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Accounting Research
Manager(TM)
Weekly Summary of
Developments
November 2-6, 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 of Topic 740 Updated
Oil and Gas Activities -- SEC Staff Publishes Accounting
Bulletin on Oil and Gas Accounting Rules
EITF Materials -- FASB Issues Additional Materials for
November 19, 2009 EITF Meeting
Engagement Quality Review -- SEC Publishes Proposed PCAOB Rules for
Comment
Financial Instruments -- FASB Discusses Financial Instruments
and Other Matters
Financial Instruments -- IASB Issues Proposal on Amortized Cost
Measurement and Impairment
Related Party Disclosures -- IASB Revises IAS 24
Financial Crisis -- FASB/IASB Discuss Financial Crisis and
Other Matters
International Financial
Reporting -- IASB Issues
Agenda for November 12-13, 2009 Standards Advisory Council Meeting
Auditing and Internal
Controls Headlines
Engagement Quality Review -- SEC Publishes Proposed PCAOB Rules for
Comment
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ACCOUNTING AND SEC HEADLINES:
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Income Taxes --
Interpretations of Topic 740 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), to include guidance on the following topics:
-Attribution of income taxes
to the entity or its owners;
-Common control merger of
taxable and nontaxable entities;
-Income statement
classification of direct costs of executing a tax strategy; and
-Changes to the acquiring
entity’s valuation allowance during the measurement period.
See our Literature Update for
complete details.
Oil and Gas Activities -- SEC
Staff Publishes Accounting Bulletin on Oil and Gas Accounting Rules
For detail, please contact info@zy-cpa.com
The Office of the Chief
Accountant of the SEC has published Staff Accounting Bulletin (SAB) No. 113.
This SAB revises or rescinds portions of the interpretive guidance included in
SAB Topic 12, Oil and Gas Producing Activities, and revises a technical
reference in SAB Topic 3, Senior Securities, in order to make the
interpretive guidance consistent with the SEC’s final rule, Modernization of
Oil and Gas Reporting, which was issued December 31, 2008. The principal
revisions included in SAB 113 include:
-Changing the price used to
determine quantities of oil and gas reserves;
-Eliminating the option to
use post-quarter-end prices to evaluate write-offs of excess capitalized costs
under the full cost method of accounting;
-Removing the exclusion of
unconventional methods used in extracting oil and gas from oil sands or shale
as an oil and gas producing activity; and
-Removing certain questions
and interpretive guidance which are no longer necessary.
The effective date of SAB 113
is November 4, 2009.
EITF Materials -- FASB
Issues Additional Materials for November 19, 2009 EITF Meeting
For detail, please contact info@zy-cpa.com
The FASB has issued the
following additional materials for the November 19, 2009 EITF meeting:
-Revised proposed agenda;
-EITF Issue No. 09-E,
"Accounting for Stock Dividends, Including Distributions to Shareholders
with Components of Stock and Cash" (supplement);
-EITF Issue No. 09-F, "Casino
Base Jackpot Liabilities" (issue summary);
-EITF Issue No. 09-G,
"Clarification of the Definition of Deferred Acquisition Costs of
Insurance Entities" (issue summary); and
-EITF Issue No. 09-I,
"Effect of a Loan Modification When the Loan Is Part of a Pool that is
Accounted for as a Single Asset" (issue summary).
Engagement Quality Review
-- SEC Publishes Proposed PCAOB Rules for Comment
For detail, please contact info@zy-cpa.com
The SEC has issued, Notice
of Filing of Proposed Rules on Auditing Standard No. 7, Engagement Quality
Review, and Conforming Amendment. This notice seeks comments from the
public on the previously adopted PCAOB Auditing Standard (AS) No. 7, Engagement
Quality Review, and a conforming amendment to PCAOB Interim Quality
Control Standards. AS 7, as included in this notice, is consistent with its
original adoption by the PCAOB on July 28, 2009. It provides a framework for
the engagement quality reviewer to objectively evaluate the significant
judgments made and related conclusions reached by the engagement team in
forming an overall conclusion about the engagement. According to the PCAOB,
this standard and conforming amendment focus the engagement quality reviewer’s
attention on the areas that are most likely to contain significant engagement
deficiencies and increase the likelihood of identifying and correcting those
deficiencies before the audit report is issued.
If approved by the SEC, AS 7
and the conforming amendment would be effective for engagement quality review
of audits and interim reviews for fiscal years beginning on or after December
15, 2009.
Comments on this proposal are
due November 27, 2009.
Financial Instruments --
FASB Discusses Financial Instruments and Other Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on November 4,
2009, and discussed the following topics: (a) accounting for financial
instruments; and (b) subsequent events implementation. The FASB
discussed how an entity would account for the difference, if any, between
transaction price and fair value at initial measurement for those financial
instruments in situations when it is clear that the transaction price differs
from fair value. The FASB asked its staff to develop a principle to help
identify when the transaction price would differ from fair value and, if so,
how to calculate the initial value of the financial instrument at that date.
The FASB also discussed implementation
issues relating to accounting and reporting for subsequent events under Topic
855, Subsequent Events, and made the following decisions:
-Clarified that all entities
would be required to disclose the date through which subsequent events have
been evaluated, in both originally issued and reissued financial statements,
unless they have a regulatory requirement to review subsequent events up
through the filing or furnishing of financial statements with the SEC.
-Clarified that entities that
are not subject to such regulatory requirement with respect to filing or
furnishing of financial statements with the SEC would be required to disclose
the date through which subsequent events have been evaluated in originally
issued financial statements as well as in a restatement of previously issued
financial statements; restatements include both correction of an error and
retrospective application of U.S. GAAP.
-Decided that entities that
file or furnish financial statements with the SEC should use an issued date in
evaluating subsequent events. An entity that does not file or furnish financial
statements with the SEC would be able to use an available-to-be issued date
unless the entity has a current expectation of widely distributing its
financial statements to shareholders and other financial statement users. If
the entity has that expectation, it would use an issued date.
-Directed the FASB staff to
proceed to a draft of an exposure draft of a proposed Accounting Standards
Update for vote by written ballot, with a 30-day comment period. The exposure
draft will propose that the Accounting Standards Update be effective
prospectively upon issuance of a final document.
The FASB chairman added the
following short-term projects to the FASB’s agenda to
address implementation issues relating to:
-Accounting and reporting for
subsequent events; and
-The impact of the
consolidations guidance in FASB Statement No. 167, Amendments to FASB
Interpretation 46(R), on the investment management industry.
Financial Instruments --
IASB Issues Proposal on Amortized Cost Measurement and Impairment
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment an exposure draft, Financial Instruments - Amortised Cost and Impairment. This proposal represents
the second part of a three-part project to replace IAS 39, Financial
Instruments: Recognition and Measurement, with a new standard, to be known
as IFRS 9, Financial Instruments. This proposal would apply to all
financial assets measured at amortized cost and change the model used to
account for impairments of financial instruments from the current impairment
model based on incurred losses to one based on expected losses. Under an
expected loss impairment model, an entity would be required to:
-Determine the expected
credit losses on a financial asset when that asset is first obtained;
-Recognize contractual
interest revenue, less the initial expected credit losses, over the life of the
financial instrument;
-Build up a provision over
the life of the financial instrument for expected credit losses;
-Reassess the expected credit
loss each period; and
-Recognize immediately the
effects of any changes in credit loss expectations.
Comments on this proposal are
due June 30, 2010.
Related Party Disclosures
-- IASB Revises IAS 24
For detail, please contact info@zy-cpa.com
The IASB has replaced IAS 24,
Related Party Disclosures, with a new version. The IASB believes the
revised standard simplifies the disclosure requirements for government-related
entities by focusing disclosures on significant transactions, and clarifies the
definition of a related party.
The revised standard is
effective for annual periods beginning on or after January 1, 2011. Early
adoption is permitted.
Financial Crisis --
FASB/IASB Discuss Financial Crisis and Other Matters
For detail, please contact info@zy-cpa.com
As reported in its "IASB
Update" publication, the FASB and IASB held a joint meeting on October
26-28, 2009, and discussed the following topics:
-Financial crisis;
-Discontinued operations;
-Financial instruments with
characteristics of equity;
-Financial statement
presentation;
-Income tax;
-Insurance contracts;
-Leases;
-Revenue recognition;
-Statement of comprehensive
income; and
-FASB/IASB technical plans.
The FASB and IASB reached a
number of tentative decisions regarding theses topics, which are detailed in
the IASB Update.
International Financial
Reporting -- IASB Issues Agenda for November 12-13, 2009 Standards Advisory
Council Meeting
For detail, please contact info@zy-cpa.com
The IASB's
Standards Advisory Council (SAC) is expected to discuss the following agenda
items at its November 12-13, 2009 meeting:
-Overview of IASB activities
in the last 4 months;
-SAC member activities;
-Address by the Chinese Vice
Minister Wang Jun;
-Financial Accounting
Standards Advisory Council update;
-Priorities for the IASB work
plan post June 2011;
-Disclosures - reducing
complexity; and
-Constitutional review.
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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Engagement Quality Review
-- SEC Publishes Proposed PCAOB Rules for Comment
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, the SEC has issued, Notice of Filing of
Proposed Rules on Auditing Standard No. 7, Engagement Quality Review, and
Conforming Amendment. This notice seeks comments from the public on the
previously adopted PCAOB Auditing Standard (AS) No. 7, Engagement Quality
Review, and a conforming amendment to PCAOB Interim Quality Control Standards.
AS 7, as included in this notice, is consistent with its original adoption by
the PCAOB on July 28, 2009. It provides a framework for the engagement quality
reviewer to objectively evaluate the significant judgments made and related
conclusions reached by the engagement team in forming an overall conclusion
about the engagement. According to the PCAOB, this standard and conforming
amendment focus the engagement quality reviewer’s attention on the areas that
are most likely to contain significant engagement deficiencies and increase the
likelihood of identifying and correcting those deficiencies before the audit
report is issued.
If approved by the SEC, AS 7
and the conforming amendment would be effective for engagement quality review
of audits and interim reviews for fiscal years beginning on or after December
15, 2009.
Comments on this proposal are
due November 27, 2009.
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