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Accounting Research
Manager(TM)
Weekly Summary of
Developments
May 18-21, 2009
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Accounting Research
Manager subscriber,
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Manager database now contains this week's weekly summary of developments. Click
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If you do not have immediate
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Accounting and SEC
Headlines
Income Taxes -- FASB Proposes Guidance on the
Application of FIN 48
FASB Codification -- Articles Added
Leases -- FASB Discusses Leases and Other
Matters
Government Headlines
Audits of Governmental
Entities -- New Edition
of Knowledge-Based Audits Published
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ACCOUNTING AND SEC HEADLINES:
=============================
Income Taxes -- FASB
Proposes Guidance on the Application of FIN 48
For detail, please contact info@zy-cpa.com
The FASB issued for public
comment proposed FASB Staff Position (FSP) FIN 48-d, Application Guidance
for Pass-through Entities and Tax-Exempt Not-for-Profit Entities and Disclosure
Modifications for Nonpublic Entities. This proposed FSP would amend FASB
Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes,
to include guidance on the application of FIN 48 to pass-through entities and
tax-exempt not-for-profit entities. In addition, the proposed FSP would modify
the disclosure requirements of FIN 48 for nonpublic entities as that term is
defined in FASB Statement No. 109, Accounting for Income Taxes. The
proposed FSP addresses the following three issues relating to the application
of FIN 48 to pass-through entities and tax-exempt not-for-profit entities:
-Definition of a tax
position;
-Attribution of income taxes
to an entity or its owners; and
-Financial statements of a
group of related entities.
As proposed, the guidance in
this FSP would be effective upon issuance for all entities currently applying
the provisions of FIN 48. For entities that have not implemented the guidance
in FIN 48, the FASB is proposing that the guidelines be applied upon initial
adoption of FIN 48 (i.e., annual financial statements for years beginning after
December 15, 2008).
Comments on this proposed FSP
are due June 17, 2009.
FASB Codification --
Articles Added
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The FASB, together with its
staff and other specialists, have been working on a project to codify (by
topic)
We have added various
articles to ARM to assist our users in understanding the Codification and its
effects to those who use ARM and the authoritative literature in U.S. GAAP.
See our Literature Update for
complete details.
Leases -- FASB Discusses
Leases and Other Matters
For detail, please contact info@zy-cpa.com
As discussed in its "Summary
of Board Decisions" publication, the FASB met on May 18, 2009, and
discussed the following topics:
-Leases;
-Insurance contracts;
-Amendments to FASB Statement
No. 140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities; and
-Reconsideration of FIN No.
46 (Revised December 2003), Consolidation of Variable Interest Entities.
The FASB discussed how a lessor would apply a right-of-use model, and reached the
following tentative decisions:
-A lessor
would recognize an asset representing its right to receive rental payments (a
lease receivable);
-A lessor
would recognize a liability representing its performance obligation under the
lease—that is, its obligation to permit the lessee to use one of its assets (the
leased item); and
-A lessor
would not recognize any revenue at the inception of a lease contract;
The FASB is expected to
discuss the following issues related to its project on leases at a future
meeting:
-How a lessor
would initially and subsequently measure the leased item, the lease receivable,
and the performance obligation;
-How a lessor
would present the leased item, the lease receivable, and the performance
obligation in its statement of financial position;
-What differentiates a sale
of an asset from a lease; and
-Whether a lessor would apply a right-of-use model to a short-term or
immaterial lease.
The FASB continued
deliberations of its joint project with the IASB on accounting for insurance
contracts. Specifically, the discussion focused on the risk margins an entity
would use to measure an insurance liability and how an entity would account for
the costs it incurs to acquire insurance contracts (such as sales commissions
and underwriting costs). The FASB did not reach any decisions on risk margins.
However, the FASB did decide that an entity should expense all acquisition
costs when incurred and that an entity should not recognize any revenue (or
income) to offset those costs incurred.
The FASB completed its redeliberations of the proposed amendments to Statement
140, modifying certain proposed disclosure requirements and deciding on the
effective date and transition of the new guidance. The FASB affirmed its
previous decision that in principle, an entity should disclose information
about the nature of its continuing involvement in asset transfers accounted for
as sales and the effect of such continuing involvement on its financial
statements. However, the FASB decided that the specific minimum disclosures for
transfers of financial assets in which a transferor has continuing involvement
should be required only for securitizations, asset-backed financing
arrangements, and similar arrangements that are accounted for as sales. The
FASB decided that entities should apply the new guidance at the beginning of
the first fiscal year that begins after November 15, 2009 (e.g., a company with
a calendar year-end would apply the new guidance beginning on January 1, 2010).
Early adoption is prohibited. At that effective date, entities are
required to evaluate each existing qualifying special-purpose entity and
determine whether it should be consolidated.
The FASB also completed its redeliberations of the proposed amendments to FIN 46R and
decided the following:
-That an enterprise will be
required to adopt the new requirements as of the beginning of its first annual
reporting period that begins after November 15, 2009, and interim and annual
reporting periods thereafter;
-Earlier application is
prohibited;
-To add an alternative
transition measurement following the guidance that requires fair value
measurement if determining carrying value is not practicable;
-To provide a fair value
option at transition to the new requirements that would apply on an
entity-by-entity basis; and
-That an enterprise electing
the fair value option should disclose its rationale for electing the option for
certain entities as well as the impact of that election on the
cumulative-effect adjustment to retained earnings.
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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======================
GOVERNMENT HEADLINES:
======================
Audits of Governmental
Entities -- New Edition of Knowledge-Based Audits Published
For detail, please contact info@zy-cpa.com
We have published the 2009
edition of Knowledge-Based Single Audits of Governmental Entities. This
publication is designed to help the auditor efficiently and effectively perform
financial statement audits of state and local governments in accordance with
auditing standards generally accepted in the
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