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Accounting Research Manager(TM)
Weekly Summary of Developments
February 11-15, 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

Fair Value Measurements -- FASB Issues Staff Positions Changing Certain Provisions in Statement 157
Investment Companies -- FASB Issues Staff Position Indefinitely Deferring the Effective Date of SOP 07-1
Fair Value Measurements -- FASB Discusses Fair Value Measurements and Other Matters at February 6, 2008 Meeting
EITF Materials Issued -- Earnings Per Share and Other Matters for the March 12, 2008 EITF Meeting
Financial Reporting -- SEC Advisory Committee on Improvements to Financial Reporting Issues Progress Report
Financial Instruments -- IASB Amends IAS 32 and IAS 1 for Puttable Financial Instruments and Obligations Arising on Liquidation
International Financial Reporting -- IASB Issues Agenda for February Meeting

Auditing and Internal Controls Headlines

Compilation and Reviews -- AICPA Issues Omnibus Statement
Understanding an Entity and Risk Assessment -- Unconditional and Presumptively Mandatory Requirements of SAS-109

Government Headlines

Financial Reporting Entity Issues -- Questions and Answers on Financial Reporting Entity Issues Discussed

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ACCOUNTING AND SEC HEADLINES:
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Fair Value Measurements -- FASB Issues Staff Positions Changing Certain Provisions in Statement 157
FSP FAS 157-1: For detail, please contact info@zy-cpa.com
FSP FAS 157-2: For detail, please contact info@zy-cpa.com

The FASB issued FASB Staff Position (FSP) FAS 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13," and FSP FAS 157-2, "Effective Date of FASB Statement No. 157." These FSPs:

-Defer the effective date in FASB Statement No. 157, Fair Value Measurements, for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). This deferral is not available, however, for companies that have issued financial statements that included application of the measurement and disclosure provisions in Statement 157.

-Exclude certain leasing transactions accounted for under FASB Statement No. 13, Accounting for Leases, from the scope of Statement 157. The exclusion does not apply to fair value measurements of assets and liabilities recorded as a result of a lease transaction but measured pursuant to other pronouncements within the scope of Statement 157.

-Include several specific examples of items eligible or not eligible for the one-year deferral.

Companies will still need to apply the recognition and disclosure provisions of Statement 157 for financial assets and financial liabilities and for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually.

FSP FAS 157-1 is effective upon the initial adoption of Statement 157. A company that applied Statement 157 in a manner consistent with the provisions of this FSP would continue to apply the provisions of this FSP from the date of the initial adoption of Statement 157. However, an enterprise that did not apply Statement 157 in a manner consistent with the provisions of this FSP is required to retrospectively apply the provisions in this FSP to the date of the initial adoption of Statement 157.

FSP FAS 157-2 is effective February 12, 2008.

Investment Companies -- FASB Issues Staff Position Indefinitely Deferring the Effective Date of SOP 07-1
For detail, please contact info@zy-cpa.com

The FASB issued FASB Staff Position (FSP) SOP 07-1-1, "Effective Date of AICPA Statement of Position 07-1." This FSP indefinitely defers the effective date in AICPA Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting Guide "Investment Companies" and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. The delay is intended to allow the FASB time to consider a number of significant issues relating to the implementation of SOP 07-1.

This FSP is effective December 15, 2007. If an entity that early adopted the provisions of SOP 07-1 voluntarily rescinds its early adoption as permitted by this FSP, that entity is required to account for that change according to the provisions of FASB Statement No. 154, Accounting Changes and Error Corrections.

Fair Value Measurements -- FASB Discusses Fair Value Measurements and Other Matters at February 6, 2008 Meeting
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As reported in its "Action Alert" publication, the FASB met on February 6, 2008, and discussed the following issues:

-Application of Statement 157 to Statement 13 and its related interpretive accounting pronouncements that address leasing transactions;
-Partial deferral of the effective date of Statement 157; and
-Deferral of the effective date of AICPA SOP 07-1.

The FASB agreed to: (a) defer the effective date in Statement 157 for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (see discussion of FSP FAS 157-2 above); and (b) exclude certain leasing transactions accounted for under FASB Statement No. 13, Accounting for Leases, from the scope of Statement 157 (see discussion of FSP FAS 157-1 above). The exclusion does not apply to fair value measurements of assets and liabilities recorded as a result of a lease transaction but measured pursuant to other pronouncements within the scope of Statement 157.

In addition, the FASB also decided that it would indefinitely defer the effective date in AICPA Statement of Position (SOP) 07-1, Clarification of the Scope of the Audit and Accounting Guide "Investment Companies" and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies (see discussion of FSP SOP 07-1-1 above).

The Action Alert also indicates that the FASB is scheduled to have a meeting on February 20, 2008, and plans to address the following projects or topics:

-Conceptual framework: objectives and qualitative characteristics, and reporting entity; and
-Education session.

EITF Materials Issued -- Earnings Per Share and Other Matters for the March 12, 2008 EITF Meeting
For detail, please contact info@zy-cpa.com

The FASB has issued the following additional materials for the EITF meeting scheduled for March 12, 2008:

-Issue No. 07-4, "Application of the Two-Class Method under FASB Statement No. 128 to Master Limited Partnerships" (Draft Abstract, Comment Letters); and
-EITF Operating Procedures, revised.

The materials include additional comment letters received from constituents regarding the Draft Abstract on Issue 07-4. In addition, the materials include revisions to the EITF Operating Procedures. Among other revisions made, the EITF is adding an "observer" from the IASB to participate, but not vote, at EITF meetings. This role is similar to that held by the SEC observer at EITF meetings.

Financial Reporting -- SEC Advisory Committee on Improvements to Financial Reporting Issues Progress Report
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The SEC's Advisory Committee on Improvements to Financial Reporting (CIFiR) issued a "Progress Report," containing 12 developed proposals for improving financial reporting in the U.S. The SEC established the 17-member CIFiR to examine the U.S. financial reporting system with the goals of reducing unnecessary complexity and making information more useful and understandable for investors. Upon completion of its work, CIFiR will issue a final report with recommendations to the Chairman of the SEC. A summary of the 12 proposals is as follows:

-GAAP should be based on business activities, rather than industries. Accordingly, industry-specific guidance should be eliminated or minimized.
-Alternative accounting policies should not be included in accounting standards.
-Investors should have representation on standard-setting bodies, including the Financial Accounting Foundation (FAF) which oversees the FASB.
-The SEC should work with the FAF to strengthen its governance of FASB.
-The SEC should encourage the FASB to further improve its standards-setting process and timeliness.
-The number of parties formally and informally providing interpretive guidance on GAAP should continue to be reduced.
-The FASB or SEC, as appropriate, should issue guidance on certain aspects of materiality.
-The FASB or SEC, as appropriate, should issue guidance on correction of errors (including restatements) in financial statements.
-The FASB or SEC, as appropriate, should develop and issue guidance on applying materiality to errors identified in prior interim periods and how to correct these errors.
-The SEC and PCAOB should adopt a judgment framework for accounting and auditing judgments.
-The SEC should, over the long-term, mandate the filing of XBRL-tagged financial statements after the satisfaction of certain preconditions. In addition, the SEC should adopt a phased in approach to mandating XBRL-tagged financial statements.
-The SEC should issue a new comprehensive interpretive release regarding the use of corporate websites for disclosures of corporate information.

Financial Instruments -- IASB Amends IAS 32 and IAS 1 for Puttable Financial Instruments and Obligations Arising on Liquidation
For detail, please contact info@zy-cpa.com

The IASB has issued amendments to both IAS 32, Financial Instruments: Presentation, and IAS 1, Presentation of Financial Statements. Under existing standards, a financial instrument is classified as a liability if the holder of that instrument can require the issuer to redeem it for cash. The amendments require entities to classify the following types of financial instruments as equity, provided they have particular features and meet specific conditions: (a) puttable financial instruments (e.g., some shares issued by co-operative entities); and (b) instruments, or components of instruments, that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation (e.g., some partnership interests and some shares issued by limited life entities). In addition, the amendments require additional disclosures on applicable financial instruments.

The amended standards must be applied for annual periods beginning on or after January 1, 2009.

International Financial Reporting -- IASB Issues Agenda for February Meeting
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The IASB is scheduled to discuss the following agenda items at its February 19-21, 2008 meeting:

-Annual Improvements Process;
-Conceptual Framework;
-Insurance Contracts;
-Liabilities: Amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets; and
-Post-employment Benefits.

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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Compilation and Reviews -- AICPA Issues Omnibus Statement
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The AICPA has issued Statement on Standards for Accounting and Review Services (SSARS) No. 17, Omnibus Statement on Standards for Accounting and Review Services - 2008. The Statement includes several revisions to existing auditing standards on accounting and review services. The amendments cover the following areas:

-General rules on compilations and reviews of financial statements;
-Communicating to management and others;
-Change in engagement from audit to review or compilation (or from review to compilation);
-Reporting when one period is audited;
-Change in status of the audited entity - issuer/nonissuer;
-Changes to certain definitions associated with compilations and reviews; and
-Analytical procedures.

The amendments are generally effective for compilations and reviews of financial statements for periods ending on or after December 31, 2008. Early application is permitted.

Understanding an Entity and Risk Assessment -- Unconditional and Presumptively Mandatory Requirements of SAS-109
For detail, please contact info@zy-cpa.com

We have added a GAAS Update Service that discusses the unconditional and presumptively mandatory requirements of AICPA Statement on Auditing Standards (SAS) No. 109, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement. Among other matters, the provisions of SAS 109 require the auditor to:

-Assess risk at the financial statement and relevant assertion levels based on an appropriate understanding of the client and its environment, including its internal control.
-Evaluate the design and implementation of controls over financial reporting, including control activities for areas of significant risk.
-Determine which of the identified risks require special audit consideration ("significant risks").
-Evaluate the design and determine the implementation of controls over risks for which it is not possible or practicable to reduce detection risk to an acceptably low level at the relevant assertion level through substantive procedures alone.
-Revise the risk assessment and modify the planned audit procedures when evidence obtained during the audit contradicts the original risk assessment.
-Communicate to those charged with governance and consider the implications for the auditor's risk assessment, when management has not implemented controls over significant risks and, as a result, the auditor believes a significant deficiency or material weakness in internal control over financial reporting exists.

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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GOVERNMENT HEADLINES:
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Financial Reporting Entity Issues -- Questions and Answers on Financial Reporting Entity Issues Discussed
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We have added a Governmental GAAP Update Service that reviews questions and answers regarding implementation issues associated with determining and reporting the governmental financial reporting entity. Proper identification and presentation of all entities that make up the government's financial reporting entity is important to providing materially complete and not misleading financial statements. Questions and answers included in this Update cover the following topics:

-Defining a primary government;
-Reporting primary government fiduciary relationships;
-Nongovernmental organizations as component units;
-Stand-alone government as a primary government; and
-Reporting periods.

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