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Accounting Research Manager(TM)
Weekly Summary of Developments
June 9-13, 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

EITF Meeting Results -- EITF Approves Final Consensuses
Hedging Activities -- FASB Issues Proposal to Amend Statement 133 for the Accounting for Hedging Activities
EITF Materials Issued -- Materials on Revenue Recognition and Other Matters Issued for June 12, 2008 EITF Meeting
Earnings Per Share -- FASB to Discuss Earnings Per Share and Other Matters
Pro Forma MD&A -- SEC Regulations Committee Revises Discussion Document Regarding Pro Forma MD&A
PCAOB Rules -- PCAOB Issues Final Rules on Periodic Reporting by Registered Public Accounting Firms
Interactive Data -- SEC Publishes Proposal Requiring Mutual Funds to Provide Risk/Return Information Using XBRL
International Accounting -- Director of Corporation Finance Discusses IFRS and U.S. Companies
Tax Exempt Bonds -- AICPA Issues Article on Accounting and Audit Considerations Regarding Tax Exempt Bonds
International Financial Reporting -- IASB Issues Agenda for June 17-20, 2008 Meeting

Auditing and Internal Controls Headlines

Engagement Quality Review -- PCAOB Proposed Auditing Standard Discussed
Internal Controls -- COSO Issues Exposure Draft on Guidance on Monitoring Internal Control Systems
PCAOB Rules -- PCAOB Issues Final Rules on Periodic Reporting by Registered Public Accounting Firms
Tax Exempt Bonds -- AICPA Issues Article on Accounting and Audit Considerations Regarding Tax Exempt Bonds

Government Headlines

GASB Report Issued -- May 5, 2008 GASB Meeting and Other Matters Discussed
Technical Plan -- GASB Approval of Its Technical Plan for the Second Third of 2008 Discussed
Tax Exempt Bonds -- AICPA Issues Article on Accounting and Audit Considerations Regarding Tax Exempt Bonds

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ACCOUNTING AND SEC HEADLINES:
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EITF Meeting Results -- EITF Approves Final Consensuses
For detail, please contact info@zy-cpa.com

As described in detail in our "EITF Flash Report," the EITF discussed the following issues at its June 12, 2008 meeting:

-Issue No. 07-5, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock;"
-Issue No. 08-1, "Revenue Recognition for a Single Unit of Accounting;"
-Issue No. 08-2, "Lessor Revenue Recognition for Maintenance Services;"
-Issue No. 08-3, "Accounting by Lessees for Maintenance Deposits under Lease Arrangements;"
-Issue No. 08-4, "Transition Guidance for Conforming Changes to Issue No. 98-5;" and
-Issue No. 08-5, "Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Guarantee."

The EITF reached consensuses on Issues 07-5, 08-3, and 08-4 and also reached a consensus-for-exposure on Issue 08-5. These decisions must still be ratified by the FASB, which is scheduled for June 25, 2008.

See our EITF Flash Report for complete details.

Hedging Activities -- FASB Issues Proposal to Amend Statement 133 for the Accounting for Hedging Activities
For detail, please contact info@zy-cpa.com

The FASB published for public comment an Exposure Draft (ED), Accounting for Hedging Activities, an amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This ED amends the hedge accounting requirements in Statement 133. Among other things, this ED would:

-Eliminate (with two exceptions noted below) the ability of an entity to designate individual risks as the hedged risk in a fair value or cash flow hedge.

-Continue to permit an entity the ability to designate the following individual risks as the hedged risk in a fair value or cash flow hedge: (a) interest rate risk related to its own issued debt (that is, its liability for funds borrowed), if hedged at inception, and (b) foreign currency exchange risk.

-Eliminate the shortcut method and critical terms matching.

-Modify the effectiveness threshold necessary for applying hedge accounting from "highly effective" to "reasonably effective" at offsetting changes in fair value or variability in cash flows.

-Always require an effectiveness evaluation at inception of the hedging relationship.

As proposed, the ED would require application of the amended hedging requirements for financial statements issued for fiscal years beginning after June 15, 2009, and interim periods within those fiscal years. Early application would not be permitted.

Comments on the ED are due August 15, 2008.

EITF Materials Issued -- Materials on Revenue Recognition and Other Matters Issued for June 12, 2008 EITF Meeting
For detail, please contact info@zy-cpa.com

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

-Inventory of meeting materials;
-Summary of issues;
-EITF Issue No. 07-5, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock" (Issue Supplement No. 3 Addendum);
-EITF Issue No. 08-1, "Revenue Recognition for a Single Unit of Accounting" (Working Group Report); and
-EITF Issue No. 08-2, "Lessor Revenue Recognition for Maintenance Services" (Comment Letter).

Earnings Per Share -- FASB to Discuss Earnings Per Share 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 June 18, 2008, to discuss: (a) earnings per share; and (b) financial statement presentation. The FASB is scheduled to discuss the comment period and the effective date of an expected proposed statement on earnings per share. In addition, the FASB is expected to discuss the following matters regarding its project on the presentation of financial statements:

-Whether its long-term views on presentation in the statement of comprehensive income should remain in the scope of Phase B and if not, the effect of that scope change on the presentation of other comprehensive income, income taxes, and earnings per share;

-Limiting the extent to which Phase B of the project results in new note disclosures; and

-Issues identified while drafting the discussion document, including the definition of the operating and investing categories and preparation of the reconciliation schedule.

As also reported in its Action Alert publication, the FASB met on June 4, 2008 and discussed the following matters:

-Reconsideration of FASB Interpretation (FIN) No. 46 (Revised 2003), Consolidation of Variable Interest Entities;
-Mergers and acquisitions by a not-for-profit organization; and
-FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, implementation: transfers of financial assets.

The FASB decided to postpone voting on a rule that sets a minimum third-party investment threshold to recognize a sale of a transferred financial asset. The FASB is expected to redeliberate this issue when it concludes on whether and how to amend the consolidation model in FIN 46R. The FASB also discussed and agreed on several financial statement disclosure enhancements to both Statement 140 and FIN 46R.

Pro Forma MD&A -- SEC Regulations Committee Revises Discussion Document Regarding Pro Forma MD&A
For detail, please contact info@zy-cpa.com

The Center for Audit Quality's (CAQ) SEC Regulations Committee published a revision to Discussion Document C from the April 9, 2008, Joint Meeting of the SEC Regulations Committee and SEC Staff, "Pro forma Management's Discussion and Analysis of Financial Condition and Results of Operations." This document was originally added to Accounting Research Manager on May 22, 2008.

The update relates primarily to an inquiry of the SEC staff as to the extent of supplemental pro forma information that may be presented by a registrant in its Management's Discussion and Analysis (MD&A). Specifically, revised Discussion Document C removes a stated view of the SEC staff that it would not object if a company elected to modify the guidance in Article 11 of Regulation S-X when presenting pro forma information if consistent with the pro forma information disclosed pursuant to FASB Statement No. 141, Business Combinations, provided that the registrant clearly disclose and quantify the differences. A registrant that has made or is considering making such pro forma disclosures in its MD&A should review the updated guidance in Discussion Document C.

See our Literature Update for complete details.

PCAOB Rules -- PCAOB Issues Final Rules on Periodic Reporting by Registered Public Accounting Firms
For detail, please contact info@zy-cpa.com

The PCAOB adopted, Rules on Periodic Reporting by Registered Public Accounting Firms. The new rules establish a reporting framework for annual and special reporting of information and events by accounting firms that are registered with the PCAOB and represents the first such requirements adopted by the PCAOB. The reporting framework includes the following types of reporting obligations:

-Each registered firm must annually provide basic information about the firm and the firm's issuer-related practice over the most recent 12-month period. Information to be reported annually includes, among other things, information about audit reports issued by the firm during the year, certain disciplinary information about persons who have joined the firm, and information about fees billed to issuer audit clients, in various categories of services, as a percentage of the firm's total fees billed.

-The rules and forms adopted by the PCAOB identify certain events that, if they occur with respect to a registered firm, must be reported by the firm within 30 days. These reportable events range from such events as a change in the firm's name or contact information, to the institution of certain types of legal, administrative, or disciplinary proceedings against a firm or certain categories of individuals.

The PCAOB will make each firm's annual and special reports available to the public on the PCAOB's Web site, subject to exceptions for information that satisfies specified criteria for confidential treatment.

The rules are scheduled to take effect 60 days after approval by the Securities and Exchange Commission. Firms will then be subject to the special reporting obligations, with the earliest potential special reporting deadline for any firm occurring 90 days after Commission approval. For all firms, the first annual report will be due by June 30, 2009, for the 12-month period ending March 31, 2009.

Interactive Data -- SEC Publishes Proposal Requiring Mutual Funds to Provide Risk/Return Information Using XBRL
For detail, please contact info@zy-cpa.com

The SEC published for public comment a proposed rule, Interactive Data for Mutual Fund Risk/Return Summary. The proposal would require all mutual funds to provide risk/return summary information in an interactive data format using eXtensible Business Reporting Language (XBRL). According to the SEC, XBRL is a computer software language that labels mutual fund risk/return summary information so that readers can more easily find information, and use that information to make investment decisions. Mutual funds would have to provide interactive data as an exhibit to registrant statements.

If the rules are adopted by this fall, the guidance would be applicable to registration statements and certain post-effective amendments that become effective after December 31, 2009.

Comments on the proposal are due August 1, 2008.

International Accounting -- Director of Corporation Finance Discusses IFRS and U.S. Companies
For detail, please contact info@zy-cpa.com

We have added a speech given by John W. White, Director of the Division of Corporation Finance of the SEC, IFRS and U.S. Companies: A Look Ahead. Mr. White discusses the acceptance of IFRS in the United States in the following topics:

-Recent SEC initiatives relating to IFRS;
-Policy issues associated with the possible use of IFRS by U.S. companies;
-SEC staff experience and review of the application of IFRS;
-U.S. readiness for a possible movement by U.S. companies to IFRS;
-Setting and establishing IFRS; and
-How a possible transition to IFRS should be implemented.

Tax Exempt Bonds -- AICPA Issues Article on Accounting and Audit Considerations Regarding Tax Exempt Bonds
For detail, please contact info@zy-cpa.com

We have published a Hot Topic discussing the AICPA's publishing of a nonauthoritative article, Tax-Exempt Bonds - Accounting and Auditing Considerations in the Current Environment. The article was authored by an Ad Hoc group of AICPA members and focuses on tax-exempt debt issued (including conduit debt and obligors under conduit debt) by not-for-profit organizations, municipalities, states, cities and other governmental entities. The article has a particular focus on auction rate securities (ARSs) and variable rate demand obligations (VRDOs). The article includes references to the applicable authoritative guidance for nongovernmental and governmental issuers of tax-exempt debt. Topics covered in the article are:

-Bond restructuring;
-Derivatives;
-Debt covenants;
-Events occurring subsequent to the balance sheet date;
-Other balance sheet classification issues; and
-Going concern considerations.

See our Hot Topic for complete details.

International Financial Reporting -- IASB Issues Agenda for June 17-20, 2008 Meeting
For detail, please contact info@zy-cpa.com

The IASB is scheduled to discuss the following agenda items at its June 17-20, 2008 meeting:

-Annual improvements process;
-Conceptual Framework - Phase B;
-Discontinued Operations (amendments to IFRS 5, Non-current Assets Held for Sale and Discontinued Operations);
-Expert advisory panel on valuing financial instruments in inactive markets;
-Extractive activities research project;
-Fair value measurement;
-FASB hedging project - education session;
-Financial statement presentation;
-IFRIC: approval of interpretations;
-International financial reporting standards for private entities (formerly IFRS for small and medium-sized entities);
-Meeting sweep issues (tentative - depends on earlier sessions); and
-Technical plan.

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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Engagement Quality Review -- PCAOB Proposed Auditing Standard Discussed
For detail, please contact info@zy-cpa.com

We have added a GAAS Update Service that provides discussion and analysis of PCAOB proposed new auditing standard, Engagement Quality Review. The proposal would require an engagement quality review on every engagement conducted pursuant to the standards of the PCAOB and supersede the PCAOB's interim quality control standard on concurring partner review requirements. Among other matters, the proposed new standard:

-Requires the engagement quality reviewer to assess whether there are areas within the engagement that pose a higher risk that the engagement team failed to obtain sufficient competent evidence or to reach an appropriate conclusion;

-Requires concurring approval of issuance before the firm could grant the client permission to use the engagement report, or communicate a conclusion to a client if no report is issued;

-Prohibits the engagement quality reviewer from making decisions on behalf of the engagement team, assuming any responsibilities of the engagement team, and supervising the engagement team;

-Requires the engagement quality reviewer to evaluate the engagement team's documentation; and

-Requires certain specific information to be included as part of the documentation of the engagement quality review.

Internal Controls -- COSO Issues Exposure Draft on Guidance on Monitoring Internal Control Systems
For detail, please contact info@zy-cpa.com

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) has issued for public comment an Exposure Draft (ED), Internal Control-Integrated Framework: Guidance on Monitoring Internal Control Systems. This ED includes proposals intended to more fully develop the monitoring component of COSO's "Internal Control-Integrated Framework." The guidance is designed to help organizations monitor the quality of their internal control systems. This ED makes a number of significant changes to a previously issued ED dealing with the same subject matter as a result of comments received from constituents. Specifically, the ED includes the following:

-A document structure that includes both theoretical concepts of monitoring and practical application guidance;
-A comprehensive framework for implementing effective monitoring that is more clearly linked to risks that controls are expected to mitigate;
-A discussion of the differences between direct and indirect information used for monitoring and greater clarity as to how indirect information can be utilized;
-Examples of how monitoring can occur within computerized applications, as well as over computer applications; and
-A clearer exposition of monitoring as a unifying component of the COSO Framework, including its use in establishing whether internal control is effective.

Comments on the ED are due August 15, 2008.

PCAOB Rules -- PCAOB Issues Final Rules on Periodic Reporting by Registered Public Accounting Firms
For detail, please contact info@zy-cpa.com

As discussed above in our Accounting and SEC Summaries, the PCAOB adopted, Rules on Periodic Reporting by Registered Public Accounting Firms. The new rules establish a reporting framework for annual and special reporting of information and events by accounting firms that are registered with the PCAOB and represents the first such requirements adopted by the PCAOB. The reporting framework includes the following types of reporting obligations:

-Each registered firm must annually provide basic information about the firm and the firm's issuer-related practice over the most recent 12-month period. Information to be reported annually includes, among other things, information about audit reports issued by the firm during the year, certain disciplinary information about persons who have joined the firm, and information about fees billed to issuer audit clients, in various categories of services, as a percentage of the firm's total fees billed.

-The rules and forms adopted by the PCAOB identify certain events that, if they occur with respect to a registered firm, must be reported by the firm within 30 days. These reportable events range from such events as a change in the firm's name or contact information, to the institution of certain types of legal, administrative, or disciplinary proceedings against a firm or certain categories of individuals.

The PCAOB will make each firm's annual and special reports available to the public on the PCAOB's Web site, subject to exceptions for information that satisfies specified criteria for confidential treatment.

The rules are scheduled to take effect 60 days after approval by the Securities and Exchange Commission. Firms will then be subject to the special reporting obligations, with the earliest potential special reporting deadline for any firm occurring 90 days after Commission approval. For all firms, the first annual report will be due by June 30, 2009, for the 12-month period ending March 31, 2009.

Tax Exempt Bonds -- AICPA Issues Article on Accounting and Audit Considerations Regarding Tax Exempt Bonds
For detail, please contact info@zy-cpa.com

As discussed above in our Accounting and SEC Summaries, we have published a Hot Topic discussing the AICPA's publishing of a nonauthoritative article, Tax-Exempt Bonds - Accounting and Auditing Considerations in the Current Environment. The article was authored by an Ad Hoc group of AICPA members and focuses on tax-exempt debt issued (including conduit debt and obligors under conduit debt) by not-for-profit organizations, municipalities, states, cities and other governmental entities. The article has a particular focus on auction rate securities (ARSs) and variable rate demand obligations (VRDOs). The article includes references to the applicable authoritative guidance for nongovernmental and governmental issuers of tax-exempt debt. Topics covered in the article are:

-Bond restructuring;
-Derivatives;
-Debt covenants;
-Events occurring subsequent to the balance sheet date;
-Other balance sheet classification issues; and
-Going concern considerations.

See our Hot Topic 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 -- May 5, 2008 GASB Meeting and Other Matters Discussed
For detail, please contact info@zy-cpa.com

The May 2008 edition of the "GASB Report" has been issued and includes the following discussion items:

-GASB calendar;
-Financial Accounting Foundation (FAF) news;
-May 5, 2008 GASB meeting summary; and
-Upcoming national and regional events in which GASB members and staff are scheduled to participate.

Technical Plan -- GASB Approval of Its Technical Plan for the Second Third of 2008 Discussed
For detail, please contact info@zy-cpa.com

We have added a Governmental GAAP Update Service that discusses the GASB's technical plan as of April 17, 2008. The Update includes a brief summary and discussion of practice issues related to current GASB projects. Projects or practice issues discussed in the Update are:

-Conceptual framework - recognition and measurement attributes;
-Derivative instruments;
-Fund balance reporting and governmental fund type definitions;
-Postemployment benefit accounting and financial reporting;
-Public/private partnerships;
-Reporting unit presentations/GASB Statement No. 14, The Financial Reporting Entity;
-Service efforts and accomplishments;
-AICPA omnibus;
-Annual required contribution adjustments (pension and other postemployment benefits);
-Annual update to the GASB's "Comprehensive Implementation Guide"; and
-Derivative instruments implementation guide.

Tax Exempt Bonds -- AICPA Issues Article on Accounting and Audit Considerations Regarding Tax Exempt Bonds
For detail, please contact info@zy-cpa.com

As discussed above in both our Accounting and SEC Summaries and Auditing and Internal Controls Summaries, we have published a Hot Topic discussing the AICPA's publishing of a nonauthoritative article, Tax-Exempt Bonds - Accounting and Auditing Considerations in the Current Environment. The article was authored by an Ad Hoc group of AICPA members and focuses on tax-exempt debt issued (including conduit debt and obligors under conduit debt) by not-for-profit organizations, municipalities, states, cities and other governmental entities. The article has a particular focus on auction rate securities (ARSs) and variable rate demand obligations (VRDOs). The article includes references to the applicable authoritative guidance for nongovernmental and governmental issuers of tax-exempt debt. Topics covered in the article are:

-Bond restructuring;
-Derivatives;
-Debt covenants;
-Events occurring subsequent to the balance sheet date;
-Other balance sheet classification issues; and
-Going concern considerations.

See our Hot Topic 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