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Accounting Research Manager(TM)
Weekly Summary of Developments
September 1-5, 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

Financial Assets and Liabilities -- Revisions and Updates to Statement 140 Interpretation Added
Subsequent Events -- FASB Discusses Subsequent Events and Other Matters
EITF Materials -- FASB Issues Additional Meeting Materials for September 10, 2008 EITF Meeting

Auditing and Internal Controls Headlines

Interim Financial Information -- AICPA Issues Proposal on Interim Financial Information

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ACCOUNTING AND SEC HEADLINES:
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Financial Assets and Liabilities --Revisions and Updates to Statement 140 Interpretation Added
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We have revised and updated our interpretation, Financial Assets and Liabilities - Sales, Transfers, and Extinguishments: Interpretations of FASB Statement 140. This publication offers comprehensive guidance on accounting for transactions dealing with financial assets, such as receivables, loans, and securities, under FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Our update was made primarily to reflect the issuance of FASB Statement No. 163, Accounting for Financial Guarantee Insurance Contracts. Specifically, we have updated or added the following interpretations: (a) Interpretation 56-1, "Initial and Subsequent Measurement of Recourse Liabilities," to explain that Statement 163 applies to certain recourse obligations that are financial guarantee insurance contracts issued by insurance entities; (b) Interpretation 114-1, "Recognition of a Guarantee as a Secondary Obligor When Debt Is Extinguished," to reflect the effects of Statement 163; and (c) Interpretation 1-4, "Relevance of Statement 159 to Statement 140," to further highlight the relevance of FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, to the application of Statement 140.

In addition, we have updated the section "Recent Developments," to reflect recent deliberations at the FASB on a variety of relevant projects.

See our Literature Update for complete details.

Subsequent Events -- FASB Discusses Subsequent Events and Other Matters
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As reported in its "Action Alert" publication, the FASB met on August 27, 2008, and discussed plans for incorporating guidance on subsequent events and going concern into U.S. GAAP. Specifically, the FASB decided that any guidance it issues on subsequent events and going concern should converge with both: (a) IAS 1, Presentation of Financial Statements; (b) IAS 10, Events after the Balance Sheet Date, supplemented by disclosure requirements in AICPA Statement on Auditing Standards (SAS) No. 1, Codification of Auditing Standards and Procedures, AU Section 341, "The Auditor's Consideration of an Entity's Ability to Continue as a Going Concern"; and (c) IAS literature with respect to the time horizon for the going concern assessment.

The FASB affirmed several decisions it has reached to date on the subsequent events guidance. Specifically, the Board affirmed that:

-The guidance should reflect the principles underpinning the current subsequent events guidance in existing accounting standards and in the auditing requirements contained in SAS 1, AU Section 560, Subsequent Events;
-Certain minor differences between U.S. GAAP and IFRS should be eliminated or minimized, except for differences in the areas of: (a) Refinancing of short-term obligations; and (b) Curing breaches of borrowing covenants;
-Subsequent events should be considered for adjustment to or disclosure in the financial statements through the date that the financial statements are issued or first available to be issued, and the date through which subsequent events have been considered should be disclosed in the notes to the financial statements;
-Any guidance issued by the FASB will not amend existing standards that are considered to be inconsistent with the principles underpinning AU 560.

In addition, the FASB decided that, to provide appropriate visibility to this new guidance for constituents, it will issue this guidance as new standards, preceded by an Exposure Draft and comment period. The FASB agreed upon a 60-day comment period. The FASB plans to make these changes effective for financial statements issued after the FASB codification is ratified (see our codification hot topic dated January 16, 2008).

The FASB is scheduled to hold a public roundtable discussion on September 8, 2008, to listen to the views of and obtain information from respondents on FASB Preliminary Views, Financial Instruments with Characteristics of Equity. As also reported in its Action Alert publication, the EITF will hold an open meeting on September 10, 2008, and discuss the following issues:

-EITF Issue No. 08-1, "Revenue Recognition for a Single Unit of Accounting";
-EITF Issue No. 08-5, "Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement";
-EITF Issue No. 08-6, "Equity Method Investment Accounting Considerations";
-EITF Issue No. 08-7, "Accounting for Defensive Intangible Assets";
-EITF Issue No. 08-8, "Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That Is Based on the Stock of an Entity's Consolidated Subsidiary."

See our discussion below regarding meeting materials issued for this meeting.

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

-EITF Issue No. 08-5, "Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement" (Supplement No. 1 to Issue Summary No. 1); and
-EITF Issue No. 08-8 (formerly No. 08-F), "Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That Is Based on the Stock of an Entity's Consolidated Subsidiary" (Issue Summary No. 1).

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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Interim Financial Information -- AICPA Issues Proposal on Interim Financial Information
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The Auditing Standards Board of the AICPA has issued for public comment, Proposed Statement on Auditing Standards (SAS), Interim Financial Information. The proposal would amend AU section 722, Interim Financial Information (AICPA, Professional Standards, vol. 1), to accommodate reviews of interim financial information of nonissuers, including companies offering securities pursuant to SEC Rule 144A or participating in private equity exchanges.

As proposed, this guidance would apply when the interim financial information is intended to provide a periodic update to year-end reporting and the accountant has either: (a) audited the entity's latest annual financial statements; or (b) is auditing the current year financial statements and the entity's latest annual financial statements were audited by another auditor. This proposal also clarifies that if these conditions are not met, reviews of interim financial information of nonissuers should be performed in accordance with Statements on Standards for Accounting and Review Services. In addition, the proposal removes the guidance for reviews of the interim financial information of issuers since the AICPA believes such guidance appropriately resides in the auditing standards of the PCAOB.

As proposed, the guidance would be effective for interim periods within fiscal years beginning after December 15, 2008. Early application would be permitted.

Comments on the proposal are due November 3, 2008.

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