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Accounting Research Manager(TM)
Weekly Summary of Developments
July 13-17, 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:

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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

Disclosure Checklists -- Checklists Updated through June 30, 2009
Financial Instruments -- FASB Decides on Model to Improve Financial Reporting for Financial Instruments
Proxy Rules -- SEC Publishes Proposed Proxy Disclosure and Solicitation Enhancements
EITF Abstracts -- EITF Draft Abstracts on Revenue Recognition and Arrangements That Include Software Elements Published
Inflation Rates -- Interpretation Added, Inflation Rates for Judging Whether an Economy Is Highly Inflationary - June 2009
Financial Instruments -- IASB Issues Proposal on Classification and Measurement of Financial Instruments
International Financial Reporting -- IASB Issues Agenda for July 20-24, 2009 Meeting
IFRIC Update -- Debt to Equity Swaps and Other Matters Discussed


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ACCOUNTING AND SEC HEADLINES:
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Disclosure Checklists -- Checklists Updated through June 30, 2009
For detail, please contact info@zy-cpa.com

As discussed in our Literature Update, the General U.S. GAAP Financial Statement Disclosures Checklist and General U.S. GAAP Interim Financial Statement Disclosures Checklist have been updated for the disclosure requirements in effect as of June 30, 2009. We have updated references, where appropriate, to reflect the FASB Accounting Standards Codification^TM (Codification), that was released by the FASB on July 1, 2009. These checklists now include references to both the Codification, as well as references to the standards in effect prior to the Codification (e.g., FASB Statements, EITF Consensuses, etc.).

See our Literature Update for complete details.

Financial Instruments -- FASB Decides on Model to Improve Financial Reporting for Financial Instruments
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As reported in its "Summary of Board Decisions" publication, the FASB met on July 15, 2009, and decided on a model to improve financial reporting for financial instruments. Specifically, the FASB reached the following decisions:

-All financial instruments will be presented on the balance sheet at fair value with changes in value recognized in net income or other comprehensive income with an optional exception for own debt in certain circumstances, which will be measured at amortized cost. For those financial instruments whose change in value is recognized in other comprehensive income, amortized cost will be displayed on the balance sheet in addition to a fair value adjustment to arrive at fair value.
-Changes in an instrument’s value may be recognized in other comprehensive income on the basis of qualifying criteria related to an entity’s management intent/business model and the cash flow variability of the instrument. The FASB is expected to provide additional guidance on how to apply those qualifying criteria.
-Changes in value for derivatives, equity securities, and hybrid instruments containing embedded derivatives requiring bifurcation under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, will be recognized in net income.
-For all financial instruments, interest and dividends will continue to be recognized in net income, along with credit impairments and realized gains and losses from sale and settlement.
-Classification of instruments will be determined at initial recognition of the instrument and will not be subsequently changed.
-One statement of financial performance with subtotals for net income and other comprehensive income will be required. Earnings per share for net income only will continue to be required.

Proxy Rules -- SEC Publishes Proposed Proxy Disclosure and Solicitation Enhancements
For detail, please contact info@zy-cpa.com

The SEC has issued for public comment a proposed rule, Proxy Disclosure and Solicitation Enhancements. This proposal includes amendments to SEC rules aimed at enhancing the compensation and corporate governance disclosures registrants are required to make about:

-Overall compensation policies and impact on risk taking;
-Stock and option awards of executives and directors;
-Director and nominee qualifications and legal proceedings;
-Company leadership structure;
-Board of Director roles in the risk management process; and
-Potential conflicts of interest of compensation consultants that advise companies.

As proposed, these amendments to SEC disclosure rules would be applicable to proxy and information statements, annual reports and registration statements under the Securities Exchange Act of 1934, and registration statements under the Securities Act of 1933 as well as the Investment Company Act of 1940. This proposal also includes amendments to transfer from SEC Forms 10-Q and 10-K to Form 8-K the requirement to disclose shareholder voting results. In addition, this proposal includes amendments to SEC proxy rules to clarify the manner in which they operate and address issues that have arisen in the proxy solicitation process.

The SEC is proposing that these amendments be effective for the 2010 proxy season.

Comments on this proposal are due September 15, 2009.

EITF Abstracts -- EITF Draft Abstracts on Revenue Recognition and Arrangements That Include Software Elements Published
For detail, please contact info@zy-cpa.com

The FASB has issued, in a single document, for public comment the following two Draft Abstracts:

-EITF Issue No. 08-1, "Revenue Arrangements with Multiple Deliverables"; and
-EITF Issue No. 09-3, "Applicability of AICPA Statement of Position 97-2 to Certain Arrangements That Include Software Elements."

These proposals reflect the consensuses-for-exposure reached by the EITF at its June 18, 2009 meeting and address: (a) how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting; (b) how the arrangement consideration should be allocated among the separate units of accounting; and (c) changes to the accounting for multiple element arrangements under AICPA Statement of Position 97-2, Software Revenue Recognition, that contain software-enabled products.

Comments on these proposals are due August 14, 2009.

Inflation Rates -- Interpretation Added, Inflation Rates for Judging Whether an Economy Is Highly Inflationary - June 2009
For detail, please contact info@zy-cpa.com

Our Interpretation, Inflation Rates for Judging Whether an Economy Is Highly Inflationary - June 2009, has been issued and reflects the latest available inflation rate information. Since our last update in March 2009, Ethiopia has been reclassified from the “watch list” of countries that may have highly inflationary economies to the list of countries that have highly inflationary economies.

See our Literature Update for complete details.

Financial Instruments -- IASB Issues Proposal on Classification and Measurement of Financial Instruments
For detail, please contact info@zy-cpa.com

The IASB has issued for public comment an exposure draft, Financial Instruments - Classification and Measurement. This proposal is intended to improve the classification and measurement of financial instruments. Among other things, this proposal includes the following guidance:

-A financial asset or financial liability would be measured at amortized cost if two conditions are met: (1) the instrument has basic loan features; and (2) the instrument is managed on a contractual yield basis;
-A financial asset or financial liability that does not meet both of the above conditions would be measured at fair value;
-A hybrid contract with a host that is within the scope of this proposal is classified in its entirety in accordance with the proposed classification approach;
-An entity may elect at initial recognition to measure any financial asset or financial liability within the scope of this proposal at fair value through profit or loss if such designation eliminates or significantly reduces a measurement or recognition inconsistency; and
-Prohibit reclassification of financial assets and financial liabilities between the amortized cost and fair value categories.

Comments on this proposal are due September 14, 2009.

International Financial Reporting -- IASB Issues Agenda for July 20-24, 2009 Meeting
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The IASB is scheduled to discuss the following agenda items at its July 20-24, 2009 meeting:

-Financial instruments;
-Liabilities, amendments to IAS 37, Provisions, Contingent Liabilities and Contingent Assets;
-Conceptual framework;
-Education session by Bank of Spain representatives on dynamic provisioning in Spain;
-Revenue recognition;
-Joint ventures;
-Financial instruments with characteristics of equity;
-Insurance contracts;
-Financial statement presentation;
-Leases;
-Rate-regulated activities; and
-Annual improvements project.

Certain of the above topics (e.g., revenue recognition and leases) are scheduled to be discussed jointly with the FASB.

IFRIC Update -- Debt to Equity Swaps and Other Matters Discussed
For detail, please contact info@zy-cpa.com

As reported in the IASB's "IFRIC Report" publication, the International Financial Reporting Interpretations Committee (IFRIC) met on July 9, 2009, and discussed the following items:

-Debt to equity swap in a restructuring;
-Classification of vesting conditions;
-Rights issues denominated in a foreign currency;
-Agenda decisions;
-Tentative agenda decisions; and
-Work in progress.

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