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Accounting Research Manager(TM)
Weekly Summary of Developments
August 11-15, 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

SEC Staff Speech -- Director of SEC's Division of Corporation Finance Discusses Progress and Future Focus
Credit Derivatives -- Disclosures About Credit Derivatives and Other Matters Discussed
EITF Materials -- FASB Issues Additional Meeting Materials for September 10, 2008 EITF Meeting

Auditing and Internal Controls Headlines

Audit Engagements -- Proposed AICPA Auditing Standard on Communicating Internal Control Related Matters Discussed

Government Headlines

Derivative Instruments -- GASB Statement on Accounting and Financial Reporting for Derivative Instruments Discussed

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ACCOUNTING AND SEC HEADLINES:
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SEC Staff Speech -- Director of SEC's Division of Corporation Finance Discusses Progress and Future Focus
For detail, please contact info@zy-cpa.com

John W. White, Director, Division of Corporation Finance (Corp Fin) at the SEC gave a speech, Corporation Finance in 2008 - A Year of Progress. Mr. White spoke about several key accomplishments of Corp Fin so far in 2008 and expectations on where the division will spend its time during the remainder of 2008.

Topics covered by Mr. White in the speech include:

-The SEC’s Advisory Committee on Improvements to Financial Reporting;
-The SEC’s recently issued interpretive guidance, Commission Guidance on the Use of Company Web Sites;
-Interactive data, also known as eXtensible Business Reporting Language (XBRL);
-Oil and gas reporting;
-Management guidance and PCAOB Auditing Standard (AS) No. 5, An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments;
-IFRS and other international initiatives;
-Mutual recognition;
-Revisions of limited offering exemptions in Regulation D;
-A new project to examine whether certain dollar amounts in SEC rules should be adjusted for inflation;
-The SEC’s 21st Century Disclosure project;
-Beneficial ownership reporting; and
-Various proxy matters.

Credit Derivatives -- Disclosures About Credit Derivatives and Other Matters Discussed
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As reported in its "Action Alert" publication, the FASB met on August 6, 2008, and discussed disclosures about credit derivatives. The FASB redeliberated issues related to the scope, disclosures, and effective date of proposed FASB Staff Position (FSP) FAS 133-b and FIN 45-c, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45. Specifically, the FASB made the following decisions regarding this forthcoming FSP:

-Not to expand the scope to include all financial instruments or credit-risk-related guarantees that are outside the scope of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, or FASB Interpretation (FIN) No. 45, Guarantor's Accounting and Disclosure Requirement for Guarantees, Including Indirect Guarantees of Indebtedness of Others;
-A derivative with multiple underlyings is within the FSP's scope if one (or more) of its underlyings exposes the seller/writer to significant potential loss from credit-risk-related events specified in the contract;
-Credit derivatives embedded in a hybrid instrument are within the scope of this FSP;
-Not to express a preference for the use of external credit ratings when compared to internal groupings in the way the entity manages its risk in the context of an entity's disclosure about a credit derivative's or guarantee's current status of payment/performance risk;
-To include some guidance on how an entity should group similar credit derivatives in complying with disclosure requirements;
-To retain the effective date in the proposed FSP, which is expected to be effective for the first reporting period (annual or interim) ending after November 15, 2008; and
-To include a clarification about the effective date of FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities, to indicate required disclosures should be provided for the first reporting period (annual or interim) that begins after November 15, 2008.

No FASB meetings are scheduled for the week of August 18, 2008. The next FASB meeting is scheduled for August 27, 2008.

EITF Materials -- FASB Issues Additional Meeting Materials for September 10, 2008 EITF Meeting
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The FASB has issued the following materials for the September 10, 2008 EITF meeting:

-Revised agenda; and
-EITF Issue No. 08-5 (Draft Abstract), "Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement" (comment letter).

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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Audit Engagements -- Proposed AICPA Auditing Standard on Communicating Internal Control Related Matters Discussed
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We have added a GAAS Update Service that discusses the AICPA's Proposed Statement on Auditing Standards (SAS), Communicating Internal Control Related Matters Identified in an Audit. This proposal would amend existing AU Section 325 of the same name. The proposed SAS was issued to conform the definitions in AU Section 325 pertaining to the various kinds of deficiencies in internal control and the related guidance for evaluating such deficiencies with the definitions and guidance in a proposed Statement on Standards for Attestation Engagements (SSAE), An Examination of an Entity’s Internal Control Over Financial Reporting That Is Integrated with an Audit of Its Financial Statements. Among other things, the proposed SAS:

-Conforms (a) the definitions of the terms "significant deficiency" and “material weakness” with the definitions in PCAOB Auditing Standard (AS) No. 5, An Audit of Internal Control Over Financial Reporting That is Integrated with an Audit of Financial Statements; and (b) the definition of "significant deficiency" with the definition in the exposure draft of the proposed International Standard on Auditing 265, Communicating Deficiencies in Internal Control; and

-Indicates that the auditor is not required to consider the effects of compensating controls for the purpose of communicating significant deficiencies or material weaknesses. However, if the auditor decides to consider the effects of compensating controls for this purpose, the auditor should: (a) evaluate the design of the compensating controls to determine whether such controls are capable of preventing the deficiency from rising to the level of a significant deficiency or a material weakness; and (b) determine whether the compensating controls were implemented.

As issued, this proposal would be effective for audits of financial statements for periods ending on or after December 15, 2009.

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GOVERNMENT HEADLINES:
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Derivative Instruments -- GASB Statement on Accounting and Financial Reporting for Derivative Instruments Discussed
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We have added a Governmental GAAP Update Service that is the second of a three part series on GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. This Update introduces concepts and basic applications associated with the complex accounting and financial reporting for derivative instruments. Specifically, this Update focuses on measurement and recognition issues related to derivative instruments. Among other things, this Update includes an illustrative example of hedge accounting pursuant to the measurement and recognition requirements of GASB 53.

GASB 53 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.

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:
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