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Accounting Research Manager(TM)
Weekly Summary of Developments
June 30 - July 3, 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

Disclosure Checklists -- Checklists Updated through June 30, 2008
Credit Ratings -- SEC Publishes Proposal to Remove References to Credit Rating Agencies in SEC Rules and Forms
Financial Reporting -- SEC Staff Updates Interpretations on Exchange Act Form 8-K
Insider Reporting -- SEC Staff Updates Interpretations on Insider Reporting under Exchange Act Section 16
EITF Matters -- June 12, 2008 Meeting Minutes Issued
Real Estate -- IASB Issues Interpretation on Agreements for the Construction of Real Estate
Investment Hedges -- IASB Issues Interpretation on Hedges of a Net Investment in a Foreign Operation

Government Headlines

Derivative Instruments -- GASB Issues Guidance on Accounting and Financial Reporting for Derivative Instruments

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ACCOUNTING AND SEC HEADLINES:
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Disclosure Checklists -- Checklists Updated through June 30, 2008

As discussed in our Literature Update, the General U.S. GAAP Financial Statement Disclosures Checklist has been updated through June 30, 2008. The disclosure requirements of the following have been incorporated into this checklist:
For detail, please contact info@zy-cpa.com

-FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles;
-FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets; and
-FASB Staff Position (FSP) APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement).

In addition, we have updated the following checklists: (a) the General U.S. GAAP Interim Financial Statement Disclosures Checklist, to reflect the interim disclosures required by the above documents; and (b) the Industry-Specific Disclosures Checklist: Not-for-Profit Organizations, to reflect the disclosure requirements included in FSP SOP 94-3-1 and AAG HCO-1, Omnibus Changes to Consolidation and Equity Method Guidance for Not-for-Profit Organizations.

We have also updated the following SEC disclosure-related checklists through June 30, 2008:
For detail, please contact info@zy-cpa.com

-Financial Statement Disclosures - This checklist outlines the required SEC disclosures for financial statements included in 1934 and 1933 Act domestic filings that are incremental to U.S. GAAP. The checklist is organized by topic.

-Management's Discussion and Analysis - This checklist outlines the required SEC disclosures for MD&A included in 1934 and 1933 domestic filings, including Forms 10-K and S-1.

-Incremental Certifications, Disclosures, and Reporting Mandated by Sarbanes-Oxley - This checklist outlines the certification, disclosure and reporting requirements resulting from the SEC rules mandated by the Sarbanes-Oxley Act of 2002. The checklist provides a by-topic "tickler" and effective dates. It also provides a column for users to note implementation date.

-SEC Form 10-Q checklist - This checklist is for financial and nonfinancial information included in Form 10-Q and is organized by form item number.

Among the revisions we made to these checklists was to reflect the changed effective date for smaller public companies (i.e., nonaccelerated filers with less than $75 million in revenues) to comply with the Section 404(b) auditor attestation requirement of the Sarbanes-Oxley Act of 2002. With the extension, such nonaccelerated filers will now be required to provide the attestation reports in their annual reports for fiscal years ending on or after December 15, 2009.

See our Literature Updates for complete details.

Credit Ratings -- SEC Publishes Proposal to Remove References to Credit Rating Agencies in SEC Rules and Forms
For detail, please contact info@zy-cpa.com

The SEC published for public comment a proposed rule, Security Ratings. This proposal is one of three (the other two proposals relate to investment companies and broker/dealers) issued by the SEC that would amend the use of security ratings by credit rating agencies in SEC rules and forms. The SEC considered whether, in effect, such use placed an “official seal of approval” on ratings that could adversely affect the quality of due diligence and investment analysis. The SEC has concluded that, in many cases, references to credit rating agencies can be removed or revised from its rules and forms. The SEC believes that such removal or revision will ensure that the role assigned to ratings in such rules and forms is consistent with the objectives of having investors make an independent judgment of credit risks.

Comments on the proposal are due September 5, 2008.

Financial Reporting -- SEC Staff Updates Interpretations on Exchange Act Form 8-K
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The SEC staff has published an update to, Exchange Act Form 8-K Compliance and Disclosure Interpretations. The updated interpretations provide additional guidance on required information to be provided under Item 5.02(b) of Form 8-K when a director resigns, retires, or refuses to stand for re-election. Among other things, the updated interpretations provide additional views on possible disclosures when a director does not retire in accordance with a corporate governance policy of the company (e.g., mandatory retirement age).

Insider Reporting -- SEC Staff Updates Interpretations on Insider Reporting under Exchange Act Section 16
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The SEC staff has published an update to, Exchange Act Section 16 and Related Rules and Forms Compliance and Disclosure Interpretations. The updated interpretations provide additional guidance on officer, director, and beneficial owner reporting requirements under Section 16 of the Securities Exchange Act of 1934. While the majority of the updates were cosmetic, the SEC staff did remove guidance on Form 4 and Form 5 requirements for a transaction executed in increments on the same day.

EITF Matters -- June 12, 2008 Meeting Minutes Issued
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The final minutes of the June 12, 2008 EITF meeting have been issued. The minutes document the meeting results as previously described in our Hot Topic dated June 25, 2008. As a result of the FASB's ratification of its earlier decisions, the EITF has issued for public comment a draft abstract, EITF Issue No. 08-5, "Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement." This Issue discusses the application of fair value to debt instruments issued with an inseparable contractual third-party enhancement (e.g., a guarantee):
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The EITF draft abstract of Issue 08-5 reflects the following:

-The scope of Issue 08-5 should apply to an issuer's accounting for all third-party credit enhancements that are issued with and are inseparable from a debt instrument that is measured at fair value;
-An issuer should not include the effect of the third-party credit enhancement in the fair value measurement of the liability;
-The unit of accounting for the debt does not include the guarantee (or other third-party credit enhancement);
-A guarantee does not represent an asset of the issuer; and
-An entity that has outstanding debt within the scope of Issue 08-5 should disclose the existence of the credit enhancement.

Comments on the draft abstract are due August 4, 2008.

Real Estate -- IASB Issues Interpretation on Agreements for the Construction of Real Estate
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The IASB has issued IFRIC 15, Agreements for the Construction of Real Estate. IFRIC 15 standardizes accounting for the recognition of revenue among real estate developers for sales of units, such as apartments or houses, before construction is complete. This interpretation provides guidance on how to determine whether an agreement for the construction of real estate is within the scope of IAS 11, Construction Contracts or IAS 18, Revenue, and when revenue from the construction should be recognized. IFRIC 15 is expected to result in some entities changing from recognizing revenue using the percentage-of-completion method, to recognizing revenue at a single time (i.e., at completion upon or after delivery).

IFRIC 15 is effective for annual periods beginning on or after January 1, 2009 and requires retrospective application. Earlier application is permitted.

Investment Hedges -- IASB Issues Interpretation on Hedges of a Net Investment in a Foreign Operation
For detail, please contact info@zy-cpa.com

The IASB has issued IFRIC 16, Hedges of a Net Investment in a Foreign Operation. This interpretation provides guidance on accounting for the hedge of a net investment in a foreign operation in an entity's financial statements. Specifically, IFRIC 16 provides:

-The presentation currency does not create an exposure to which an entity may apply hedge accounting. Consequently, a parent entity may designate as a hedged risk only the foreign exchange differences arising from a difference between its own functional currency and that of its foreign operation.
-The hedging instrument(s) may be held by any entity or entities within the group.
-While IAS 39, Financial Instruments: Recognition and Measurement, must be applied to determine the amount that needs to be reclassified to profit or loss from the foreign currency translation reserve in respect of the hedging instrument, IAS 21, The Effects of Changes in Foreign Exchange Rates, must be applied in respect of the hedged item.

IFRIC 16 is effective for annual periods beginning on or after October 1, 2008 and does not require retrospective application. Earlier application is permitted.

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GOVERNMENT HEADLINES:
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Derivative Instruments -- GASB Issues Guidance on Accounting and Financial Reporting for Derivative Instruments
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The GASB issued GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. This Statement is intended to improve how state and local governments report information about derivative instruments in their financial statements. Specifically, GASB 53 requires governments to measure most derivative instruments at fair value in their financial statements that are prepared using the economic resources measurement focus and the accrual basis of accounting.

GASB 53 also addresses hedge accounting requirements, providing specific criteria that governments will use to determine whether a derivative instrument results in an effective hedge. Under this Statement:

-Changes in fair value for effective hedges will be recognized in the reporting period to which they relate.
-Changes in fair value of effective hedges do not affect current investment revenue, but are instead reported as deferrals in the statement of net assets or the balance sheet.
-Derivative instruments that either do not meet the criteria for an effective hedge or are associated with investments that are already reported at fair value are classified as investment derivative instruments for financial reporting purposes. Changes in fair value of these derivative instruments are reported as part of investment revenue in the current reporting period.
-Additional disclosures are required, including the requirement to provide a summary of the government's derivative instrument activity, its objectives for entering into derivative instruments, and their significant terms and risks.

GASB 53 is effective for financial statements for reporting periods beginning after June 15, 2009. Earlier application is encouraged.

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