements from the IASB are also excluded from the Codification.
Once the FASB addresses comments received during the one-year verification phase, the Codification must be approved by the FASB before it becomes effective. The FASB expects to release the final version of the Codification in the first half of 2009.
See our hot topic for complete details.
Financial Guarantee Insurance -- FASB Discussed Financial Guarantee Insurance and Other Matters at January 9, 2008 Meeting
For detail, please contact info@zy-cpa.com
As reported in its "Action Alert" publication, the FASB met on January 9, 2008, and discussed the following issues:
-Financial guarantee insurance; and
-Not-for-profit endowments.
The FASB continued redeliberations of its Exposure Draft (ED), Accounting for Financial Guarantee Insurance Contracts, and decided:
-An insurance enterprise should recognize an asset for the premium receivable and a liability for the unearned premium revenue at inception of a financial guarantee insurance contract when premiums are received in installments;
-An enterprise can use prepayment assumptions to determine an expected term of a financial guarantee insurance contract when there is a large number of similar assets underlying an insured obligation and the prepayments are probable and can be reliably estimated. Adjustments for subsequent changes in those prepayment assumptions would be on a prospective basis. In all other instances, contractual terms would be used;
-The discount rate to be used to measure the premium receivable (asset) and the unearned premium revenue (liability) is the risk-free rate. The risk-free rate is updated only for a change in estimate; and
-Prescriptive guidance on the display of the accretion of the premium receivable (asset) in the income statement will not be provided.
The Action Alert also indicates that the FASB is scheduled to have a meeting on January 23, 2008, and plans to address the following projects or topics:
-Earnings per share; and
-Accounting for trading inventory.
International Accounting -- Foreign Private Issuers Filing Prior to March 4, 2008 Should Consult SEC Staff
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The SEC issued a final rule allowing foreign private issuers (FPIs) to file financial statements with the Commission prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the IASB, without reconciliation to U.S. GAAP. The final rule is effective March 4, 2008.
The SEC staff has issued an advisory to FPIs that until this new rule is effective the issuers are subject to the existing rules regarding the inclusion of U.S. GAAP information in filings with the Commission. However, the SEC staff is aware that some FPIs with a fiscal year ending after November 15, 2007 that prepare their financial statements using IFRS, as issued by the IASB, will want to file their annual report or financial statements in a filing under the Securities Exchange Act of 1934 before March 4, 2008. FPIs wanting to exclude U.S. GAAP information from these pre-effective-date filings are encouraged to contact the staff in the SEC's Division of Corporation Finance to discuss this issue and(or) request relief.
International Accounting -- SEC Chairman Cox Speaks about International Initiatives
For detail, please contact info@zy-cpa.com
We have published a speech by Christopher Cox, Chairman of the SEC. Mr. Cox discusses globalization and the growing need for governments across the globe to cooperate on rulemaking efforts. In his speech, Mr. Cox highlights several ongoing initiatives by the SEC toward the goal of greater international regulatory cooperation, including:
-Coordination of enforcement efforts;
-Acceptance of IFRS prepared financial statements;
-International training in securities regulation;
-Mutual recognition of regulation by foreign securities regulators; and
-eXtensible Business Reporting Language (XBRL).
EITF Materials Issued -- Agenda Committee Report Released for March 12, 2008 EITF Meeting
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The FASB has issued the Agenda Committee Report relating to the EITF meeting scheduled for March 12, 2008. This report contains the proposed issue items that the EITF Agenda Committee considered adding to the EITF's agenda. The Agenda Committee decided to add new issues to the EITF's agenda on:
-Clarifying whether Issue 98-5 is applicable to instrument features that provide for a fixed payoff, which may be settled in shares, if the instrument is not within the scope of FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity;
-Whether transition guidance in Issue 98-5 is needed;
-Revenue recognition for arrangements that provide for multiple payment streams for a single deliverable or a single unit of accounting (multiple deliverables that cannot be separated for recognition purposes); and
-How the lessor of an airline should account for revenue related to planned major maintenance when it has concluded that a capacity purchase agreement (as defined) contains a lease.
In addition, the Agenda Committee decided against adding new issues to the EITF's agenda on:
-Determining the measurement date for equity instruments that are issued to non-employees for acquiring, or in conjunction with selling, goods or services;
-Consideration of various open issues not yet addressed in EITF Issue No. 00-27, "Application of Issue No. 98-5 to Certain Convertible Instruments";
-Codification of the guidance in Issue 00-27 and EITF Issue No. 98-5, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios"; and
-Determining whether a money market fund is designated to create and pass along interest rate risk for purposes of applying FASB Interpretation (FIN) No. 46(Revised), Consolidation of Variable Interest Entities.
Inflation Rates -- Interpretation Issued, Inflation Rates for Judging Whether an Economy Is Highly Inflationary - December 2007
For detail, please contact info@zy-cpa.com
Our Interpretation, Inflation Rates for Judging Whether an Economy Is Highly Inflationary - December 2007, has been issued and reflects the latest available inflation rate information. We did not make any changes since our September 2007 update.
We continue to identify those countries that are unusually slow in reporting their inflation rates. This may require further analysis by users of this Interpretation.
Pension and Profit Sharing -- Guidance in Our Interpretations Updated
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We have updated various guidance in our Pension and Profit Sharing Plans Interpretations. These interpretations were updated primarily to reflect the following:
-Issuance of FASB Statement No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans;
-The consensus in EITF Issue No. 03-4, "Determining the Classification and Benefit Attribution Method for a 'Cash Balance' Pension Plan," on whether a certain type of cash balance plan is a defined benefit plan and which attribution method should be used for such plan;
-Issuance of FASB Staff Position (FSP) FAS 106-2 (As Amended), "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, -Improvement and Modernization Act of 2003," that provides guidance on how the Medicare Prescription Drug, Improvement and Modernization Act of 2003 impacts an employer's accounting and disclosure for postretirement benefit plans other than pensions; and
-Various views of the SEC staff including determining and disclosing the appropriate discount rate for a plan; required disclosures for public companies for defined benefit pension plans, beyond those required by FASB Statement No. 132 (Revised), Employers' Disclosures about Pensions and Other Postretirement Benefits.
See our Literature Update for complete details.
Pensions and Other Postretirement Benefits -- Guidance in Our Publication "Accounting Standards" Updated
For detail, please contact info@zy-cpa.com
We have updated various subsections of our Accounting Standards to reflect the issuance of FASB Statement No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans. Specifically, the following subsection have been updated:
-Measurement of Plan Assets;
-Measurement of Net Benefit Costs;
-Recognition of Liabilities and Assets;
-Measurement Dates;
-Business Combinations;
-Curtailment of a Plan;
-Settlement of Plan Obligations; and
-Disclosures.
Share-based Payment -- IASB Issues Amendment to IFRS 2
For detail, please contact info@zy-cpa.com
The IASB has issued an amendment to IFRS 2, Share-based Payment. The amendment clarifies that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. In addition, the amendment also provides that all cancellations, whether by the issuer or other parties, should receive the same accounting. The amendment is effective for annual periods beginning on or after January 1, 2009. Early adoption is permitted.
Distributions of Non-cash Assets to Owners -- IASB Issues Draft IFRIC Interpretation
For detail, please contact info@zy-cpa.com
The International Financial Reporting Interpretations Committee (IFRIC) has issued for public comment Draft Interpretation D23, Distributions of Non-cash Assets to Owners. The Interpretation provides guidance on accounting for distributions of assets other than cash when dividends are paid to owners acting in their capacity as owners. Specifically, the Interpretation addresses the: (a) measurement of an obligation to distribute non-cash assets to its owners (a dividend payable); and (b) accounting for differences between the carrying amount of assets distributed and the carrying amount of the obligation when settling a dividend payable. Distributions between entities within the same consolidated group would be excluded from the scope of the Interpretation.
Comments on this proposal are due April 25, 2008.
Customer Contributions -- IASB Issues Draft IFRIC Interpretation
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The IFRIC has issued for public comment Draft Interpretation D24, Customer Contributions. The Interpretation provides guidance on accounting for customer contributions that are transactions in which a party receives an asset it uses to provide goods or services to a customer. Specifically, the Interpretation addresses the following areas:
-Whether a customer contribution should be recognized as an asset and, if so, whether it should be initially recognized at cost or fair value;
-Whether an agreement to provide ongoing services using a contributed asset contains a lease;
-How to account for the credit that arises from the recognition of a customer contribution at fair value; and
-How to account for a cash contribution.
Comments on this proposal are due April 25, 2008.
International Financial Reporting -- IASB Issues Agenda for January Meeting
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The IASB will discuss the following agenda items at its January 22-24, 2008 meeting:
-Annual Improvements Process;
-Financial Instruments;
-IFRIC Update;
-Insurance (education session);
-Liabilities & Equity;
-Related Party Disclosures;
-Revenue Recognition; and
-Short-term Convergence: Earnings per Share.
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 AND INTERNAL CONTROLS HEADLINES:
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Engagement Standards -- Guidance Added on Risk Assessment Standards
For detail, please contact info@zy-cpa.com
We have updated various sections of the "Audit Engagements" chapter of Engagement Standards to reflect AICPA Risk Assessment Standards, which consist of eight Statements on Auditing Standards (SASs) relating to the auditor's risk assessment process (SAS-104 through SAS-111), as well as three subsequent, but related SASs, SAS-112 through SAS-114. Changes have been made throughout "Audit Engagements," including the addition of two sections: (1) "Audit Planning and Performance - Risk Assessment Procedures: Understanding the Entity and Its Environment" and (2) "Audit Planning and Performance - Performing Audit Procedures in Response to Assessed Risks."
In addition, the new Knowledge-Based Audit (KBA) documents audit programs, practice aids, correspondence, and example reports, which incorporate the requirements of the Risk Assessment Standards, have been referenced throughout the chapter. We have also added references and links throughout the chapter regarding PCAOB Auditing Standard No. 5, An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments. Other relevant AICPA Practice Alerts links have also been added for additional guidance.
See our Literature Update for complete details.
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 -- FAF Proposed Governance Changes and Other Matters
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The December edition of the "GASB Report" has been issued and includes the following discussion items:
-GASB Calendar;
-Increasing Effectiveness in a Changing Environment: Constituents Asked to Provide Comments on Trustee Recommendations to Improve FAF, FASB, and GASB;
-Board Meeting Summary;
-GASB Current Technical Agenda;
-Board Approves Technical Plan for the First Four Months of 2008;
-Who's Who;
-W. Daniel Ebersole Appointed as Chairman of the GASAC;
-Financial Accounting Foundation Board of Trustees Announces 2008 Officers and Appointments; and
-GASB Requests Input on Emerging Issues.
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