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Accounting Research
Manager(TM)
Weekly Summary of
Developments
April 21-25, 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:
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
Fresh-Start Reporting -- FASB Issues Final FSP Addressing
Fresh-Start Reporting by Entities in Reorganization under the Bankruptcy Code
Derivatives and Hedging -- Interpretations of FASB Statement No.
133 Updated
Derivatives and Hedging -- FASB Revises Statement 133 Implementation
Guide
Credit Derivatives -- FASB to Discuss Possible Improvements
to Disclosures About Credit Derivatives and Other Matters
Inflation Rates -- Interpretation Issued, Inflation Rates
for Judging Whether an Economy Is Highly Inflationary - March 2008
Ethics and Independence
Rules -- PCAOB Adopts New
Rule on Communicating Independence to Audit Committees and Amends Rules on
Providing Tax Services
Risk Alerts -- AICPA Issues Audit Risk and Financial
Reporting Alerts Covering Current Accounting Issues, Employee Benefit Plans,
and Not-for-Profit Organizations
Auditing and Internal
Controls Headlines
Ethics and Independence
Rules -- PCAOB Adopts New
Rule on Communicating Independence to Audit Committees and Amends Rules on
Providing Tax Services
Accounting and Review
Services -- AICPA Omnibus
Statement on Standards for Accounting and Review Services Discussed
Risk Alerts -- AICPA Issues Audit Risk and Financial
Reporting Alerts Covering Current Accounting Issues, Employee Benefit Plans,
and Not-for-Profit Organizations
Government Headlines
Postemployment Benefits -- Questions and Answers on Accounting and Financial
Reporting for Postemployment Benefits Other Than
Pensions
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ACCOUNTING AND SEC HEADLINES:
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Fresh-Start Reporting --
FASB Issues Final FSP Addressing Fresh-Start Reporting by Entities in
Reorganization under the Bankruptcy Code
For detail, please contact info@zy-cpa.com
The FASB has issued FASB
Staff Position (FSP) SOP 90-7-1, An Amendment of AICPA Statement of Position
90-7. This final FSP resolves the conflict between the guidance requiring
early adoption of new accounting standards for entities required to follow
fresh-start reporting under AICPA Statement of Position (SOP) 90-7, Financial
Reporting by Entities in Reorganization under the Bankruptcy Code, and
other authoritative accounting standards that expressly prohibit early
adoption. Specifically, this FSP will require an entity emerging from
bankruptcy that applies fresh-start reporting, to follow only the accounting
standards in effect at the date fresh-start reporting is adopted, which include
those standards eligible for early adoption if an election is made to adopt
early.
FSP 90-7-1 is effective for
financial statements issued subsequent to April 24, 2008.
Derivatives and Hedging --
Interpretations of FASB Statement No. 133 Updated
For detail, please contact info@zy-cpa.com
We have updated our publication, Derivatives
and Hedging - Interpretations of FASB Statement 133. We have made a number
of updates to interpretations as a result of the issuance of FASB Statement No.
161, Disclosures about Derivative Instruments and Hedging Activities. We
have also updated Interpretation 1-4, "Effect of Statement 157 on
Statement 133," to reflect the FASB's deferral
of certain portions of that pronouncement through the issuance of FASB Staff
Position (FSP) FAS 157-2, Effective Date of FASB Statement No. 157.
We have also updated the
section entitled, "Recent Developments," for recent deliberations at
the FASB on a variety of relevant projects.
See our Literature Update for
complete details.
Derivatives and Hedging --
FASB Revises Statement 133 Implementation Guide
For detail, please contact info@zy-cpa.com
The FASB has published
revisions to its, Guide to Implementation of Statement No. 133 on Accounting
for Derivative Instruments and Hedging Activities. Specifically, the FASB
has added implementation guidance (frequently known as "DIG Issues")
in the form of Issue I1, "Interaction of the Disclosure Requirements of
Statement 133 and Statement 47," and Issue K4, "Miscellaneous: Income
Statement Classification of Hedge Ineffectiveness and the Component of a
Derivative's Gain or Loss Excluded from the Assessment of Hedge
Effectiveness." The revisions relate to the issuance of FASB Statement No.
161, Disclosures about Derivative Instruments and Hedging Activities.
Credit Derivatives -- FASB
to Discuss Possible Improvements to Disclosures About Credit Derivatives and
Other Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Action Alert" publication, the FASB is schedule to discuss the
following items at its April 30, 2008, meeting:
-Disclosures about credit
derivatives;
-Hedging under FASB Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities;
and
-Mergers and acquisitions by
a not-for-profit organization.
The FASB is expected to
discuss its project to improve disclosures about credit derivatives, including
a review of the project's scope, proposed disclosures, expected comment period,
and effective date and transition. The FASB will also discuss its project on
mergers and acquisition by a not-for-profit organizations,
including the project plan and steps for completing the project. Those steps
include redeliberations that are expected to focus on
the significant concerns raised by respondents to the October 2006 Exposure
Drafts, Not-for-Profit Organizations: Mergers and Acquisitions, and Not-for-Profit
Organizations: Goodwill and Other Intangible Assets Acquired in a Merger or
Acquisition, which include the proposals for the recognition of
donor-related intangible assets and for goodwill and the subsequent accounting
for goodwill.
As also reported in its
Action Alert publication, the FASB met on April 16, 2008, and discussed
financial reporting by entities in reorganization under the U.S. Bankruptcy
Code. Specifically, the FASB discussed issues raised by respondents to proposed
FASB Staff Position (FSP) SOP 90-7- a, An Amendment of AICPA Statement of
Position 90-7. The FASB decided to modify paragraph six of the proposed FSP
to clarify that entities emerging from bankruptcy and adopting fresh-start
reporting are allowed to early adopt an accounting principle when early
adoption is permitted by that accounting standard. Entities emerging from
bankruptcy and adopting fresh-start reporting are not allowed to early adopt an
accounting principle when early adoption is not permitted by that accounting
standard. The FASB also decided not to expand the scope of the project to
address other concerns raised by respondents during the comment period. A final
FSP on this matter has been issued and is discussed above.
Inflation Rates --
Interpretation Issued, Inflation Rates for Judging Whether an Economy Is Highly
Inflationary - March 2008
For detail, please contact info@zy-cpa.com
Our Interpretation, Inflation
Rates for Judging Whether an Economy Is Highly Inflationary - March 2008, has
been issued and reflects the latest available inflation rate information. We
did not make any changes since our December 2007 update as revised on February
21, 2008, when we removed
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.
See our Literature Update for
complete details.
Ethics and Independence
Rules -- PCAOB Adopts New Rule on Communicating Independence to Audit
Committees and Amends Rules on Providing Tax Services
For detail, please contact info@zy-cpa.com
The PCAOB voted to adopt Rule
3526, Communication with Audit Committees Concerning Independence, and
an amendment to Rule 3523, Tax Services for Persons in Financial Reporting
Oversight Roles. The SEC must approve both new Rule 3526 and the amendment to
Rule 3523 before becoming effective. The PCAOB adopted Rule 3526 to enhance
communication between audit committees and registered firms regarding the
firm's independence. Rule 3526 will require a registered public accounting
firm, before accepting an initial engagement pursuant to the standards of the
PCAOB, to describe in writing to the audit committee all relationships between
the firm or any of its affiliates and the issuer or persons in a financial
reporting oversight role at the issuer that may reasonably be thought to bear
on the firm's independence.
The PCAOB also adopted an
amendment to Rule 3523. The amendment excludes from the scope of the rule tax
services provided during the portion of the audit period that precedes the
beginning of the professional engagement period.
The rule changes require
approval by the SEC before they become effective. If so
approved: (a) Rule 3526 would be effective on the later of September 30,
2008, or 30 days after SEC approval; and (b) the amendment to Rule 3523
would be effective immediately.
Risk Alerts -- AICPA
Issues Audit Risk and Financial Reporting Alerts Covering Current Accounting
Issues, Employee Benefit Plans, and Not-for-Profit Organizations
The AICPA has issued the
following three alerts for 2008:
-Financial Reporting Alert, Current
Accounting Issues and Risks;
For detail, please contact info@zy-cpa.com
-Audit Risk Alert, Employee
Benefit Plans Industry Developments; and
For detail, please contact info@zy-cpa.com
-Audit Risk Alert, Not-for-Profit
Organizations Industry Developments.
For detail, please contact info@zy-cpa.com
AICPA Alerts provide users
with a detailed overview of recent industry, technical, regulatory, or
professional developments, that may have an impact on a particular audit or
financial reporting area. 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:
=======================================
Ethics and Independence
Rules -- PCAOB Adopts New Rule on Communicating Independence to Audit
Committees and Amends Rules on Providing Tax Services
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, the PCAOB voted to adopt Rule 3526, Communication
with Audit Committees Concerning Independence, and an amendment to Rule
3523, Tax Services for Persons in Financial Reporting Oversight Roles.
The SEC must approve both new Rule 3526 and the amendment to Rule 3523 before
becoming final. The PCAOB adopted Rule 3526 to enhance communication between
audit committees and registered firms regarding the firm's independence. Rule
3526 will require a registered public accounting firm, before accepting an
initial engagement pursuant to the standards of the PCAOB, to describe in
writing to the audit committee all relationships between the firm or any of its
affiliates and the issuer or persons in a financial reporting oversight role at
the issuer that may reasonably be thought to bear on the firm's independence.
The PCAOB also adopted an
amendment to Rule 3523. The amendment excludes from the scope of the rule tax
services provided during the portion of the audit period that precedes the
beginning of the professional engagement period.
The rule changes require
approval by the SEC before they become effective. If so
approved: (a) Rule 3526 would be effective on the later of September 30,
2008, or 30 days after SEC approval; and (b) the amendment to Rule 3523
would be effective immediately.
Accounting and Review
Services -- AICPA Omnibus Statement on Standards for Accounting and Review
Services Discussed
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that discusses AICPA Statement on Standards for Accounting and Review
Services (SSARS) No. 17, Omnibus Statement on Standards for Accounting and
Review Services - 2008. SSARS 17 includes several revisions to existing
standards related to accounting and review services and conforms
terminology to that utilized by other standard setters (e.g., the Auditing
Standards Board). Among other things, SSARS 17:
-Replaces the term
"nonpublic entity" with the term "nonissuer";
-Clarifies the objectives of
compilation and review engagements;
-Revises the definition of
"third parties" and introduces a definition of "management"
and "those charged with governance";
-Provides guidance with
respect to an accountant’s consideration of the entity's ability to continue as
a going concern during the performance of compilation or review procedures; and
-Provides guidance with
respect to an accountant's consideration of subsequent events in a compilation
or review engagement.
SSARS 17 is effective for compilations
and reviews of financial statements for periods ending on or after December 15,
2008.
Risk Alerts -- AICPA
Issues Audit Risk and Financial Reporting Alerts Covering Current Accounting
Issues, Employee Benefit Plans, and Not-for-Profit Organizations
As discussed above in our
Accounting and SEC Summaries, the AICPA has issued the following three alerts
for 2008:
-Financial Reporting Alert, Current
Accounting Issues and Risks;
For detail, please contact info@zy-cpa.com
-Audit Risk Alert, Employee
Benefit Plans Industry Developments; and
For detail, please contact info@zy-cpa.com
-Audit Risk Alert, Not-for-Profit
Organizations Industry Developments.
For detail, please contact info@zy-cpa.com
AICPA Alerts provide users
with a detailed overview of recent industry, technical, regulatory, or
professional developments, that may have an impact on a particular audit or
financial reporting area. 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
======================
GOVERNMENT HEADLINES:
======================
Postemployment Benefits -- Questions and Answers on
Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions
For detail, please contact info@zy-cpa.com
We have added a Governmental
GAAP Update Service that addresses certain introductory questions and answers
(Q&A) related to implementation associated with accounting and reporting
for postemployment benefits other than pensions
(OPEB). The guidance focuses on issues associated with: (a) GASB
Statement No. 43, Financial Reporting for Postemployment
Benefit Plans Other Than Pension Plans; (b) GASB Statement No. 45, Accounting
and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions; and (c) Chapter 8 of the GASB's, Comprehensive Implementation Guide. Q&A
included in this Update Service cover the following areas:
-The relationship between
GASB 43 and GASB 45;
-Identifying OPEB and the
applicability of GASB 43 and GASB 45; and
-OPEB measurement and
actuarial 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