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Accounting Research
Manager(TM)
Weekly Summary of
Developments
July 20-24, 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
Income Taxes -- Interpretations Updated
Insurance Contracts -- FASB Discusses the Accounting for
Insurance Contracts
Rate-Regulated Activities -- IASB Issues Proposal
Audit Risk Alert -- AICPA Publishes Audit Risk Alert on
Independence and Ethics
Auditing and Internal
Controls Headlines
Computer-Processed Data -- GAO Releases Guide
Audits of Financial
Statements -- Proposed
Statement on Consideration of Laws and Regulations Discussed
Audit Risk Alert -- AICPA Publishes Audit Risk Alert on
Independence and Ethics
Government Headlines
GASB Report Issued -- GASB Proposals and Other Matters Discussed
Computer-Processed Data -- GAO Releases Guide
Encumbrances -- Accounting and Financial Reporting for
Encumbrances Discussed
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ACCOUNTING AND SEC HEADLINES:
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Income Taxes --
Interpretations Updated
For detail, please contact info@zy-cpa.com
We have updated our
publication, Accounting for Income Taxes - Interpretations of Topic 740,
(formerly known as Accounting for Income Taxes - Interpretations of FASB
Statement 109), we have added the following interpretations:
-740-10-25-46.A,
“Distinguishing Investment Tax Credits From Government Grants”;
-740-10-30-18.F, “Accounting
for Deferred Tax Assets Related to Available-for-Sale Debt Securities”; and
-805-740-45-4.A, “Accounting
for the Statute of Limitations Related to an Uncertain Tax Position Expiring
During the Measurement Period.”
See our Literature Update for
complete details.
Insurance Contracts --
FASB Discusses the Accounting for Insurance Contracts
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on July 21,
2009, and discussed the accounting for insurance contracts. Specifically, the
FASB discussed how an entity would measure an insurance liability and decided
that the objective of the liability measurement is to report a value based on
the insurer’s fulfillment of its contractual obligations to its policyholders
and that the fulfillment value should include only a composite margin with no
explicit risk margin. The FASB decided that the expected cash flows in the
measurement of an insurance liability should be discounted to reflect the time
value of money and also agreed that the discount rate used should be updated
each reporting period. The FASB is expected to discuss the discount rate that
should be used at a future meeting.
Rate-Regulated Activities
-- IASB Issues Proposal
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment an exposure draft, Rate-regulated Activities. This
proposal includes guidance on how assets and liabilities resulting from
rate-regulated activities should be recognized and measured under IFRSs. Among other things, this proposal would:
-Define regulatory assets and
regulatory liabilities;
-Set out criteria for their
recognition;
-Specify how they should be
measured; and
-Require disclosures about
their financial effects.
Comments on this proposal are
due November 20, 2009.
Audit Risk Alert -- AICPA
Publishes Audit Risk Alert on
For detail, please contact info@zy-cpa.com
The AICPA has issued an Audit
Risk Alert,
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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AUDITING AND INTERNAL
CONTROLS HEADLINES:
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Computer-Processed Data --
GAO Releases Guide
For detail, please contact info@zy-cpa.com
The U.S. Government
Accountability Office (GAO) has published a guide, Assessing
the Reliability of Computer-Processed Data. This guide may assist auditing
staff when assessing the reliability of computer based data in government
audits. The guidance, which supersedes the 2002 edition, provides a flexible,
risk-based framework for data reliability assessments that can be geared to the
specific circumstances of each engagement. The framework is built on: (a)
making use of all existing information about the data; (b) performing at
least a minimal level of data testing; (c) doing only the amount of work
necessary to determine whether the data is reliable enough for GAO’s purposes;
(d) maximizing professional judgment; and (e) bringing the
appropriate people, including management, to the table at key decision points.
The guide does not carry the authoritative status of a standard; rather it is
intended to provide helpful guidance in designing and implementing audits.
Audits of Financial
Statements -- Proposed Statement on Consideration of Laws and Regulations
Discussed
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that discusses the AICPA's Proposed Statement
on Auditing Standards (SAS), Consideration of Laws and Regulations in an
Audit of Financial Statements. This proposed SAS would supersede SAS No.
54, Illegal Acts by Clients. This Update covers the following topics
related to this proposed SAS:
-Basic requirements of the
proposed SAS;
-Audit procedures when
noncompliance is identified or suspected;
-Reporting noncompliance to
those charged with governance and outside parties;
-Effect on the auditor's
report; and
-Documentation.
As proposed, this SAS would
be effective for audits of financial statements for periods beginning on or
after December 15, 2010.
Audit Risk Alert -- AICPA
Publishes Audit Risk Alert on
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,
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:
======================
GASB Report Issued -- GASB
Proposals and Other Matters Discussed
For detail, please contact info@zy-cpa.com
The June 2009 edition of the
"GASB Report" has been issued and includes the following discussion items:
-GASB proposals on: (a)
Chapter 9 of the United States Bankruptcy Code; (b) other postemployment benefit (OPEB) implementation issues; (c)
financial instruments omnibus; (d) service concession arrangements; and
(e) service efforts and accomplishments reporting;
-GASB calendar;
-GASB's
25th anniversary;
-Summary of GASB meeting held
on May 12, 2009; and
-The launch of the FASB
Accounting Standards CodificationTM.
Computer-Processed Data --
GAO Releases Guide
For detail, please contact info@zy-cpa.com
As discussed above in our
Auditing and Internal Controls Summaries, the U.S. Government Accountability
Office (GAO) has published a guide, Assessing
the Reliability of Computer-Processed Data. This guide may assist auditing
staff when assessing the reliability of computer based data in government
audits. The guidance, which supersedes the 2002 edition, provides a flexible,
risk-based framework for data reliability assessments that can be geared to the
specific circumstances of each engagement. The framework is built on: (a)
making use of all existing information about the data; (b) performing at
least a minimal level of data testing; (c) doing only the amount of work
necessary to determine whether the data is reliable enough for GAO’s purposes;
(d) maximizing professional judgment; and (e) bringing the
appropriate people, including management, to the table at key decision points.
The guide does not carry the authoritative status of a standard; rather it is
intended to provide helpful guidance in designing and implementing audits.
Encumbrances -- Accounting
and Financial Reporting for Encumbrances Discussed
For detail, please contact info@zy-cpa.com
We have published a
Governmental GAAP Update Service that discusses the accounting and financial
reporting for encumbrances. Encumbrances represent commitments related to
contracts not yet performed and orders not yet filled (e.g., executory contracts or open purchase orders), and they are
used to control expenditure commitments for the year and to enhance cash
management. This Update discusses the changes to year-end financial reporting
treatment for encumbrances as a result of the issuance of GASB Statement No.
54, Fund Balance Reporting and Governmental Fund Type Definitions, which
is effective for periods beginning after June 15, 2010, unless earlier
implemented. Specific topics covered in this Update are:
-Budgetary control
accounting;
-Accounting for encumbrance
transactions;
-Year-end accounting and
reporting treatment;
-Lapsing appropriations;
-Nonlapsing
appropriations; and
-GASB 54 effect on fund
balance reporting for encumbrances.
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