===================================================
Accounting Research
Manager(TM)
Weekly Summary of
Developments
October 12-16, 2009
===================================================
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
Section 404 -- SEC Issues Final Rule on New SOX 404
Compliance Date for Small Public Companies
FASB Codification -- FASB Publishes Amendments to
Codification
Derivatives and Hedging -- FASB Issues Proposed Accounting
Standards Update
Inflation Rates -- Interpretation Issued, Inflation Rates
for Judging Whether an Economy Is Highly Inflationary - September 2009
FASB Meeting -- Board Discusses Financial Instruments,
Financial Statement Presentation, and Credit Quality Issues
International Financial
Reporting -- IASB Issues
Agenda for October 19-23, 2009 Meeting
Auditing and Internal
Controls Headlines
TARP -- GAO Publishes New TARP Report
Government Headlines
TARP -- GAO Publishes New TARP Report
=============================
ACCOUNTING AND SEC HEADLINES:
=============================
Section 404 -- SEC Issues
Final Rule on New SOX 404 Compliance Date for Small Public Companies
For detail, please contact info@zy-cpa.com
The SEC has issued a final
rule, Internal Control over Financial Reporting in
Exchange Act Periodic Reports of Non-Accelerated Filers. This final rule
requires that all non-accelerated filers begin complying with the final portion
of Section 404 of the Sarbanes-Oxley Act of 2002 in nine months, beginning with
their annual reports for fiscal years ending on or after June 15, 2010, instead
of for fiscal years ending on or after December 15, 2009. The scope of the
final rule includes all “non-accelerated filers,” which is not a term defined
in SEC rules, but used to refer to a Securities Exchange Act of 1934 reporting
company that does not meet the definitions of either an “accelerated filer” or
“large accelerated filer” provided in SEC Rule 12b-2.
During 2008, the SEC granted
an extension to all non-accelerated filers for compliance with Section 404(b)
until fiscal years ending on or after December 15, 2009. Section 404(b)
requires a registrant to provide an attestation report on management’s
assessment of internal controls over financial reporting by the registrant’s
external auditor. Under the final rule, all non-accelerated filers will be
required to provide their auditor’s attestation on management’s assessment of
internal controls over financial reporting in their annual reports filed for
fiscal years ending on or after June 15, 2010. Prior to that time, a
non-accelerated filer continues to be required to state in its management report
on ICFR that the company’s annual report does not include an auditor
attestation report.
Prior to the public issuance
of the SEC’s final rule, Accounting Research Manager published a Hot
Topic, SEC Announces New SOX 404 Compliance Date for Small Public Companies:
For detail, please contact info@zy-cpa.com
The SEC's announcement
discussed in this Hot Topic is consistent with the SEC’s subsequently issued
final rule discussed above. Readers interested in the final rule may find this
previously issued Hot Topic useful. However, readers should consult the full
text of the final rule for complete details.
FASB Codification -- FASB
Publishes Amendments to Codification
For detail, please contact info@zy-cpa.com
The FASB has published FASB
Accounting Standards Update 2009-15, Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. FASB
Accounting Standards Update 2009-15 includes amendments to Topic 470, Debt,
(Subtopic 470-20), and Topic 260, Earnings per Share, (Subtopic 260-10),
to provide guidance on share-lending arrangements entered into on an entity's
own shares in contemplation of a convertible debt offering or other financing.
FASB Accounting Standards
Update 2009-15 is effective for fiscal years beginning on or after December 15,
2009, and interim periods within those fiscal years for arrangements
outstanding as of the beginning of those years. Retrospective application is
required for such arrangements. FASB Accounting Standards Update 2009-15 is
effective for arrangements entered into on (not outstanding) or after the
beginning of the first reporting period that begins on or after June 15, 2009.
Certain transition disclosures are also required. Early application is not
permitted.
Derivatives and Hedging --
FASB Issues Proposed Accounting Standards Update
For detail, please contact info@zy-cpa.com
The FASB has issued for
public comment a Proposed Accounting Standards Update, Derivatives and
Hedging (Topic 815) - Scope Exception Related to Embedded Credit Derivatives.
This proposal would amend Subtopic 815-15 to clarify the scope exception under
paragraph 815-15-15-9 for embedded credit derivative features related to the
transfer of credit risk in the form of subordination of one financial
instrument to another. Specifically, this proposal provides:
-Guidance on determining
which embedded credit derivative features, including those in collateralized
debt obligations, are considered to be embedded derivatives not to be analyzed
for potential bifurcation and separate accounting;
-That an embedded credit
derivative feature related to the transfer of credit risk that is only in the
form of subordination of one financial instrument to another is an embedded
derivative feature not subject to bifurcation; and
-That other embedded credit
derivative features not created by the subordination feature, including those
in some collateralized debt obligations, are considered embedded derivatives
subject to bifurcation provided that the overall contract is not a derivative
in its entirety.
All entities that enter into
contracts containing an embedded credit derivative feature related to the
transfer of credit risk that is not only in the form of subordination of one
financial instrument to another would be affected by the amendments in this
proposal because the amendments would clarify that the embedded credit
derivative scope exception in paragraph 815-15-15-9 does not apply to such
contracts.
As proposed, this guidance
would be effective for each reporting entity on the first day of its first
fiscal quarter beginning after December 15, 2009.
Comments on this proposal are
due November 12, 2009.
Inflation Rates --
Interpretation Issued, Inflation Rates for Judging Whether an Economy Is Highly
Inflationary - September 2009
For detail, please contact info@zy-cpa.com
Our interpretation, Inflation
Rates for Judging Whether an Economy Is Highly Inflationary - September 2009,
has been issued and reflects the latest available
inflation rate information. Our interpretation classifies countries into one of
three categories: (1) those having hyperinflation; (2) those not having
hyperinflation; and (3) those on our "watch list" that may have
hyperinflation.
We include a discussion of
See our Literature Update for
complete details.
FASB Meeting -- Board
Discusses Financial Instruments, Financial Statement Presentation, and Credit
Quality Issues
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on October 14,
2009, and discussed the following topics:
-Accounting for financial
instruments;
-Financial statement
presentation; and
-Disclosures about credit
quality and the allowance for credit losses.
The FASB discussed the
recognition and initial measurement of financial instruments and reached
decisions on:
-A recognition principle for
financial instruments;
-Measurement guidance for a
financial instrument at initial recognition; and
-Accounting for transaction
costs and fees arising from the purchase or sale of a financial instrument.
The FASB continued its deliberations
on proposals in the Discussion Paper dated October 16, 2008, Preliminary
Views on Financial Statement Presentation,making tentative decisions on:
-Identification in the
statement of comprehensive income of the category or section to which each item
relates;
-Application of existing
requirements for allocation and presentation of income taxes in the statement
of comprehensive income;
-Disclosure of income tax
allocated to each component of other comprehensive income; and
-Presentation of current and
deferred income tax assets and liabilities and related cash flows in the income
tax section of the statement of financial position and the statement of cash
flows.
The FASB also discussed a
summary of comments received on the Exposure Draft dated June 24, 2009, Disclosures
about the Credit Quality of Financing Receivables and the Allowance for Credit
Losses, and its plan for redeliberations. The
FASB decided to move forward with its plans to require enhanced disclosures
about credit quality and the allowance for credit losses independently of its
broader project on accounting for financial instruments.
International Financial
Reporting -- IASB Issues Agenda for October 19-23, 2009 Meeting
For detail, please contact info@zy-cpa.com
The IASB is scheduled to
discuss the following agenda items at its October 19-23, 2009 meeting:
-Financial instruments;
-Fair value measurement;
-Consolidation;
-Financial statement
presentation;
-Insurance contracts;
-Credit risk in liability
measurement;
-Liabilities: amendments to
IAS 37, Provisions, Contingent Liabilities and Contingent Assets;
-Postemployment
benefits: discount rate and IFRIC 14, Prepayments of a Minimum Funding
Requirement;
-Other comprehensive income;
and
-Derecognition.
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:
=======================================
TARP -- GAO Publishes New
TARP Report
For detail, please contact info@zy-cpa.com
The U.S. Government
Accountability Office (GAO) has released a new report, Troubled Asset Relief
Program: One Year Later, Actions Are Needed to Address Remaining Transparency
and Accountability Challenges. The report assesses the Troubled Asset
Relief Program’s (TARP) impact over the last year. Specifically, it discusses:
-The evolution of TARP’s strategy and the status of TARP programs as of
September 25, 2009;
-The Department of the
Treasury’s (Treasury) progress in creating an effective management structure,
including hiring for the Office of Financial Stability (OFS), overseeing
contractors, and establishing a comprehensive system of internal control; and
-Indicators of TARP’s performance that could help the Treasury decide
whether to extend the program. As stated in this report, the GAO reviewed
relevant documentation and met with officials from OFS, contractors and
financial regulators.
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:
======================
TARP -- GAO Publishes New
TARP Report
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 released a new report, Troubled Asset Relief Program: One
Year Later, Actions Are Needed to Address Remaining Transparency and
Accountability Challenges. The report assesses the Troubled Asset Relief
Program’s (TARP) impact over the last year. Specifically, it discusses:
-The evolution of TARP’s strategy and the status of TARP programs as of
September 25, 2009;
-The Department of the
Treasury’s (Treasury) progress in creating an effective management structure,
including hiring for the Office of Financial Stability (OFS), overseeing
contractors, and establishing a comprehensive system of internal control; and
-Indicators of TARP’s performance that could help the Treasury decide
whether to extend the program. As stated in this report, the GAO reviewed
relevant documentation and met with officials from OFS, contractors and
financial regulators.
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