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Accounting Research
Manager(TM)
Weekly Summary of
Developments
May 12-16, 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 -- Statement 157 Interpretations
Publication Added
Fair Value Measurements -- Minutes of May 8, 2008 Valuation
Resource Group Meeting
GAAP Hierarchy -- FASB Issues Statement 162
Convertible Debt -- FASB Staff Issues Position on
Accounting for Convertible Debt That May Be Settled in Cash upon Conversion
Financial Assets -- FASB to Discuss Statement 140 and
Other Matters
International Financial
Reporting -- IASB Issues
Agenda for May 20-23, 2008 Meeting
IFRIC Update -- IFRIC Discusses Real Estate Sales
Auditing and Internal
Controls Headlines
Fair Value Measurements -- Additional Interpretive Guidance on
Auditing Fair Value Measurements and Disclosures Provided
Government Headlines
Service Efforts and
Accomplishments Reporting
-- GASB Exposure Draft Discussed
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ACCOUNTING AND SEC HEADLINES:
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Fair Value Measurements --
Statement 157 Interpretations Publication Added
For detail, please contact info@zy-cpa.com
We have added a publication, Interpretations
of FASB Statement 157. The publication is arranged in a question and answer
format covering specific areas related to the application of Statement 157 and
includes answers to over 110 questions. The publication covers the following
five broad areas:
-Overview and scope of
Statement 157;
-Measurement of fair value;
-Disclosure requirements
under Statement 157;
-Issues associated with
auditing fair value; and
-Valuation methods.
See our Literature Update for
complete details.
Fair Value Measurements --
Minutes of May 8, 2008 Valuation Resource Group Meeting
For detail, please contact info@zy-cpa.com
We have added minutes of the May 8, 2008
meeting of the Valuation Resource Group (VRG). The FASB established the VRG to
provide the FASB with input on potential clarifying guidance on issues relating
to the application of FASB Statement 157. At the May 8, 2008 meeting, the VRG
discussed the following topics:
-Observable vs. unobservable
fair value measurements in the current credit environment;
-Determining whether a
discount should be applied for a restriction on sale;
-Employee benefit plans; and
-Contingent liabilities.
GAAP Hierarchy -- FASB
Issues Statement 162
For detail, please contact info@zy-cpa.com
The FASB has issued FASB
Statement No. 162, The Hierarchy of Generally Accepted Accounting
Principles. Statement 162 is intended to improve financial reporting by
identifying a consistent framework, or hierarchy, for selecting accounting principles
to be used in preparing financial statements that are presented in conformity
with
-FASB Statements of Financial
Accounting Standards and Interpretations, FASB Statement 133 Implementation
Issues, FASB Staff Positions, AICPA Accounting Research Bulletins and
Accounting Principles Board Opinions that are not superseded by actions of the
FASB, and Rules and interpretive releases of the SEC for SEC registrants.
-FASB Technical Bulletins
and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides and
Statements of Position.
-AICPA Accounting Standards
Executive Committee Practice Bulletins that have been cleared by the FASB,
consensus positions of the EITF, and Appendix D EITF topics.
-Implementation guides (Q&As) published by the FASB staff, AICPA Accounting
Interpretations, AICPA Industry Audit and Accounting Guides and Statements of
Position not cleared by the FASB, and practices that are widely recognized and
prevalent either generally or in the industry.
Statement 162 is effective 60
days following the SEC's approval of the PCAOB amendments to AU Section 411, The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles. Since Statement 162 is only effective for nongovernmental
entities, the GAAP hierarchy will remain in AICPA Statement on Auditing
Standards (SAS) No. 69, The Meaning of "Present Fairly in Conformity
with Generally Accepted Accounting Principles" in the Independent
Auditor's Report, for state and local governmental entities and federal
governmental entities.
Convertible Debt -- FASB
Staff Issues Position on Accounting for Convertible Debt That May Be Settled in
Cash upon Conversion
For detail, please contact info@zy-cpa.com
The FASB issued FASB Staff
Position (FSP) APB 14-1, Accounting for Convertible Debt Instruments That
May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).
This FSP clarifies that convertible debt instruments that may be settled in
cash upon conversion (including partial cash settlement) are not addressed by
paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and Debt
Issued with Stock Purchase Warrants. Additionally, this FSP specifies that
issuers of such instruments should separately account for the liability and
equity components in a manner that will reflect the entity's nonconvertible
debt borrowing rate when interest cost is recognized in subsequent periods.
This FSP is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years.
Financial Assets -- FASB
to Discuss Statement 140 and Other Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Action Alert" publication, the FASB is scheduled to meet on May
21-22, 2008, and discuss whether to amend FASB Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,
for the guidance related to the measurement of interests that continue to be
held by the transferor. The FASB is also expected to hold an educational
session and meet with representatives of the Principles & Practices Board
of the Health Financial Management Association to discuss matters of mutual
interest.
As also reported in its
Action Alert publication, the FASB met on May 7, 2008 and discussed: (a)
conceptual framework: elements and recognition; and (b) determining
whether instruments granted in share-based payment transactions are
participating securities. The FASB agreed that the existence of a present
economic obligation distinguishes a liability from general business risks. The
Board generally agreed that, in concept, a present economic obligation exists
when: (a) an entity is committed to a particular action or actions that
are capable of resulting in cash outflows; and (b) there is a mechanism
to enforce that economic obligation against the entity. The FASB also agreed
that laws and regulations are examples of mechanisms and are not, by
themselves, present obligations.
The FASB decided the
following regarding its draft of final FASB Staff Position (FSP) EITF 03-6-1,
Determining Whether Instruments Granted in Share-Based Payment Transactions are
Participating Securities:
-When calculating basic
earnings per share pursuant to the two-class method, all awards that contain
rights to nonforfeitable dividends should be
considered participating securities. Dividends or dividend equivalents actually
paid on share-based payment awards not expected to vest should be excluded from
the earnings allocation to avoid counting the dividends as both compensation
cost and distributed earnings. Undistributed earnings should be allocated to
all outstanding share-based payment awards, including those that are not
expected to vest.
-The effective date should be
the first reporting period beginning after the date the final FSP is posted to
the FASB website.
International Financial
Reporting -- IASB Issues Agenda for May 20-23, 2008 Meeting
For detail, please contact info@zy-cpa.com
The IASB is scheduled to
discuss the following agenda items at its May 20-23, 2008 meeting:
-Amendments to IAS 39, Financial
Instruments: Recognition and Measurement, exposures qualifying for hedge
accounting;
-Annual improvements process;
-Earnings per share;
-Emissions trading schemes;
-IFRIC update;
-IFRS 1, First-time
Adoption of International Financial Reporting Standards;
-IFRS for small and
medium-sized entities;
-Liabilities: amendments to
IAS 37, Provisions, Contingent Liabilities and Contingent Assets; and
-Revenue recognition.
IFRIC Update -- IFRIC
Discusses Real Estate Sales and Other Matters at May 8, 2008 Meeting
For detail, please contact info@zy-cpa.com
As reported in the IASB's "IFRIC Update" publication, the IFRIC met
on May 8, 2008, and discussed the following matters:
-IFRIC D21, Real Estate
Sales;
-IFRIC D22, Hedges of a
Net Investment in a Foreign Operation;
-IFRS 2, Share-based
Payment;
-IFRIC 11, IFRS 2 - Group
and Treasury Share Transactions;
-Rate regulated liabilities;
-IFRIC agenda decisions;
-Tentative agenda decisions;
and
-IFRIC work in progress.
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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Fair Value Measurements --
Additional Interpretive Guidance on Auditing Fair Value Measurements and
Disclosures Provided
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that focuses on practical issues relating to AICPA Statement on
Auditing Standards (SAS) No. 101, Auditing Fair Value Measurements and
Disclosures. The Updated is organized into a question and answer (Q&A)
format designed to provide practical discussion, advice, and specific
implementation guidance. The Q&As address various
issues including:
-Factors that the auditor
should consider when evaluating the reasonableness of management's assumptions
underlying the fair value measurements;
-Common valuation methods
that valuation specialists generally use when estimating fair values;
-Circumstances where the
specialist's relationship to the client might impair the specialist's
objectivity;
-Whether the auditor should
refer to the work or findings of a valuation specialist in his or her report on
an entity's financial statements;
-Audit procedures that the
auditor should apply when testing management's significant assumptions, the
valuation model, and the underlying data; and
-Factors that the auditor
should consider when there are no observable market prices and the entity
estimates fair value using a valuation method.
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:
======================
Service Efforts and
Accomplishments Reporting -- GASB Exposure Draft Discussed
For detail, please contact info@zy-cpa.com
We have added a Governmental
GAAP Update Service that discusses the issuance of Exposure Draft (ED), Service
Efforts and Accomplishments Reporting-an amendment of GASB Concepts Statement
No. 2. The ED seeks to update the reporting standards for service efforts
and accomplishments (SEA) reporting based on developments since the current
standards were issued. This Update discusses the key changes to current SEA
reporting standards proposed in the ED in the following areas:
-Purpose and scope of SEA
reporting;
-Elements of SEA reporting;
-Limitations of SEA
reporting; and
-Enhancing the usefulness of
SEA information.
Comments on the ED are due
July 3, 2008. The GASB has scheduled public hearings on the ED for July 29,
2008, in
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