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Accounting Research Manager(TM)
Weekly Summary of Developments
August 4-8, 2008
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Summary.
Accounting and SEC Headlines
Earnings Per Share -- IASB and FASB Issue Proposals to Simplify and
Converge EPS Calculations
Not-for-Profit Endowments -- FASB Issues Guidance on Net Asset Classification
Financial Assets -- Amendments to Statement 140 and FIN 46R Discussed
SEC Reporting -- SEC Publishes Interpretive Guidance on the Use of
Company Websites
Financial Reporting -- SEC Advisory Committee Issues Final Report and
Recommendations
International Accounting -- 2008 Edition of International
Accounting/Financial Reporting Standards Guide Added
International Financial Reporting -- IASB Issues Proposed Improvements to IFRSs
Derivatives and Hedging -- Update to Interpretations Published
Not-for-Profit Organizations -- AICPA Issues Financial Reporting Alert
FASB Codification -- AICPA Issues Financial Reporting Alert on FASB
Codification Project
Auditing and Internal Controls Headlines
Not-for-Profit Organizations -- AICPA Issues Financial Reporting Alert
FASB Codification -- AICPA Issues Financial Reporting Alert on FASB
Codification Project
Government Headlines
Governmental Reporting -- GASB Issues Seeks Input on Suggested Guidelines
for Voluntary Reporting SEA Performance Information
GASB Report Issued -- Derivative Instruments and Other Matters
Discussed
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ACCOUNTING AND SEC HEADLINES:
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Earnings Per Share -- IASB and FASB Issue
Proposals to Simplify and Converge EPS Calculations
The IASB and FASB have issued for public
comment the following Exposure Draft (ED) documents aimed at both: (a)
simplifying the calculation of EPS; and (b) eliminating differences
between the methods required by the two standard setting entities:
-IASB ED, Simplifying Earnings per Share;
For detail, please contact info@zy-cpa.com
-FASB ED, Earnings per Share.
For detail, please contact info@zy-cpa.com
Specifically, the proposals aim to achieve
convergence by:
-Providing a clear principle to determine which
shares and other instruments should be included in the EPS calculation;
-Clarifying the EPS calculation for particular
instruments, such as contracts to sell or repurchase an entity’s own shares and
participating instruments; and
-Simplifying the EPS calculation for
instruments that are accounted for at fair value through profit or loss.
Neither the IASB nor FASB proposals include an
effective date for a final standard. As proposed, the FASB proposal would
require an entity to apply the requirements as of the beginning of a fiscal year,
and interim periods within those fiscal years, generally through retrospective
application to prior periods. Earlier application is prohibited. As proposed,
the IASB proposal would require retrospective application.
Comments on both EDs
are due December 5, 2008.
Not-for-Profit Endowments -- FASB Issues
Guidance on Net Asset Classification
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The FASB issued FASB Staff Position (FSP) FAS
117-1, Endowments of Not-for-Profit Organizations: Net Asset Classification
of Funds Subject to an Enacted Version of the Uniform Prudent Management of
Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds.
This FSP provides guidance on the net asset classification of donor-restricted
endowment funds for a not-for-profit organization that is subject to an enacted
version of the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA).
UPMIFA is a model act that serves as a guideline for states to use in enacting
legislation. This FSP also improves disclosures about an organization’s
endowment funds (both donor-restricted endowment funds and board-designated
endowment funds), whether or not the organization is subject to UPMIFA.
The provisions of this FSP are effective for
fiscal years ending after December 15, 2008. Earlier application is permitted
provided that annual financial statements for that fiscal year have not been
previously issued.
Financial Assets -- Amendments to Statement
140 and FIN 46R Discussed
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As reported in its "Action Alert"
publication, the FASB met on July 30, 2008 and discussed the transition and
effective date for proposed amendments to FASB Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,
and FASB Interpretation (FIN) No. 46 (Revised 2003), Consolidation of
Variable Interest Entities. The FASB decided to change its tentative
decisions reached at its June 11, 2008 meeting regarding transition and
effective date to a single effective date for fiscal years beginning after
November 15, 2009. The FASB clarified that the initial consolidation of a
variable interest entity as a result of the initial application of the proposed
amendments to FIN 46R would require an enterprise to initially measure all
assets and liabilities at fair value, with any difference being recorded as a
cumulative-effect adjustment to retained earnings that would be recorded as of
the beginning of the first fiscal year in which the proposed amendments are
initially applied.
The FASB decided that many of the disclosures
approved for the proposed amendments to Statement 140 and FIN 46R at its June
4, 2008, meeting will be included in a separate Staff Position (FSP). The
purpose of a disclosure-only FSP is to meet financial statement users needs for greater transparency for off-balance-sheet
transactions as well as to provide preparers and others with adequate time to
consider and implement the other proposed amendments to Statement 140 and FIN
46R. The FASB made the following decisions on this separate FSP:
-A nontransferor
enterprise that holds a significant variable interest in a qualifying
special-purpose entity to make certain disclosures required by the proposed
amendments to FIN 46R disclosures;
-The FSP will be effective as soon as possible,
but no later than the first interim reporting period in 2009;
-The FSP will only be applicable to public
companies; and
-The FSP will be exposed for public comment for
30 days.
As also reported in its Action Alert publication,
subsequent to the FASB's EITF Agenda Committee
meeting held on July 28, 2008, the FASB Chairman announced the following
decisions on the proposed new issues:
-Consideration of the Effect of FASB Statement
No. 160, Noncontrolling Interests in Consolidated
Financial Statements, on Accounting for Freestanding Derivative Financial
Instruments Indexed to, and Potentially Settled in, the Stock of a Consolidated
Subsidiary—This issue was added to the EITF agenda;
-Accounting for Purchases and Sales of Partial
Interests in a Subsidiary That Is in Substance Real Estate—This issue was not
added to the EITF agenda; and
-Consideration of the Effect of FASB Statement
No. 141 (Revised 2007), Business Combinations, and Statement 160, on
Accounting for Equity Method Investments—This issue was added to the EITF
agenda.
The FASB is scheduled to hold an educational,
non-decision-making session on August 13, 2008, to discuss topics that are
anticipated to be discussed at future FASB meetings. Those topics are expected
to be posted to the FASB calendar four days prior to the education session.
SEC Reporting -- SEC Publishes Interpretive
Guidance on the Use of Company Websites
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The SEC has issued an interpretive release, Commission
Guidance on the Use of Company Web Sites. This release provides additional
guidance and greater certainty on how companies can use their websites to
provide information to investors in compliance with the federal securities
laws, particularly with respect to the Securities Exchange Act of 1934.
Specifically, the interpretive guidance addresses the following main topics:
-When information posted on a company website
is “public” for purposes of the applicability of Regulation FD;
-Company liability for information on company
websites – including previously posted information, third-party hyperlinks,
summary information and the content of interactive websites;
-The types of controls and procedures advisable
with respect to such information; and
-The format of information presented on a
company website, with the focus on readability, not printability.
The interpretive guidance is effective August
7, 2008.
The SEC is seeking comments on any other
approaches or issues involved in facilitating the use of electronic media,
including those as a result of technological developments, to further the
disclosure purposes of the federal securities laws. Comments are due November
5, 2008.
Financial Reporting -- SEC Advisory
Committee Issues Final Report and Recommendations
For detail, please contact info@zy-cpa.com
The SEC’s Advisory Committee on Improvements to
Financial Reporting (CIFiR) published, Final
Report of the Advisory Committee on Improvements to Financial Reporting to the
United States Securities and Exchange Commission. The report contains 25
recommendations to make financial information more useful and understandable to
investors. Specifically, the report makes recommendations in the following main
areas:
-Increasing the usefulness of information in
SEC filings;
-Enhancing the accounting standards-setting
process;
-Improving the substantive design of new
standards;
-Delineating authoritative interpretive
guidance; and
-Clarifying guidance on financial restatements
and accounting judgments.
International Accounting -- 2008 Edition of
International Accounting/Financial Reporting Standards Guide Added
For detail, please contact info@zy-cpa.com
We have added the 2008 edition of the
publication, International Accounting/Financial Reporting Standards Guide.
This Guide is arranged into 35 chapters and features comprehensive coverage of
all current IASs and IFRSs
promulgated by the IASB. In addition, the Guide includes related
interpretations issued by the IFRIC. General and industry-specific standards
are organized by topic, with the main difference between IASB and US GAAP
identified as well.
The 2008 edition of the Guide is updated
through September 2007 and includes information on IFRS and the proposed
changes on the immediate horizon that will most likely alter the way in which
items must be accounted for and disclosed. In addition to a number of
amendments to other IASB standards, this edition includes coverage of revised
IAS 23, Borrowing Costs, and new IFRS 8, Operating Segments.
International Financial Reporting -- IASB
Issues Proposed Improvements to IFRSs
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The IASB has issued for public comment an
Exposure Draft (ED), Improvements to IFRSs.
This proposal was issued under the IASB's
"Annual Improvements" project which was adopted as an annual process
to make necessary, but non-urgent, amendments to IFRSs
that will not be included in another project. This ED includes proposed
amendments to the following IASB standards:
-IFRS 2, Share-based Payment;
-IFRS 5, Non-current Assets Held for Sale
and Discontinued Operations;
-IFRS 8, Operating Segments;
-IAS 7, Statement of Cash Flows;
-IAS 18, Revenue;
-IAS 36, Impairment of Assets;
-IAS 38, Intangible Assets; and
-IAS 39, Financial Instruments: Recognition
and Measurement.
Comments on the proposal are due November 7,
2008.
Derivatives and Hedging -- Update to
Interpretations Published
For detail, please contact info@zy-cpa.com
We have updated our publication, Derivatives and
Hedging - Interpretations of Statement 133. Specific updates to these
interpretations are:
-The addition of an interpretation to reflect
the issuance of FASB Statement No. 162, The Hierarchy of Generally Accepted
Accounting Principles, which elevates the guidance of FASB Statement 133, Accounting
for Derivative Instruments and Hedging Activities, Implementation Issues to
category (a) of the hierarchy of US GAAP;
-Updates to a number of interpretations to
address the issuance of EITF Issue No. 07-5, “Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity's Own Stock”; and
-Deletion of an interpretation to reflect the
June 25, 2008, withdrawal of the FASB Staff Implementation Guide, Question C21,
“Whether Options (Including Embedded Conversion Options) Are Indexed to both an
Entity's Own Stock and Currency Exchange Rates” in conjunction with the
issuance of Issue 07-5.
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.
Not-for-Profit Organizations -- AICPA Issues
Financial Reporting Alert
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The AICPA has published a Financial Reporting
Alert, Not-for-Profit Organizations - 2008. This Alert is intended to
provide accountants practicing in not-for-profit organizations with an overview
of recent economic, technical, regulatory, and professional developments that
may affect financial management and reporting. The Alert is also designed to be
used by members of an organization’s financial management and audit committee
to identify and understand current accounting and regulatory developments
affecting the organization’s financial reporting. The Alert also includes a
"Resource Central" section that lists additional tools and/or
resources that may be of benefit to those involved in financial reporting for
not-for-profit organizations.
FASB Codification -- AICPA Issues Financial
Reporting Alert on FASB Codification Project
For detail, please contact info@zy-cpa.com
The AICPA has published a Financial Reporting
Alert, FASB Codification Developments - 2008. This Alert is intended to
provide accountants practicing in business and industry with a better
understanding of the FASB Accounting Standards Codification™, outline
the structure of the Codification, as well as to provide some case studies on
how to navigate the Codification and perform accounting research. The Alert
also includes a "Resource Central" section that lists additional
tools and/or resources on recent accounting developments that may be of benefit
to practitioners.
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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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Not-for-Profit Organizations -- AICPA Issues
Financial Reporting Alert
For detail, please contact info@zy-cpa.com
As discussed above in our Accounting and SEC
Summaries, the AICPA has published a Financial Reporting Alert, Not-for-Profit
Organizations - 2008. This Alert is intended to provide accountants
practicing in not-for-profit organizations with an overview of recent economic,
technical, regulatory, and professional developments that may affect financial
management and reporting. The Alert is also designed to be used by members of
an organization’s financial management and audit committee to identify and
understand current accounting and regulatory developments affecting the
organization’s financial reporting. The Alert also includes a "Resource
Central" section that lists additional tools and/or resources that may be
of benefit to those involved in financial reporting for not-for-profit
organizations.
FASB Codification -- AICPA Issues Financial
Reporting Alert on FASB Codification Project
For detail, please contact info@zy-cpa.com
As discussed above in our Accounting and SEC
Summaries, the AICPA has published a Financial Reporting Alert, FASB
Codification Developments - 2008. This Alert is intended to provide
accountants practicing in business and industry with a better understanding of
the FASB Accounting Standards Codification™, outline the structure of
the Codification, as well as to provide some case studies on how to navigate
the Codification and perform accounting research. The Alert also includes a
"Resource Central" section that lists additional tools and/or resources
on recent accounting developments that may be of benefit to practitioners.
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:
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Governmental Reporting -- GASB Issues Seeks
Input on Suggested Guidelines for Voluntary Reporting SEA Performance
Information
The GASB has issued the following two
documents:
-Request for Response, Suggested Guidelines
for Voluntary Reporting of SEA Performance Information;
For detail, please contact info@zy-cpa.com
-Plain-English Article, Suggested Guidelines
for Voluntary Reporting of SEA Performance Information.
For detail, please contact info@zy-cpa.com
The GASB is seeking public comment on the
Request for Response document. The purpose of these documents is to obtain
feedback from constituents at an early stage of the GASB’s
project to develop guidelines to assist state and local governments that
voluntarily choose to report on their service efforts and accomplishments
(SEA).
The Request for Response document provides
proposed suggested guidelines that can help state and local governments more
effectively communicate SEA performance information to citizens, elected
officials, and other interested parties. Constituents are invited to provide
feedback on the suggested guidelines, which include what the GASB has
identified as the four essential components of an effective SEA report and the
six qualitative characteristics of SEA performance information. The
Plain-English Article provides a summary of the key aspects of the suggested
guidelines for voluntary reporting SEA performance information contained in the
GASB's Request for Response document.
The GASB is scheduled to hold both a user forum
and public hearing on this matter. The user forum is scheduled for November 7,
2008, in
Comments on the Request for Response document
are due October 31, 2008.
GASB Report Issued -- Derivative Instruments
and Other Matters Discussed
For detail, please contact info@zy-cpa.com
The July 2008 edition of the GASB Report has
been issued and includes the following topics:
-GASB calendar;
-Girard Miller resigns from GASB;
-GASB Statement No. 53, Accounting and
Financial Reporting for Derivative Instruments;
-GASB pays tribute to former user focus group
facilitator;
-Who's who at the GASB;
-GASB meeting summary; and
-GASB proposed Technical Bulletin, Determining
the Annual Required Contribution for Postemployment
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