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Accounting Research
Manager(TM)
Weekly Summary of
Developments
December 28-31, 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
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If you do not have immediate
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of this week's Weekly Summary.
Accounting and SEC
Headlines
Transfers of Financial Assets -- FASB Issues Accounting Standards
Update
Consolidation -- FASB Issues Accounting Standards
Update on Variable Interest Entities
FASB Codification -- FASB Publishes Revised Notice to
Constituents
Subsequent Events -- FASB Proposes Revised Guidance
Compilation and Reviews -- AICPA Issues Audit Risk Alert
Leases -- IASB to Discuss Leases and Other
Matters
Auditing and Internal
Controls Headlines
Audit Evidence -- AICPA Issues Proposal on Specific
Considerations for Selected Items
Auditor's Specialist -- AICPA Issues Proposal on Using the
Work of an Auditor's Specialist
Auditor Communications -- AICPA Issues Proposal on Communicating
Internal Control Related Matters Identified in an Audit
Compilation and Reviews -- AICPA Publishes Guidance
Compilation and Reviews -- AICPA Issues Audit Risk Alert
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ACCOUNTING AND SEC HEADLINES:
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Transfers of Financial
Assets -- FASB Issues
Accounting Standards Update
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The FASB has issued
Accounting Standards Update (ASU) 2009-16, Transfers and Servicing (Topic
860) - Accounting for Transfers of Financial Assets, which formally
codifies FASB Statement No. 166, Accounting for Transfers of Financial
Assets, into the FASB Accounting Standards CodificationTM (Codification). ASU
2009-16 represents a revision to the provisions of former FASB Statement No.
140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities, and will require more information about
transfers of financial assets, including securitization transactions, and where
entities have continuing exposure to the risks related to transferred
financial assets. Among other things, ASU 2009-16:
-Eliminates the concept of a
“qualifying special-purpose entity”;
-Changes the requirements for
derecognizing financial assets; and
-Enhances information
reported to users of financial statements by providing greater transparency
about transfers of financial assets and an entity’s continuing involvement in
transferred financial assets.
ASU 2009-16 is effective at
the start of a reporting entity’s first fiscal year beginning after November
15, 2009, or January 1, 2010, for a calendar year-end entity. Early application
is not permitted.
Consolidation -- FASB Issues Accounting Standards
Update on Variable Interest Entities
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The FASB has issued ASU
2009-17, Consolidations (Topic 810) - Improvements to Financial Reporting by
Enterprises Involved with Variable Interest Entities, which codifies FASB
Statement No. 167, Amendments to FASB Interpretation No. 46(R). ASU
2009-17 represents a revision to former FASB Interpretation No. 46 (Revised
December 2003), Consolidation of Variable Interest Entities, and changes
how a reporting entity determines when an entity that is insufficiently
capitalized or is not controlled through voting (or similar rights) should be
consolidated. The determination of whether a reporting entity is required to
consolidate another entity is based on, among other things, the:
-Other entity’s purpose and
design; and
-Reporting entity’s ability
to direct the activities of the other entity that most significantly impact the
other entity’s economic performance.
ASU 2009-17 also requires a
reporting entity to provide additional disclosures about its involvement with
variable interest entities and any significant changes in risk exposure due to
that involvement. A reporting entity will be required to disclose how its
involvement with a variable interest entity affects the reporting entity’s
financial statements.
ASU 2009-17 is effective at
the start of a reporting entity’s first fiscal year beginning after November
15, 2009, or January 1, 2010, for a calendar year-end entity. Early application
is not permitted.
FASB Codification -- FASB Publishes Revised Notice to
Constituents
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The FASB has published
version 4.0 of its Notice to Constituents -About the Codification. This
publication provides information aimed at helping constituents obtain a good understanding
of the Codification structure, content, style, and history. In this updated
version, the FASB has added information to clarify the concept of "pending
content" and maintenance updates.
As the FASB and SEC amend
existing Codification paragraphs, both the current paragraph and the updated
paragraph will reside in the Codification until such time that the new guidance
is completely effective for all entities. During that period, the Codification
will emphasize the newly amended paragraph as "Pending Content" and
will provide a link to the related transition guidance. According to the FASB,
the intent of this type of presentation is to provide users with information
about how a paragraph will change when new guidance becomes authoritative. When
an amended paragraph is fully effective, the pending content guidance will be
removed. Given different fiscal year ends with various companies, the FASB has
designed a model to keep pending content in the system for a period of time
sufficient for all entities to obtain the authoritative guidance that applies
to their circumstances. The model provides that the expected roll-off date
should be six months following the latest fiscal year end that an "extreme
entity" (i.e., an entity who adopts at the latest possible date allowed by
the transition) could have applied the original requirements.
The FASB also added to this
publication a description of "Maintenance Updates" made to the
Codification. Maintenance Updates are nonsubstantive
corrections that are prepared by the FASB staff and are not addressed by the
FASB itself.
Subsequent Events -- FASB Proposes Revised Guidance
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The FASB has issued for
public comment a proposed ASU, Subsequent Events: Amendments to Certain
Recognition and Disclosure Requirements. This proposal addresses both the
interaction of the requirements of Topic 855, Subsequent Events, with
the registration requirements of the SEC and the intended breadth of the reissuance disclosures provision related to subsequent
events. The proposed ASU would amend Topic 855 as follows:
-An entity filing financial
statements with the SEC would be required to evaluate subsequent events through
the date the financial statements are issued. However, such an entity would not
be required to disclose the date through which subsequent events were
evaluated.
-An entity that does not file
financial statements with the SEC would: (a) evaluate subsequent events
through the date the financial statements are available to be issued; or (b)
evaluate subsequent events through the date that the financial statements are
issued if it expects to widely distribute its financial statements and then
disclose which evaluation method was followed. The entity, as currently
required by Topic 855, would also disclose the date through which subsequent
events had been evaluated.
-The scope of the reissuance disclosure requirements would be changed to
include restated financial statements only.
As proposed, this guidance
would be effective upon issuance of a final ASU.
Comments on this proposed ASU
are due January 28, 2010.
Compilation and Reviews -- AICPA Issues Audit Risk Alert
For detail, please contact info@zy-cpa.com
The AICPA has issued an Audit
Risk Alert, Compilation and Review Developments - 2009. This publication
is intended to provide auditors performing compilation and reviews with an
overview of recent economic, industry, technical, regulatory, and professional
developments that may affect these type of engagements
they perform. This publication also includes a section discussing current and
future rulemaking or other activities that may impact compilation and review
engagements in the near future.
Leases -- IASB to Discuss Leases and Other
Matters
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The IASB is expected to
discuss the following agenda items at its meeting on January 5, 2010:
-Leases; and
-Insurance contracts.
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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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Audit Evidence -- AICPA Issues Proposal on Specific
Considerations for Selected Items
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The AICPA has issued for
public comment an exposure draft of a proposed Statement on Auditing Standards
(SAS), Audit Evidence - Specific Considerations for Selected Items. This
proposed SAS applies the Auditing Standards Board’s (ASB’s)
clarity drafting conventions and addresses convergence with International
Standards on Auditing.This proposed SAS addresses
specific considerations by the auditor in obtaining sufficient appropriate
audit evidence in accordance with relevant existing and proposed SASs. Specifically, this SAS addresses specific
considerations regarding certain aspects of the following items:
-Investments in securities
and derivative instruments;
-Inventory;
-Litigation, claims, and
assessments involving the entity; and
-Segment information in an
audit of financial statements.
As proposed, this guidance
would be effective for audits of financial statements for periods beginning on
or after December 15, 2010.
Comments on this proposed SAS
are due April 30, 2010.
Auditor's Specialist -- AICPA Issues Proposal on Using the
Work of an Auditor's Specialist
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The AICPA has issued for
public comment an exposure draft of a proposed SAS, Using the Work of an
Auditor’s Specialist. This proposed SAS would supersede SAS No. 73, Using
the Work of a Specialist, and applies the ASB’s
clarity drafting conventions and addresses convergence with International
Standards on Auditing. This proposed SAS addresses the auditor’s
responsibilities relating to the work of an individual or organization
possessing expertise in a field other than accounting or auditing when that
work is used to assist the auditor in obtaining sufficient appropriate audit
evidence. Among other things, this proposed SAS takes the view that audit
evidence produced by management's experts (internal or external) needs to be
evaluated by the auditor for relevance and reliability like any other audit
evidence.
As proposed, this guidance
would be effective for audits of financial statements for periods beginning on
or after December 15, 2010.
Comments on this proposed SAS
are due April 30, 2010.
Auditor Communications -- AICPA Issues Proposal on
Communicating Internal Control Related Matters Identified in an Audit
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The AICPA has issued for
public comment an exposure draft of a proposed SAS, Communicating Internal
Control Related Matters Identified in an Audit (Redrafted). This proposed
SAS would supersede SAS No. 115, Communicating Internal Control Related
Matters Identified in an Audit, and applies the ASB’s
clarity drafting conventions and addresses convergence with International
Standards on Auditing. Among the most significant changes to SAS 115 this
proposed SAS makes, are the inclusion of requirements for the auditor to:
-Determine whether, on the
basis of the audit work performed, the auditor has identified one or more
deficiencies in internal control.
-Communicate, in writing or
orally, only to management other deficiencies in internal control identified
during the audit that have not been communicated to management by other parties
and that, in the auditor’s professional judgment, are of sufficient importance
to merit management’s attention.
-Include in the written
communication an explanation of the potential effects of the significant
deficiencies and material weaknesses identified.
-Include specific matters in
a written communication stating that no material weaknesses were identified
during the audit that are similar to those in the written communication of
significant deficiencies and material weaknesses.
As proposed, this guidance
would be effective for audits of financial statements for periods beginning on
or after December 15, 2010.
Comments on this proposed SAS
are due April 30, 2010.
Compilation and Reviews -- AICPA Publishes Guidance
For detail, please contact info@zy-cpa.com
The AICPA has issued has
published Statement on Standards for Accounting and Review Services (SSARS) No.
19, Compilation and Review Engagements. This standard establishes:
-A framework for the
performance and reporting on compilation and review engagements;
-Standards and provides
guidance on compilations of financial statements; and
-Standards and provides
guidance on reviews of financial statements.
SSARS 19 replaces several key
sections of the existing literature addressing compilations and reviews of
financial statements.
SSARS 19 is effective for
financial statements for periods ending on or after December 15, 2010. Early
implementation of certain requirements and guidance related to compilations
performed by accountants who are not independent is permitted.
Compilation and Reviews -- AICPA Issues Audit Risk Alert
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, Compilation
and Review Developments - 2009. This publication is intended to provide
auditors performing compilation and reviews with an overview of recent
economic, industry, technical, regulatory, and professional developments that
may affect these type of engagements they perform.
This publication also includes a section discussing current and future
rulemaking or other activities that may impact compilation and review
engagements in the near future.
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