===================================================
Accounting Research
Manager(TM)
Weekly Summary of
Developments
January 26-30, 2009
===================================================
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:
For detail, please contact info@zy-cpa.com
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
Business Combinations -- New Guidance on Statement 141R
Published
SEC Rules -- SEC Staff Issues Compliance and
Disclosure Interpretations
Financial Instruments -- FASB Discusses Financial Instruments
with Characteristics of Equity and Other Matters
Financial Instruments -- FASB Discusses Disclosures about
Certain Financial Assets
Internal Controls -- PCAOB Publishes Staff Guidance on
Auditing Internal Control over Financial Reporting of Smaller Public Companies
Transfer of Assets -- IASB Issues Guidance on Transfers of
Assets from Customers
Derivatives and Hedging -- IASB Publishes Proposed Amendments to
IFRIC Interpretations
Auditing and Internal
Controls Headlines
Audit Engagements -- AICPA Proposed Guidance on the Overall
Objectives of the Independent Auditor and the Conduct of an Audit
Supplementary Information -- AICPA Publishes Proposals on
Supplementary Information
Internal Controls -- PCAOB Publishes Staff Guidance on
Auditing Internal Control over Financial Reporting of Smaller Public Companies
Government Headlines
Global Financial Crisis -- Managing Government Finances in These
Hard Economic Times Discussed
=============================
ACCOUNTING AND SEC HEADLINES:
=============================
Business Combinations --
New Guidance on Statement 141R Published
For detail, please contact info@zy-cpa.com
We have published a new
chapter to our Accounting Standards, “Business Combinations (Entities
Following Statement 141R).” We have also retitled our
existing “Business Combinations” chapter to “Business Combinations (Entities
Not Following Statement 141R).” In the near future, we will also be adding
another chapter to Accounting Standards, “Consolidation (Entities
Following Statement 160).” At that time, we will retitle
our existing “Investments in Subsidiaries” chapter to “Consolidation (Entities
Not Following Statement 160).”
The above enhancements and
clarifications are necessary because the FASB requires calendar year-end
entities to follow the guidance in FASB Statement No. 141 (Revised 2007), Business
Combinations, and FASB Statement No. 160, Noncontrolling
Interests in Consolidated Financial Statements, beginning January 1, 2009.
See our Literature Update for
complete details.
SEC Rules -- SEC Staff
Issues Compliance and Disclosure Interpretations
The staff of the SEC’s
Division of Corporation Finance (Corp Fin) has issued updates to the following
Compliance and Disclosure Interpretations (C&DIs):
-Securities Act Rules;
and
For detail, please contact info@zy-cpa.com
-Going Private
Transactions, Exchange Act Rule 13e-3 and Schedule 13E-3.
For detail, please contact info@zy-cpa.com
These documents provide interpretations by Corp
Fin in a question and answer format.
The first C&DI includes interpretations
of a number of rules under the Securities Act of 1933. Topics updated in this
C&DI include:
-Rules 144 and 145;
-Securities received pursuant
to the Bankruptcy Code;
-Proper registration
statement forms;
-Incorporation by reference;
-Restricted securities; and
-Delivery of a prospectus.
The second C&DI includes
interpretations of Exchange Act Rule 13e-3 as it applies to “going private”
transactions and related Schedule 13E-3. Topics updated in this C&DI
include:
-Going private mergers;
-Definition of an “associate”
for purposes of Rule 13e-3; and
-Exceptions to the
requirement to file a Schedule 13E-3.
Financial Instruments --
FASB Discusses Financial Instruments with Characteristics of Equity and Other
Matters
For detail, please contact info@zy-cpa.com
As discussed in its
"Summary of Board Decisions" publication, the FASB met on January 28,
2009, and discussed the following items:
-Financial instruments with
characteristics of equity;
-Implementation of FASB
Statement No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities; and
-Reconsideration of FASB
Interpretation (FIN) No. 46 (Revised December 2003), Consolidation of
Variable Interest Entities.
Regarding financial
instruments, the FASB discussed classification of puttable
and mandatorily redeemable instruments with
characteristics of equity. The FASB decided to further analyze an approach that
would divide such instruments into the following categories:
-Instruments that are puttable or mandatorily
redeemable upon the occurrence of an event that is certain to occur (such as
death or retirement); and
-All other puttable and mandatorily
redeemable instruments.
At a future meeting, the FASB
is expected to discuss classification and possible separation of instruments in
each category.
The FASB also discussed the
conceptual definitions of a liability and of equity.The
FASB directed its staff to further develop an approach focused on separating
recognition decisions from classification decisions that entails developing:
-Developing a concept to be
used to decide which things qualify for potential recognition; and
-Developing additional
standards-level or concepts-level principles for distinguishing between
liabilities and equity.
The FASB also redeliberated significant issues raised in comments
received on FASB proposed Statement, Accounting for Transfers of Financial
Assets, and decided to limit the circumstances in which a transfer of a
portion of a financial asset is eligible for derecognition.
The FASB affirmed the definition of "participating interest" with
certain changes outlined in the FASB's Summary of
Board Decisions.
Financial Instruments --
FASB Discusses Disclosures about Certain Financial Assets
For detail, please contact info@zy-cpa.com
As discussed in its
"Summary of Board Decisions" publication, the FASB met on January 23,
2009, and discussed issues raised by respondents in comment letters received on
proposed FASB Staff Position (FSP) FAS 107-a, Disclosures about Certain
Financial Assets: An Amendment of FASB Statement No. 107, and decided not
to finalize the proposed FSP. Rather, the FASB decided to issue a new proposed
FSP that would amend FASB Statement No. 107, Disclosures about Fair Value of
Financial Instruments, to require interim and annual disclosures of fair
value measurements for all financial instruments within the scope of that
Statement. The FASB also decided that the proposed FSP would reiterate
qualitative disclosure requirements in Statement 107 and FASB Statement No.
157, Fair Value Measurements. The FASB also decided that entities should
provide the disclosures in Statement 107 for interim and annual periods ending
after March 15, 2009. The FASB expects to issue a proposed FSP on or around
January 30, 2009, with a 30-day comment period.
Internal Controls -- PCAOB
Publishes Staff Guidance on Auditing Internal Control over Financial Reporting
of Smaller Public Companies
For detail, please contact info@zy-cpa.com
The PCAOB staff has
published, Staff Views - An Audit of Internal Control over Financial
Reporting That is Integrated with an Audit of Financial Statements - Guidance
for Auditors of Smaller Public Companies. This guidance explains how
auditors can apply the principles in PCAOB Auditing Standard No. 5, An Audit
of Internal Control over Financial Reporting That is Integrated with an Audit
of Financial Statements, to audits of smaller, less complex public
companies. Auditing Standard No. 5 provides direction to auditors on scaling
the audit based on the company’s size and complexity. This staff guidance
reflects consideration of comments received on the preliminary views guidance
that was issued in October 2007.
Transfer of Assets -- IASB
Issues Guidance on Transfers of Assets from Customers
For detail, please contact info@zy-cpa.com
The IASB has issued
International Financial Reporting Interpretations Committee (IFRIC)
Interpretation 18, Transfers of Assets from Customers. This
Interpretation is particularly relevant for the utility sector. IFRIC 18
clarifies the requirements of IFRSs for agreements in
which an entity receives from a customer an item of property, plant and
equipment that the entity must then use either to connect the customer to a
network or to provide the customer with ongoing access to a supply of goods or
services (such as a supply of electricity, gas or water). Specifically, the
IASB believes IFRIC 18 clarifies the:
-Circumstances in which the
definition of an asset is met;
-Recognition of the asset and
the measurement of its cost on initial recognition;
-Identification of the
separately identifiable services (one or more services in exchange for the
transferred asset);
-Recognition of revenue; and
-Accounting for transfers of
cash from customers.
IFRIC 18 requires entities to
apply the Interpretation prospectively to transfers of assets from customers
received on or after July 1, 2009. Earlier application is permitted provided
the valuations and other information needed to apply to the Interpretation to
past transfers were obtained at the time those transfers were made.
Derivatives and Hedging --
IASB Publishes Proposed Amendments to IFRIC Interpretations
For detail, please contact info@zy-cpa.com
The IASB has published for
public comment an Exposure Draft (ED), Post-Implementation Revisions to
IFRIC Interpretations. This ED would amend IFRIC 9, Reassessment of
Embedded Derivatives, and IFRIC 16, Hedges of a Net Investment in a
Foreign Operation. Specifically, this proposal would amend paragraph 5 of
IFRIC 9 to exclude from its scope embedded derivatives in contracts acquired in
combinations of entities or businesses entities under common control and in the
formation of joint ventures. This amendment results from the
changed definition of a business combination in IFRS 3 (Revised January 2008), Business
Combinations. In addition, this ED would amend paragraph 14 of IFRIC
16 to remove the restriction on the entity that can hold hedging instruments.
As proposed, the amendments
to IFRIC 9 would be effective for annual periods beginning on or after July 1,
2009 with prospective application, and would require an entity that applies
IFRS 3 for an earlier period to disclose that fact and apply the amendment to
IFRIC 9. The amendment to IFRIC 16 would be effective for annual periods
beginning on or after October 1, 2008 with prospective application.
Comments on this proposal are
due March 2, 2009.
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:
=======================================
Audit Engagements -- AICPA
Proposed Guidance on the Overall Objectives of the Independent Auditor and the
Conduct of an Audit
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that discusses the AICPA's Proposed Preface
to Codification of Statements on Auditing Standards (SAS), Principles
Governing an Audit Conducted in Accordance with Generally Accepted Auditing
Standards, and proposed SAS, Overall Objectives of the Independent
Auditor and the Conduct of an Audit in Accordance with Generally Accepted
Auditing Standards. The proposed Preface provides a structure for the
codification of the redrafted SASs, addressing the
following:
-Purpose of an audit and
premise upon which it is conducted;
-The auditor’s
responsibilities;
-Performance of the audit;
and
-The auditor’s report.
The proposed SAS establishes
the auditor’s overall responsibilities when conducting an audit of financial
statements in accordance with GAAS; explains the scope, authority, and
structure of GAAS; and includes requirements establishing the auditor’s general
responsibilities that are applicable in all audits.
Supplementary Information
-- AICPA Publishes Proposals on Supplementary Information
For detail, please contact info@zy-cpa.com
The AICPA has published for
public comment a proposed statement on auditing standards, Required
Supplementary Information, Other Information in Documents Containing Audited
Financial Statements, and Other Information in Relation to the Financial
Statements as a Whole. This proposal combines into one document, proposed
guidance on:
-Required supplementary
information;
-Other information in
documents containing audited financial statements; and
-Other information in
relation to the financial statements as a whole.
As proposed, this guidance
would be effective for audit engagements for periods beginning on or after
December 15, 2009. Early application would be permitted.
Comments on this proposal are
due May 15, 2009.
Internal Controls -- PCAOB
Publishes Staff Guidance on Auditing Internal Control over Financial Reporting
of Smaller Public Companies
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, the PCAOB staff has published, Staff Views -
An Audit of Internal Control over Financial Reporting That is Integrated with
an Audit of Financial Statements - Guidance for Auditors of Smaller Public
Companies. This guidance explains how auditors can apply the principles in
PCAOB Auditing Standard No. 5, An Audit of Internal Control over Financial
Reporting That is Integrated with an Audit of Financial Statements, to
audits of smaller, less complex public companies. Auditing Standard No. 5
provides direction to auditors on scaling the audit based on the company’s size
and complexity. This staff guidance reflects consideration of comments received
on the preliminary views guidance that was issued in October 2007.
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:
======================
Global Financial Crisis --
Managing Government Finances in These Hard Economic Times Discussed
For detail, please contact info@zy-cpa.com
We have added a Governmental
GAAP Update Service that provides guidance and considerations for government
financial managers and advisors to assist them in dealing with the financial
difficulties associated with the recent economic downturn. Specifically, this
Update suggests governments should consider the following actions in evaluating
the soundness of their financial management strategies and responding to the
challenges of the current economic environment:
-Do not panic and make rash
judgments;
-Evaluate revenue
projections, expectations, and potential new resources;
-Analyze and control
expenses, including employee costs;
-Evaluate and manage cash
flow requirements and practices;
-Monitor current developments
in the global, national, state, and local economies and financial markets; and
-Calm employees’ and
constituents’ fears.
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