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Accounting Research
Manager(TM)
Weekly Summary of
Developments
September 22-26, 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
Loss Contingencies -- FASB Decides to Delay Issuance of
Final Standard
Discontinued Operations -- FASB and IASB Issue Proposals to
Revise the Definition of Discontinued Operations
Income Taxes -- FASB to Discuss FIN 48 and Other
Matters
EITF Matters -- FASB Ratifies September 10, 2008 EITF
Decisions
Derivatives and Hedging
Activities -- FASB Staff
Issues Revisions to Proposed Statement 133 Implementation Guide
International Accounting -- IASB Proposes Amendments to IFRS 1 for
Retrospective Application
International Accounting -- White Paper Discussing Issues
Associated With Adopting IFRS Added
Foreign Issuers -- SEC Publishes Enhancements to Foreign
Issuer Reporting Requirements
Tender Offers -- SEC Publishes Final Rule on
Cross-Border Tender Offers
EDGAR Filers -- SEC Publishes Updated EDGAR Filer
Manual
Auditing and Internal
Controls Headlines
Service Organizations -- Additional Interpretive Guidance
Discussed
Government Headlines
Compilation and Reviews -- AICPA's
Reliability Project Discussed
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ACCOUNTING AND SEC HEADLINES:
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Loss Contingencies -- FASB
Decides to Delay Issuance of Final Standard
For detail, please contact info@zy-cpa.com
We have prepared a Hot Topic
that discusses the FASB's decision to delay issuance
of a final standard that would amend the disclosure requirements in FASB
Statement No. 5, Accounting for Contingencies, and FASB Statement No.
141 (Revised 2007), Business Combinations. The FASB cited significant
concerns raised by constituents to its exposure draft (ED), Disclosure of
Certain Loss Contingences. As proposed, the enhanced disclosure
requirements would have been effective for annual financial statements ending
after December 15, 2008. Specifically, constituents raised concerns about
having to disclose prejudicial information and waive attorney-client privilege,
as well as, not having adequate time to implement additional controls and
procedures to collect and review the additional information needed to prepare
the expanded disclosures for their 2008 annual financial statements.
The FASB agreed with its
staff recommendation to develop an alternative model for loss contingency
disclosures that would attempt to address those concerns. The FASB staff would
ask field testing volunteers to prepare two sets of sample disclosures: one set
based on proposed requirements of the ED and a second set based on the
alternative model. The staff would seek investors’ feedback about the sample
disclosures from the field test.
See our Hot Topic for
complete details.
Discontinued Operations --
FASB and IASB Issue Proposals to Revise the Definition of Discontinued
Operations
As part of their joint
project to develop a common definition and required disclosures of discontinued
operations, the FASB and IASB have issued the following two proposals for
public comment:
-FASB Staff Position (FSP)
FAS 144-d, Amending the Criteria for Reporting a Discontinued Operations;
and
For detail, please contact info@zy-cpa.com
-IASB Exposure Draft (ED), Discontinued
Operations (proposed amendments to IFRS 5).
For detail, please contact info@zy-cpa.com
The FASB FSP would amend FASB
Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets. Specifically, the proposed FSP would amend the definition of a
discontinued operation as a component of an entity that is:
-An operating segment, as
defined in FASB Statement No. 131, Disclosures about Segments of an
Enterprise and Related Information, and either has been disposed of or is
classified as held for sale; or
-A business, as that term is
defined in FASB Statement No. 141 (Revised 2007), Business Combinations,
or a nonprofit activity that meets the criteria to be classified as held for
sale on acquisition.
As a result, this FSP would
establish when the income effects of a component of an entity would be reported
in the discontinued operations section of the income statement. The FSP also
would amend the disclosure requirements of Statement 144 for all components of
an entity that either have been disposed of or are classified as held for sale
regardless of whether a component of an entity is reported in the income
statement as a discontinued operation or in continuing operations.
The IASB's
ED would amend IFRS 5, Non-current Assets Held for Sale and Discontinued
Operations, to revise the definition of discontinued operations and require
additional disclosure related to components of an entity that have been (or
will be) disposed of. The ED proposes a definition of discontinued operations
based on the concept of "operating segments" provided in IFRS 8, Operating
Segments. Specifically, the ED proposes changing the definition of a
discontinued operation to a component of an entity that:
-Is an operating segment, as
that term is defined in IFRS 8, and either has been disposed of or is
classified as held for sale; or
-Is a business, as that term
is defined in IFRS 3 (Revised 2008), Business Combinations, that meets
the criteria to be classified as held for sale on acquisition.
As proposed, the FASB FSP
would be effective for financial statements issued for fiscal years beginning
after December 15, 2009, and interim periods within those fiscal years. No
effective date has been proposed in the IASB ED. Earlier application is
permitted under both proposals.
Comments on both the FASB and
IASB proposals are due January 23, 2009.
Income Taxes -- FASB to
Discuss FIN 48 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 October 1, 2008, to
discuss:
-Applicability of FASB
Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes,
to private entities; and
-Mergers and acquisitions by
a not-for-profit organization.
The FASB is expected to
discuss issues relating to whether private companies should be exempt from
certain disclosure requirements of FIN 48. The FASB is also expected to discuss
providing guidance on the applicability of FIN 48 to pass-through and not-for-profit
entities. In addition, the FASB is expected to continue its discussion and
decide whether to retain or modify the proposed requirements for both: (a)
initial recognition and measurement of acquisitions by not-for-profit
organizations; and (b) subsequent accounting for any goodwill recognized
as a result of the acquisition.
EITF Matters -- FASB
Ratifies September 10, 2008 EITF Decisions
For detail, please contact info@zy-cpa.com
We have prepared a Hot Topic that discusses
the FASB's ratification of decisions made by the EITF
at its September 10, 2008 meeting. Specifically, the FASB ratified the final
consensus reached in EITF Issue No. 08-5, "Issuer's Accounting
for Liabilities Measured at Fair Value with a Third-Party Credit
Enhancement." In addition, the FASB ratified the consensuses-for-exposure
reached in:
-EITF Issue No. 08-6,
"Equity Method Investment Accounting Considerations";
-EITF Issue No. 08-7,
"Accounting for Defensive Intangible Assets"; and
-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 Hot Topic for
complete details.
Derivatives and Hedging
Activities -- FASB Staff Issues Revisions to Proposed Statement 133
Implementation Guide
For detail, please contact info@zy-cpa.com
The FASB has issued revisions
to its, Proposed Staff Implementation Guidance on Statement 133.
Specifically, the FASB has revised Statement 133 Implementation Issue (DIG)
Issue No. B12, "Beneficial Interests Issued By Qualifying Special-Purpose
Entities." In its revision, the FASB notes that it has released a revised
Exposure Draft (ED), Accounting for Transfers of Financial Assets, which
would amend FASB Statement No. 140, Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities. The ED would remove
the concept of a qualifying special-purpose entities (QSPEs) from Statement 140. If the ED is finalized as
proposed, the guidance in Issue B12 would no longer be relevant and would be
withdrawn.
International Accounting
-- IASB Proposes Amendments to IFRS 1 for Retrospective Application
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment an Exposure Draft (ED), Additional Exemptions for First-time
Adopters, that would amend IFRS 1, First-time Adoption of International
Financial Reporting Standards. This ED address the retrospective
application of IFRSs in selected areas and are aimed
at ensuring that entities applying IFRSs will not
face undue cost or effort in the transition process. Specifically, this ED
proposes to exempt companies:
-From retrospective
application of IFRSs for oil and gas assets using the
full cost method and for operations subject to rate regulation; and
-With existing leasing
contracts accounted for in accordance with IFRIC 4, Determining whether an
Arrangement contains a Lease, from reassessing the classification of those
contracts according to IFRSs when the same
classification has previously been made in accordance with prior GAAP.
A proposed effective date has
not been included in the proposal. However, the proposal does indicate early
application will be permitted.
Comments on this proposal are
due January 23, 2009.
International Accounting
-- White Paper Discussing Issues Associated with Adopting IFRS Added
For detail, please contact info@zy-cpa.com
We have added a White Paper, Are You
Ready to Adopt IFRS? This White Paper discusses issues companies should
begin to address as they prepare to transition to IFRS. The White Paper also
discusses the SEC's recent decision to propose a "Roadmap" for use of
IFRS in the
Foreign Issuers -- SEC
Publishes Enhancements to Foreign Issuer Reporting Requirements
For detail, please contact info@zy-cpa.com
The SEC has published a final
rule, Foreign Issuer Reporting Enhancements. Among other things, the
amendments included in this final rule will:
-Permit foreign issuers to
test their qualification to use the forms and rules available to foreign
private issuers on an annual basis, rather than on the continuous basis that is
currently required;
-Shorten the filing deadline
for Form 20-F from six months to four months after the foreign private issuer’s
fiscal year-end (a three-year transition period for this provision is
provided);
-Eliminate an instruction to
Item 17 of Form 20-F that permits certain foreign private issuers to omit
segment data from their U.S. GAAP financial statements;
-Amend Rule 13e-3 under the
Securities Exchange Act of 1934 by reflecting the new termination of reporting
and deregistration rules for foreign private issuers;
-Require foreign private
issuers that are required to provide a U.S. GAAP reconciliation to do so
pursuant to Item 18 of Form 20-F; and
-Amend Form 20-F to require
foreign private issuers to disclose certain information, including information
about its certifying accountant, the fees and charges paid by holders of
American Depository Receipts, and corporate governance practices.
This rule is effective 60
days after publication in the Federal Register. However, the final rule
includes a number of compliance dates for specific amendments and (or) forms.
Readers should consult the full text of the rule for further information.
Tender Offers -- SEC
Publishes Final Rule on Cross-Border Tender Offers
For detail, please contact info@zy-cpa.com
The SEC has published a final
rule, Commission Guidance and Revisions to the Cross-Border Tender Offer,
Exchange Offer, Rights Offerings, and Business Combination Rules and Beneficial
Ownership Reporting Rules for Certain Foreign Institutions. This final rule
includes changes to current rules which the SEC believes will expand and
enhance the utility of exemptions for business combination transactions and
rights offerings and to encourage offerors and
issuers to permit
-Codify existing SEC
interpretive positions and exemptive orders in the
cross-border area;
-Provide additional
interpretive guidance on several topics related to cross-border business
combinations; and
-Include changes to allow
certain foreign institutions to file on Schedule 13G to the same extent as
would be permitted for their U.S. counterparts, where specified conditions are
satisfied.
This final rule is effective
60 days from publication in the Federal Register.
EDGAR Filers -- SEC
Publishes Updated EDGAR Filer Manual
For detail, please contact info@zy-cpa.com
The SEC published a final
rule, Adoption of Updated EDGAR Filer Manual. This final rule includes
revisions to the SEC's Electronic Data Gathering, Analysis, and Retrieval
System (EDGAR) Filer Manual to reflect changes to the EDGAR system.
Specifically, the revisions included in this update are being made primarily to
support the rule amendments made to mandate the electronic filing of
information required by Securities Act of 1933 Form D with the implementation
of a new Form D online application.
This updated filer manual is
effective upon publication in the Federal Register.
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
=======================================
AUDITING AND INTERNAL
CONTROLS HEADLINES:
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Service Organizations --
Additional Interpretive Guidance Discussed
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that focuses on practical issues relating to Statement on Auditing
Standards (SAS) No. 70, Service Organizations, by using a “Question
& Answer” format designed to provide practical discussion, advice, and
specific implementation guidance. The Q & As address various issues including:
-Factors that a user auditor
should consider when using a service auditor’s report that is intended to
satisfy the needs of several different user auditors;
-Actions that the user
auditor should take if he or she believes that the service auditor’s report is
not sufficient to meet his or her audit objectives;
-Audit considerations if the
service organization’s description of controls placed in operation is as of a
date that precedes the beginning of the period under audit for the user
organization;
-Considerations by a user
auditor for determining whether a service auditor’s report is satisfactory and
competent to meet the objectives of his or her audit engagement;
-Whether the service auditor
may prepare the description of controls and control objectives in connection
with his or her engagement to report on controls placed in operation at the
service organization; and
-Whether a service auditor
may expand his or her report to describe the risk of projecting to the future
conclusions about the effectiveness of a service organization’s controls.
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:
======================
Compilation and Reviews --
AICPA's Reliability Project Discussed
For detail, please contact info@zy-cpa.com
We have added a Governmental
GAAP Update Service that discusses the AICPA's
"Reliability Project." This Project is focused on re-evaluating the
control activities-related independence issues in conjunction with financial
statement reviews. This Project, in its current form, is not focused on eliminating
the need for independence in providing compilation or review services, but
merely repositioning the independence requirement with regards to CPAs
performing control activities for management with respect to a review
engagement. The theory for this reconsideration is that the end result of the
CPA’s services should not be to achieve independence; but rather to produce
reliable financial statements.
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