===================================================
Accounting Research
Manager(TM)
Weekly Summary of
Developments
February 23-27, 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
Contingencies -- FASB's Votes
to Amend Accounting for Acquired Contingencies under Statement 141R
Mergers and Acquisitions -- FASB Discusses Mergers and
Acquisitions by Not-for-Profit Organizations
Executive Compensation -- SEC Staff Publishes Compliance and
Disclosure Interpretations
Penalties -- SEC Increases Civil Monetary Penalties
International Financial
Reporting -- IASB Issues
Agenda for March 5, 2009 IFRIC Meeting
Construction -- Revisions to Construction Guide
Published
Auditing and Internal
Controls Headlines
Financial Statements -- PCAOB Auditing Standard No. 6 on
Evaluating Consistency in Financial Statements Discussed
Not-for-Profit
Organizations -- New
Edition of Knowledge-Based Audits of Not-for-Profit Organizations with Single
Audits Published
Construction -- Revisions to Construction Guide Published
Government Headlines
Technical Plan -- Approval of GASB Technical Plan
Discussed
=============================
ACCOUNTING AND SEC HEADLINES:
=============================
Contingencies -- FASB's Votes to Amend Accounting for Acquired Contingencies
under Statement 141R
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on February
25, 2009, and discussed: (a) accounting for assets acquired and
liabilities assumed in a business combination that arise from contingencies; (b)
insurance contracts; (c) measurement of liabilities; and (d)
amendment of FASB Statement No. 162, The Hierarchy of Generally Accepted
Accounting Principles, and approval of the FASB Accounting Standards CodificationTM (the Codification).
The FASB redeliberated
significant issues raised in comments received on proposed FSP FAS 141(R)-a, Accounting
for Assets and Liabilities Assumed in a Business Combination That Arise from
Contingencies, and decided to:
-Amend the guidance in FASB
Statement No. 141 (Revised 2007), Business Combinations, to require that
assets acquired and liabilities assumed in a business combination that arise
from contingencies be recognized at fair value if fair value can be reasonably
estimated. If fair value of such an asset or liability cannot be reasonably estimated,
the asset or liability would be recognized in accordance with FASB Statement
No. 5, Accounting for Contingencies, and FASB Interpretation No. 14, Reasonable
Estimation of the Amount of a Loss.Further, the FASB decided to remove the subsequent
accounting guidance for assets and liabilities arising from contingencies from
Statement 141R, and carry forward without significant revision the guidance in
FASB Statement No. 141, Business Combinations. However, the FASB decided
that the word "determined" in Statement 141 should be replaced with
"reasonably estimated."
-Amend the disclosure
requirements in Statement 141R to eliminate the requirement to disclose an
estimate of the range of outcomes of recognized contingencies at the
acquisition date. For unrecognized contingencies, the FASB decided to require
that entities include only the disclosures required by Statement 5 and that
those disclosures be included in the business
combination footnote.
-Require that contingent
consideration arrangements of an acquiree assumed by
the acquirer in a business combination should be treated as contingent
consideration of the acquirer and should be initially and subsequently measured
at fair value in accordance with Statement 141R.
Affirm its decision that
contingent consideration be excluded from the scope of the final FSP.
The FASB began deliberations
on the joint project on accounting for insurance contracts and agreed to
explore an approach where an insurance contract is measured at a current
fulfillment value rather than fair value as defined in FASB Statement No. 157, Fair
Value Measurements.
The FASB also discussed
potential revisions to the scope, guidance, and effective date of proposed FSP
FAS 157-c, Measuring Liabilities under FASB Statement No. 157, and
decided that as a result of various changes, the FSP will be reexposed for an additional 30-day period.
The FASB discussed the entire
process of creating the Codification, including the overall intent of the
Codification, the steps in verifying information in the Codification, and the
resolution of particular issues arising during the one-year verification
period. Among other things, the FASB decided that, other than the transition
provided for AICPA TIS software revenue recognition material, the remainder of
the Codification would be effective July 1, 2009. No additional special
transition provisions would be provided.
Mergers and Acquisitions
-- FASB Discusses Mergers and Acquisitions by Not-for-Profit Organizations
For detail, please contact info@zy-cpa.com
As reported in its "Summary of Board
Decisions" publication, the FASB met on February 26, 2009, and discussed
certain issues that arose during the drafting of a final statement on mergers
and acquisitions by a not-for-profit entity. The FASB decided that the final
statement will include guidance clarifying the following:
-At the merger date, a newly
merged entity must carry forward the merging entities’ classifications and
designations of their assets and liabilities as necessary to subsequently apply
other GAAP unless: (a) the merger results in a modification of a
contract in a manner that would change those previous classifications or
designations; (b) reclassifications are necessary to conform the
accounting policies of the merging entities.
-At the merger date, a newly
merged entity may not elect the fair value option for a financial asset or
financial liability under FASB Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities.
-A not-for-profit acquirer
within the scope of the AICPA Audit and Accounting Guide, Health Care,
should present a charge in its statement of activities for goodwill not
recognized as an asset within the performance indicator.
Executive Compensation --
SEC Staff Publishes Compliance and Disclosure Interpretations
For detail, please contact info@zy-cpa.com
The staff of the SEC's
Division of Corporation Finance (Corp Fin) has published Compliance and
Disclosure Interpretations (C&DIs), American
Recovery and Reinvestment Act of 2009. These C&DIs
provide Corp Fin's interpretations of Section 7001 of the American Recovery
and Reinvestment Act of 2009 (the Act). Section 7001 of the Act provides a
“say-on-pay” provision that requires any recipient of funds under the Troubled
Assets Relief Program (TARP) to permit a separate shareholder vote to approve
the compensation of executives in accordance with the compensation disclosure
rules of the SEC, during the period in which any obligation arising from
financial assistance provided under the TARP remains outstanding.
The C&DIs
provide guidance on the following questions:
-Is a separate shareholder
vote on executive compensation required for any meeting other than the annual
meeting of shareholders for which proxies will be solicited for the election of
directors or a special meeting in lieu of an annual meeting?
-If a smaller reporting
company is subject to the Act's say-on-pay provision, must the smaller
reporting company provide compensation discussion and analysis disclosure?
-If the company faces special
circumstances and would like to request acceleration of Rule 14a-6(a)'s ten-day
review period, how should it proceed?
Penalties -- SEC Increases
Civil Monetary Penalties
For detail, please contact info@zy-cpa.com
The SEC has published a final
rule, Adjustments to Civil Monetary Penalty Amounts. This rule
implements required inflation adjustments to maximum civil monetary penalties
under the following laws:
-The Securities Act of 1933;
-The Securities Exchange Act
of 1934;
-The Investment Company Act
of 1940;
-The Investment Advisers Act
of 1940; and
-Certain penalties under the
Sarbanes-Oxley Act of 2002.
The increase to civil
monetary penalties included in this final rule covers the monetary penalty
provisions contained in the statutes administered by the SEC, as well as civil
monetary penalties that may be imposed by the PCAOB.
This rule is effective upon
publication in the Federal Register.
International Financial
Reporting -- IASB Issues Agenda for March 5, 2009 IFRIC Meeting
For detail, please contact info@zy-cpa.com
The IASB has issued an agenda
for the March 5, 2009 meeting of the International Financial Reporting
Interpretations Committee (IFRIC). IFRIC is expected to discuss the following
areas:
-Update on IFRIC projects;
-Costs for compliance with
the European Commission Regulation Concerning the Registration, Evaluation,
Authorization and Restriction of Chemicals;
-Review of tentative agenda
decisions; and
-Staff recommendations for
tentative agenda decisions, including the accounting for sales costs.
Construction -- Revisions
to Construction Guide Published
For detail, please contact info@zy-cpa.com
We have published the 2008 edition of Construction
Guide: Accounting and Knowledge-Based Audits. The primary objective of this
publication is to provide auditors, contractors, home builders, real estate
developers, and their advisors with up-to-date insights and analysis. This
edition has been updated, among other things, to reflect:
-FASB Statement No. 141
(Revised 2007), Business Combinations;
-FASB Statement No. 157, Fair
Value Measurements;
-FASB Statement No. 158, Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans - An
Amendment of FASB Statements No. 87, 88, 106, and 132(R);
-FASB Statement No. 159, The
Fair Value Option for Financial Assets and Financial Liabilities - Including an
Amendment of FASB Statement No. 115;
-FASB Statement No. 160, Noncontrolling Interests in Consolidated
Financial Statements - An Amendment of ARB No. 51;
-FASB Interpretation (FIN)
No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of
FASB Statement No. 109;
-FASB Staff Position (FSP)
FIN 48-1, Definition of "Settlement" in FASB Interpretation No.
48; and
-FSP FIN 48-2, Effective
Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises.
See our Literature Update for
complete details.
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:
=======================================
Financial Statements --
PCAOB Auditing Standard No. 6 on Evaluating Consistency in Financial Statements
Discussed
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that provides discussion and analysis of PCAOB Auditing Standard No. 6,
Evaluating Consistency of Financial Statements. AS 6 updates the
auditor's responsibilities to evaluate and report on the consistency of an
entity’s financial statements and align the auditor's responsibilities with
FASB Statement No. 154, Accounting Changes and Error Corrections. AS 6
also clarifies that auditor reports should indicate
whether an adjustment to previously issued financial statements results from a
change in accounting principle or the correction of a misstatement. In
addition, AS 6 removes the GAAP hierarchy from its interim auditing standards.
Not-for-Profit
Organizations -- New Edition of Knowledge-Based Audits of Not-for-Profit Organizations
with Single Audits Published
For detail, please contact info@zy-cpa.com
We have published a new edition of Knowledge-Based
Audits of Not-for-Profit Organizations with Single Audits. This publication
combines everything an auditor needs to perform financial statement audits in
accordance with Government Auditing Standards, and single audits in
accordance with OMB Circular A-133. This edition of the publication reflects
comprehensive coverage of current authoritative literature including extensive
revisions and updated discussions to reflect the following:
-Auditing pronouncements
through AICPA Statement on Auditing Standards (SAS) No. 114, The Auditor's
Communication with Those Charged with Governance; and
-Accounting pronouncements
through FASB Statement No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities-Including an Amendment of FASB Statement No. 115.
See our Literature Update for
complete details.
Construction -- Revisions
to Construction Guide Published
For detail, please contact info@zy-cpa.com
As discussed above in our Accounting and SEC
Summaries, we have published the 2008 edition of Construction Guide:
Accounting and Knowledge-Based Audits. The primary objective of this
publication is to provide auditors, contractors, home builders, real estate
developers, and their advisors with up-to-date insights and analysis. This
edition has been updated, among other things, to reflect:
-FASB Statement No. 141
(Revised 2007), Business Combinations;
-FASB Statement No. 157, Fair
Value Measurements;
-FASB Statement No. 158, Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans - An
Amendment of FASB Statements No. 87, 88, 106, and 132(R);
-FASB Statement No. 159, The
Fair Value Option for Financial Assets and Financial Liabilities - Including an
Amendment of FASB Statement No. 115;
-FASB Statement No. 160, Noncontrolling Interests in Consolidated
Financial Statements - An Amendment of ARB No. 51;
-FASB Interpretation (FIN)
No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of
FASB Statement No. 109;
-FASB Staff Position (FSP)
FIN 48-1, Definition of "Settlement" in FASB Interpretation No.
48; and
-FSP FIN 48-2, Effective
Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises.
See our Literature Update for
complete details.
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:
======================
Technical Plan -- Approval
of GASB Technical Plan Discussed
For detail, please contact info@zy-cpa.com
We have published a
Governmental GAAP Update that discusses the GASB's
approval of its technical plan for the first third of 2009. The updated
technical agenda includes changes to the previous technical agenda in terms of
planned issuance dates and the addition of certain new projects. For example,
the GASB added projects to its agenda relating to: (a) bankruptcies; (b)
financial instruments; and (c) certain implementation issues with other postemployment benefits (research project). See the Update
for complete details.
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