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Accounting Research Manager(TM)
Weekly Summary of Developments
August 10-14, 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

Financial Instruments -- FASB Discusses Improvements to Recognition and Measurement
EITF Materials -- FASB Issues Materials for September 9-10, 2009 EITF Meeting

Auditing and Internal Controls Headlines

Audits of Financial Statements -- Proposed Statement on Initial Audit Engagements, Including Reaudits Discussed

Government Headlines

GASB Proposals -- Recently Issued GASB Proposals Drafts Discussed

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ACCOUNTING AND SEC HEADLINES:
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Financial Instruments -- FASB Discusses Improvements to Recognition and Measurement
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As reported in its "Summary of Board Decisions" publication, the FASB met on August 13, 2009, and discussed improvements to the recognition and measurement of financial instruments. Specifically, the FASB discussed how an entity should present financial instruments in the basic financial statements. The FASB decided that financial instruments whose fair value changes are recognized in net income should be separately presented on the balance sheet from those financial instruments whose fair value changes are recognized in other comprehensive income. In addition, the FASB made the following decisions for financial instruments whose fair value changes are recognized in net income or other comprehensive income, and for an entity's own debt for which the amortized cost option is elected:

For financial instruments whose fair value changes are recognized in net income:

-Entities would be required to present on the balance sheet the fair value amount. Entities would not be prohibited from presenting on the balance sheet or disclosing in the notes the amortized cost amount and the fair value adjustment amount related to the instruments in addition to the fair value amount.
-Entities would be required to present the amortized cost amount for own debt on the balance sheet.
-Entities would be required, at a minimum, to present separately on the income statement an aggregate amount for unrealized and realized gains or losses. -Entities would not be prohibited from reporting interest accruals or credit losses as separate line items on the income statement.

For financial instruments whose fair value changes are recognized in other comprehensive income:

-Entities would be required to present the cumulative credit losses as a separate line item on the face of the balance sheet for financial assets. The cumulative credit losses amount would be presented separately from the remainder of the fair value adjustment to reconcile the amortized cost amount to the fair value of the financial instrument.
-Entities would not be required to report foreign currency transaction gains or losses on a foreign-currency-denominated financial instrument as a separate line item on the income statement. Those changes in fair value would be required to be reported in other comprehensive income with other changes in fair value when the financial instrument is reported in the fair value through other comprehensive income category.
-Entities would not be required to provide additional information on further disaggregation of changes in fair value beyond: (a) credit impairment; (b) interest accruals; and (c) the remainder (other residual changes in fair value).

For an entity’s own debt for which the amortized cost option is elected, entities would be required to present separately on the income statement the interest accruals and any realized gains or losses.

EITF Materials -- FASB Issues Materials for September 9-10, 2009 EITF Meeting
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The FASB has issued the following materials for the September 9-10, 2009 EITF Meeting:

-EITF Issue No. 08-1, "Revenue Arrangements with Multiple Deliverables" (comment letters); and
-EITF Issue No. 09-3, "Applicability of SOP 97-2 to Certain Arrangements That Include Software Elements" (comment letters).

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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Audits of Financial Statements -- Proposed Statement on Initial Audit Engagements, Including Reaudits Discussed
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We have added a GAAS Update Service that discusses the AICPA's Proposed Statement on Auditing Standards (SAS), Initial Audit Engagements, Including Reaudits - Opening Balances. As proposed, this SAS would supersede SAS No. 84, Communications Between Predecessor and Successor Auditors. Among other matters, this Update discusses the proposed requirement for the auditor to obtain sufficient appropriate audit evidence about whether:

-There are misstatements in opening balances that materially affect the financial statements for the current period;
-Accounting policies reflected in the opening balances have been consistently applied in the current period’s financial statements; and
-Changes in accounting policies, if any, have been adequately accounted for, presented, and disclosed.

The guidance in this proposal would be effective for audits of financial statements for periods beginning on or after December 15, 2010.

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GOVERNMENT HEADLINES:
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GASB Proposals -- Recently Issued GASB Proposals Drafts Discussed
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We have published a Governmental GAAP Update Service that discusses the GASB's issuance of proposals on the following topics:

-Other postemployment benefits (OPEB) measurements by agent employers and agent multiple-employer plans;
-Accounting and financial reporting for Chapter 9 bankruptcies;
-Accounting and financial reporting for service concession arrangements; and
-Financial instruments omnibus.

This Update provides a summary and analysis of each GASB proposal.

Comments on each proposal are due: (a) August 28, 2009, for the proposals on OPEB measurements by agent employers and accounting and financial reporting for Chapter 9 bankruptcies; (b) September 30, 2009, for the proposal on service concession arrangements; and (c) October 30, 2009, for the financial instruments omnibus.

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For detail, please contact info@zy-cpa.com