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Accounting Research
Manager(TM)
Weekly Summary of
Developments
May 25-29, 2009
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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:
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
Subsequent Events -- FASB Issues Guidance on Accounting and
Disclosure of Subsequent Events
Mergers and Acquisitions -- FASB Issues Guidance for
Not-for-Profit Entities
Revenue Recognition -- FASB and IASB Discuss Joint Revenue
Recognition Project
Fair Value Disclosures -- FASB Discusses Improving Disclosures
About Fair Value Measurements
Fair Value Measurement -- IASB Issues Proposal
Pension Plans -- IASB Issues Proposal on Prepayments of
a Minimum Funding Requirement
Audit Risk Alert -- AICPA Issues Audit Risk Alert on
Not-for-Profit Entities
IASB Update -- Global Financial Crisis and Other
Matters Discussed
IFRIC Update -- IFRIC Agenda and Other Matters
Discussed
Auditing and Internal
Controls Headlines
Internal Controls -- 2009 Edition of Auditor's Risk
Management Guide Published
Engagement Quality Review -- PCAOB Proposed Auditing Standard
Discussed
Governmental Audits -- OMB Circular A-133 Compliance
Supplement Published
Audit Risk Alert -- AICPA Issues Audit Risk Alert on
Not-for-Profit Entities
Government Headlines
Governmental Audits -- OMB Circular A-133 Compliance
Supplement Published
Financial Statements -- GASB Statement 55 and 56 Discussed
GASB Report Issued -- Recently Issued GASB Standards and
Other Matters Discussed
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ACCOUNTING AND SEC HEADLINES:
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Subsequent Events -- FASB
Issues Guidance on Accounting and Disclosure of Subsequent Events
For detail, please contact info@zy-cpa.com
The FASB has issued FASB
Statement No. 165, Subsequent Events. Statement 165 establishes general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. Specifically, Statement 165 provides:
-The period after the balance
sheet date during which management of a reporting entity should evaluate events
or transactions that may occur for potential recognition or disclosure in the
financial statements;
-The circumstances under
which an entity should recognize events or transactions occurring after the
balance sheet date in its financial statements; and
-The disclosures that an
entity should make about events or transactions that occurred after the balance
sheet date.
Statement 165 is effective
for interim or annual financial periods ending after June 15, 2009, and shall
be applied prospectively.
Mergers and Acquisitions
-- FASB Issues Guidance for Not-for-Profit Entities
For detail, please contact info@zy-cpa.com
The FASB issued FASB
Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions.
Statement 164 is intended to improve the relevance, representational
faithfulness, and comparability of the information that a not-for-profit entity
provides in its financial reports about a combination with one or more other
not-for-profit entities, businesses, or nonprofit activities. To accomplish
that, Statement 164 establishes principles and requirements for how a
not-for-profit entity:
-Determines whether a
combination is a merger or an acquisition;
-Applies the carryover method
in accounting for a merger;
-Applies the acquisition
method in accounting for an acquisition, including determining which of the
combining entities is the acquirer; and
-Determines what information
to disclose to enable users of financial statements to evaluate the nature and
financial effects of a merger or an acquisition.
Statement 164 is also
intended to improve the information a not-for-profit entity provides about
goodwill and other intangible assets after an acquisition by amending FASB
Statement No. 142, Goodwill and Other Intangible Assets, to make it
fully applicable to not-for-profit entities.
Statement 164 is effective
for mergers occurring on or after December 15, 2009, and acquisitions for which
the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after December 15, 2009.
Early application is prohibited.
Revenue Recognition --
FASB and IASB Discuss Joint Revenue Recognition Project
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB and IASB (the
Boards) held a joint meeting on May 21, 2009, and discussed their joint project
on revenue recognition. The Boards discussed how an entity would measure its
net contract position and recognize revenue when the customer promises an uncertain
(variable) amount of consideration. The Boards tentatively agreed that revenue
recognition should be constrained only if the consideration amount cannot be
reliably estimated. The Boards directed their staff to develop proposed
application guidance that an entity would use to determine whether an estimate
is reliable. The Boards also asked their staff to develop potential disclosures
that an entity might provide about contracts with uncertain consideration and
the estimates reported in the financial statements.
Fair Value Disclosures --
FASB Discusses Improving Disclosures About Fair Value
Measurements
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on May 27,
2009, and discussed improving disclosures about fair value measurements.
Specifically, the FASB discussed a proposal that would require additional
information about fair value measurements used in financial statements and
reached the following tentative decisions:
-FASB Statement No. 157, Fair
Value Measurements, currently requires separate disclosures for each major
category of assets and liabilities, which is often interpreted in current
practice to be equivalent to a line item in the statement of financial
position. The FASB decided that the level of disaggregation
generally should be greater than the line items for assets and liabilities in
the statement of financial position. Additional guidance on disaggregation
will be discussed at a future meeting.
-Paragraph 32(e) of Statement
157 requires a discussion of the valuation techniques used to measure fair
value. The FASB decided to clarify that this discussion should include
descriptive disclosures about significant inputs for both Level 2 and Level 3
estimates.
-For Level 3 estimates,
entities should disclose any significant effect of reasonably possible
alternative inputs and how the effect was calculated.
-Entities should disclose any
significant transfers between Levels 1, 2, and 3 during the reporting period
and the reasons the transfers were made.
The FASB indicated that its
goal is to issue a final standard that would be effective for annual and
interim periods ending after December 15, 2009.
Fair Value Measurement --
IASB Issues Proposal
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment an Exposure Draft (ED), Fair Value Measurement. This ED
would replace existing fair value measurement guidance contained in individual IFRSs with a single, unified definition of fair value, as
well as further authoritative guidance on the application of fair value
measurement in inactive markets. This ED deals with how fair value should be
measured when it is already required by existing standards and does not extend
its use in any way.
This ED defines fair value as
the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date (an exit price). Under this ED, in the absence of an actual
transaction at the measurement date, a fair value measurement assumes a
hypothetical transaction in the most advantageous market for the asset or
liability.
Comments on this proposal are
due September 28, 2009.
Pension Plans -- IASB
Issues Proposal on Prepayments of a Minimum Funding Requirement
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment an ED, Prepayments of a Minimum Funding Requirement. This
ED would amend IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction, to correct an
unintended consequence that in some circumstances does not permit some entities
to recognize as an asset some prepayments for minimum funding contributions.
IFRIC 14 states that the surplus in the plan created by the prepayment is not
regarded as available as an economic benefit if the future minimum funding
contribution required in respect of future service exceeds the future IAS 19
service cost. Therefore, in such cases the prepayment is recognized as an
expense and not an asset. The IASB believes such prepayments represent an
asset, not an expense and therefore have issued this ED.
Comments on this proposal are
due July 27, 2009.
Audit Risk Alert -- AICPA
Issues Audit Risk Alert on Not-for-Profit Entities
For detail, please contact info@zy-cpa.com
The AICPA has issued an Audit
Risk Alert, Not-for-Profit Entities Industry Developments - 2009. This
Audit Risk Alert is intended to provide auditors of financial statements of
not-for-profit entities with an overview of recent economic, industry,
technical, regulatory, and professional developments that may affect the audits
and other engagements they perform. This Audit Risk Alert also include a section discussing current and future rulemaking
or other activities that may affect not-for-profit entities in the near future.
IASB Update-- Global
Financial Crisis and Other Matters Discussed
For detail, please contact info@zy-cpa.com
As reported in its "IASB
Update" publication, the IASB met on May 18-21, 2009, and discussed the
following items:
-Global financial crisis;
-Conceptual framework;
-Financial instruments with
characteristics of equity;
-First-time adoption of IFRSs;
-Insurance contracts;
-Joint ventures;
-Leases;
-Post-employment benefits;
-Rate-regulated activities;
-Revenue recognition; and
-Annual improvements.
IFRIC Update-- IFRIC Agenda
and Other Matters Discussed
For detail, please contact info@zy-cpa.com
As reported in the IASB's "IFRIC Update" publication, the
International Financial Reporting Interpretations Committee (IFRIC) met on May
7, 2009, and discussed the following items:
-Agenda decisions;
-Tentative agenda decisions;
and
-Work in progress
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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Internal Controls -- 2009
Edition of Auditor's Risk Management Guide Published
For detail, please contact info@zy-cpa.com
We have published the 2009
edition of Auditor's Risk Management Guide: Integrating Auditing and ERM.
This edition provides comprehensive, how-to guidance on performing a risk
management-based audit and assessing risk in a Sarbanes-Oxley world. Among
other changes, this edition contains the following:
-Discussion of the
interrelationships between governance, risk, and compliance, including the
expanded role of compliance;
-A new chapter on
entity-level controls;
-A new practice aid,
“Entity-Level Controls Assessment,” which is designed to assist companies in
their evaluation of entity-level controls;
-Discussions of financial
statements and risks as they relate to the AICPA Statement on Auditing
Standards No. 107, Audit Risk and Materiality in Conducting an Audit;
-Information on the guidance
for small companies as outlined in Impact of COSO's
Internal Control over Financial Reporting - Guidance for Smaller Public
Companies; and
-A section on determining
materiality for financial statements taken as a whole that provides guidance on
establishing materiality levels at the financial statement level.
See our Literature Update for
complete details.
Engagement Quality Review
-- PCAOB Proposed Auditing Standard Discussed
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that provides discussion and analysis of PCAOB proposed Auditing
Standard, Engagement Quality Review. This
proposed standard would require an engagement quality review for audits and
interim reviews and supersede the PCAOB’s interim
quality control standard on concurring partner review requirements. Among other
matters, the proposed standard requires the engagement quality reviewer to: (a)
evaluate the significant judgments made by the engagement team and the
conclusions reached in forming the overall conclusion on the engagement and in
preparing the engagement report; (b) evaluate whether the engagement
documentation reviewed indicates that the engagement team responded appropriately
to significant risks, and supports the conclusions reached by the engagement
team; and (c) provide concurring approval of issuance only if, after
performing the review with due professional care, the reviewer is not aware of
a “significant engagement deficiency,” as defined.
Governmental Audits -- OMB
Circular A-133 Compliance Supplement Published
For detail, please contact info@zy-cpa.com
We have published the March
2009 Office of Management and Budget (OMB) Compliance Supplement to OMB
Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations. This Supplement serves to identify existing important compliance
requirements that the federal government expects to be considered as part of an
audit under OMB Circular A-133. This Supplement also provides guidance to
assist auditors in determining compliance requirements relevant to the audit,
audit objectives, and suggested audit procedures for programs not included
herein. For single audits, this Supplement replaces agency audit guides and
other audit requirement documents for individual federal programs.
This Supplement is effective
for audits of fiscal years beginning after June 30, 2008, and supersedes the
OMB Circular A-133 Compliance Supplement dated March 2008.
Audit Risk Alert -- AICPA
Issues Audit Risk Alert on Not-for-Profit Entities
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, the AICPA has issued an Audit Risk Alert, Not-for-Profit
Entities Industry Developments - 2009. This Audit Risk Alert is intended to
provide auditors of financial statements of not-for-profit entities with an
overview of recent economic, industry, technical, regulatory, and professional
developments that may affect the audits and other engagements they perform.
This Audit Risk Alert also include a section
discussing current and future rulemaking or other activities that may affect
not-for-profit entities in the near future.
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:
======================
Governmental Audits -- OMB
Circular A-133 Compliance Supplement Published
For detail, please contact info@zy-cpa.com
As discussed above in our
Auditing and Internal Controls Summaries, we have published the March 2009
Office of Management and Budget (OMB) Compliance Supplement to OMB Circular
A-133, Audits of States, Local Governments, and Non-Profit Organizations.
This Supplement serves to identify existing important compliance requirements
that the federal government expects to be considered as part of an audit under
OMB Circular A-133. This Supplement also provides guidance to assist auditors
in determining compliance requirements relevant to the audit, audit objectives,
and suggested audit procedures for programs not included herein. For single
audits, this Supplement replaces agency audit guides and other audit
requirement documents for individual federal programs.
This Supplement is effective
for audits of fiscal years beginning after June 30, 2008, and supersedes the
OMB Circular A-133 Compliance Supplement dated March 2008.
Financial Statements --
GASB Statement 55 and 56 Discussed
For detail, please contact info@zy-cpa.com
We have added a Governmental
GAAP Update Service that discusses the GASB's
issuance of the following two pronouncements:
-GASB Statement No. 55, The
Hierarchy of Generally Accepted Accounting Principles for State and Local
Governments; and
-GASB Statement No. 56, Codification
of Accounting and Financial Reporting Guidance Contained in the AICPA
Statements on Auditing Standards.
GASB 55 incorporates the
hierarchy of generally accepted accounting principles for state and local
governments into the GASB's authoritative literature.
GASB 56 incorporates accounting and financial reporting guidance previously
only contained in the AICPA auditing literature into the GASB's
accounting and financial reporting literature for state and local governments.
GASB 56 addresses three issues from the AICPA's
literature: (1) related party transactions; (2) going concern considerations;
and (3) subsequent events.
GASB 55 and GASB 56 were
effective upon issuance.
GASB Report Issued --
Recently Issued GASB Standards and Other Matters Discussed
For detail, please contact info@zy-cpa.com
The April 2009 edition of the
"GASB Report" has been issued and includes the following discussion
items:
-GASB Calendar;
-The issuance of GASB 55 and
GASB 56;
-Summary of recent GASB
meetings;
-GASB posts video podcast to website; and
-GASB performance measures:
technical inquiry activities.
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