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Accounting Research
Manager(TM)
Weekly Summary of
Developments
November 30 - December 4,
2009
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Accounting Research
Manager subscriber,
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Manager database now contains this week's weekly summary of developments. Click
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Accounting and SEC
Headlines
FASB Meeting -- FASB Ratifies November 19, 2009 EITF
Decisions
Financial Instruments -- FASB Issues Summary of Feedback
Received on Accounting for Financial Instruments
Financial Liabilities -- IFRIC Issues Guidance on Extinguishing
Financial Liabilities
Pension Accounting -- IASB Issues Amendment to IFRIC 14
IFRS Adoption -- IASB Proposes Change to IFRS
First-Time Adoption
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ACCOUNTING AND SEC HEADLINES:
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FASB Meeting -- FASB
Ratifies November 19, 2009 EITF Decisions
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As reported in its
"Summary of Board Decisions" publication, the FASB met on December 2,
2009, and ratified decisions made by the EITF at its meeting held on November
19, 2009. Specifically, the FASB ratified EITF Issue No. 09-E, "Accounting
for Distributions to Shareholders with Components of Stock and Cash.” The
guidance in Issue 09-E is effective for interim and annual periods ending on or
after December 15, 2009, and will require retrospective application.
In addition, the FASB
ratified the following consensuses-for-exposure reached at the November 19,
2009 EITF meeting:
-EITF Issue No. 09-F, “Casino
Base Jackpot Liabilities”;
-EITF Issue No. 09-G,
“Clarification of the Definition of Deferred Acquisition Cost of Insurance
Entities”;
-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”; and
-EITF Issue No. 09-J, “Impact
of Denominating the Exercise Price of a Share-Based Payment Award in the
Currency of the Market in which the Underlying Equity Security Trades.”
The comment period for each
of these consensuses-for-exposure is expected to begin between December 11,
2009 and December 16, 2009, and end no later than February 12, 2010.
For additional information on
these decisions, consult our previously issued EITF Flash Report: For detail, please contact info@zy-cpa.com
Financial Instruments --
FASB Issues Summary of Feedback Received on Accounting for Financial
Instruments
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The FASB has issued a
document, Constituent Outreach Summary: Accounting for Financial Instruments
- November 2009. This document is a summary of input received from various
investors, preparers, auditors, regulators, and valuation specialists on its
project on accounting for financial instruments. As a way of obtaining early
input on tentative decisions reached and issues relevant to its project on the
accounting for financial instruments prior to the issuance of a proposed
Accounting Standards Update, the FASB and its staff have held informal
discussions in addition to public roundtables with constituents. This document
is being provided by the FASB for the information and convenience of
constituents who are following the project, and is organized into two parts:
(1) investors; and (2) others. Major issues relevant to this project that are
covered in this document are:
-Classification and
measurement;
-Fair value of loans and core
deposits;
-Credit impairment; and
-Presentation.
Financial Liabilities --
IFRIC Issues Guidance on Extinguishing Financial Liabilities
For detail, please contact info@zy-cpa.com
The International Financial
Reporting Interpretations Committee (IFRIC) has issued IFRIC 19, Extinguishing
Financial Liabilities with Equity Instruments, which provides guidance on how
to account for the extinguishment of a financial liability by the issuance of
equity instruments. These transactions are often referred to as debt-for-equity
swaps. IFRIC 19 clarifies the requirements in IFRSs
when an entity renegotiates the terms of a financial liability with its
creditor and the creditor agrees to accept the entity’s shares or other equity
instruments to settle the financial liability fully or partially. The guidance
in IFRIC 19 does not address the accounting by a creditor, but does include the
following guidance:
-The entity’s equity
instruments issued to a creditor are part of the consideration paid to
extinguish the financial liability.
-The equity instruments
issued are measured at their fair value. If their fair value cannot be reliably
measured, the equity instruments should be measured to reflect the fair value
of the financial liability extinguished.
-The difference between the
carrying amount of the financial liability extinguished and the initial
measurement amount of the equity instruments issued is included in the entity’s
profit or loss for the period.
IFRIC 19 is effective for
annual periods beginning on or after July 1, 2010. Early application is
permitted.
Pension Accounting -- IASB
Issues Amendment to IFRIC 14
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The IASB has issued, Prepayments
of a Minimum Funding Requirement, which is an amendment to IFRIC 14, IAS
19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and
their Interaction, which itself is an interpretation of IAS 19, Employee
Benefits. The amendment applies in the limited circumstances when an entity
is subject to minimum funding requirements and makes an early payment of
contributions to cover those requirements. The amendment permits such an entity
to treat the benefit of such an early payment as an asset.
The amendment is effective
for annual periods beginning on or after January 1, 2011. Early application is
permitted.
IFRS Adoption -- IASB
Proposes Change to IFRS First-Time Adoption
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The IASB has issued for
public comment an exposure draft, Limited Exemption from Comparative IFRS 7
Disclosures for First-Time Adopters - Proposed Amendment to IFRS 1. This
proposal would amend IFRS 1, First-time Adoption of International Financial
Reporting Standards, to provide a limited exemption to first-time adopters
of IFRSs from having to provide comparative
disclosures required by amendments to IFRS 7, Financial Instruments:
Disclosures, issued in March 2009.
As proposed, this guidance
would be effective for annual periods beginning on or after July 1, 2010, with
early application permitted.
Comments on this proposal are
due December 29, 2009.
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