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Accounting Research Manager(TM)
Weekly Summary of Developments
February 1-5, 2010
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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

FASB Codification -- FASB Publishes Technical Corrections to Various Topics
New Accounting Standards -- Checklist Updated
Revenue Recognition -- FASB Discusses Revenue Recognition and Other Matters
Comprehensive Income -- FASB Discusses Comprehensive Income and Other Matters
Climate Disclosures -- SEC Publishes Interpretive Guidance on Disclosure Related to Climate Change
AICPA National Conference on Current SEC and PCAOB Developments -- Newsletter Issued

Government Headlines

GASB Standards -- GASB Proposes to Enhance the Usefulness of its Codification to Constituents

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ACCOUNTING AND SEC HEADLINES:
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FASB Codification -- FASB Publishes Technical Corrections to Various Topics
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The FASB has issued Accounting Standards Update (ASU) No. 2010-08, Technical Corrections to Various Topics,thereby amending the FASB Accounting Standards Codification^TM (Codification). This ASU resulted from a review by the FASB of its standards to determine if any provisions are outdated, contain inconsistencies, or need clarifications to reflect the FASB’s original intent. The FASB believes the amendments do not fundamentally change U.S. GAAP. However, certain clarifications on embedded derivatives and hedging reflected in Topic 815, Derivatives and Hedging, may cause a change in the application of the guidance in Subtopic 815-15. Accordingly, the FASB provided special transition provisions for those amendments.

The ASU contains various effective dates. The clarifications of the guidance on embedded derivatives and hedging (Subtopic 815-15) are effective for fiscal years beginning after December 15, 2009. The amendments to the guidance on accounting for income taxes in a reorganization (Subtopic 852-740) applies to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. All other amendments are effective as of the first reporting period (including interim periods) beginning after the date this ASU was issued (February 2, 2010).

New Accounting Standards -- Checklist Updated
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We have updated our publication "Summary Checklist of Recent Authoritative U.S. Accounting Standards." This checklist is intended to serve as a reference tool to help users ensure that they have considered authoritative standards recently issued or approved by the FASB. The standards are listed by source and a summary of the transition guidance is provided with a reference to the relevant Codification paragraph(s). Effective dates and application (adoption) requirements are also presented.

We have updated this checklist to reflect the issuance of: (a) ASU 2010-07, Not-for-Profit Entities (Topic 958): Not-for-Profit Entities: Mergers and Acquisitions; and (b) ASU 2010-08, discussed above. ASU 2010-07 was issued to include in the Codification the requirements in FASB Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions.

See our Literature Update for complete details.

Revenue Recognition -- FASB Discusses Revenue Recognition and Other Matters
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As reported in its "Summary of Board Decisions" publication, the FASB met on February 3, 2010, and discussed: (a) revenue recognition; and (b) reporting discontinued operations. Regarding its project on revenue recognition, the FASB considered the accounting for costs in contracts with customers and decided that an entity should recognize as expenses all costs of obtaining a contract (e.g., the costs of selling and marketing, including direct-response advertising). The FASB decided to develop guidance on how an entity should account for the costs of setting up and fulfilling a contract.

The FASB also discussed the scope of a proposed ASU on Topic 205, Presentation of Financial Statements. The FASB decided to eliminate existing exceptions to the scope guidance in Subtopic 205-20 relating to discontinued operations. The FASB believes this change will have little practical effect on most reporting entities, except for requiring an entity to consider whether the disposal of an equity method investment should be reported and disclosed as a discontinued operation. In addition, the FASB noted that eliminating those scope exceptions will simplify U.S. GAAP requirements while promoting convergence of those requirements and IFRS 5, Non-current Assets Held for Sale and Discontinued Operations.

Comprehensive Income -- FASB Discusses Comprehensive Income and Other Matters
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As reported in its "Summary of Board Decisions" publication, the FASB and IASB (the Boards) held a joint video conference on February 2, 2010, and discussed the following topics: (a) comprehensive income; (b) leases; (c) financial instruments with characteristics of equity; and (d) accounting for financial instruments: hedge accounting. Regarding the project on comprehensive income, the Boards made a number of tentative decisions including the following:

-An entity must display total comprehensive income and its components in a continuous statement of comprehensive income;
-The continuous statement of comprehensive income must be displayed with both the "profit or loss" or "net income" and "other comprehensive income" sections;
-Affirmed the existing requirements that provide the option to display components of other comprehensive income net of related income tax expense or before related income tax effects with one amount shown for the aggregate income tax effects on the face of the continuous statement of comprehensive income; and
-Affirmed not to change the guidance on determining the items that must be presented in other comprehensive income.

Regarding their project on financial instruments, the Boards discussed possible objectives for hedge accounting and whether hedging risk components (bifurcation-by-risk) should be permitted. No decision was made on the objective. The IASB tentatively decided to permit bifurcation-by-risk for financial items and indicated a preference for permitting bifurcation-by-risk for nonfinancial items. Furthermore, the IASB requested that its staff explore a possible approach that the hedged item must be both separately identifiable and measurable for the purpose of determining hedge effectiveness for consideration at a future meeting. The FASB decided to explore bifurcation-by-risk for financial items and requested its staff to develop possible approaches for consideration at a future meeting.

Climate Disclosures -- SEC Publishes Interpretive Guidance on Disclosure Related to Climate Change
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The SEC has published an Interpretive Release, Commission Guidance Regarding Disclosure Related to Climate Change. This interpretive release provides guidance on certain existing disclosure rules that may require a company to disclose the effect that business or legal developments related to climate change may have on its business. The relevant rules cover a company's risk factors, business description, legal proceedings, and management’s discussion and analysis of financial condition and results of operations. Specifically, this interpretive release highlights the following areas as examples of where climate change may trigger disclosure requirements:

-Effect of legislation and regulation;
-Effect of international accords;
-Indirect consequences of regulation or business trends; and
-Physical impacts of climate change.

This guidance is effective upon publication in the Federal Register.

AICPA National Conference on Current SEC and PCAOB Developments -- Newsletter Issued
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We have prepared a newsletter that documents the significant accounting, reporting and auditing matters discussed at the AICPA's SEC and PCAOB Conference held on December 7-9, 2009. This annual conference addresses common financial reporting issues that companies should be considering when preparing their financial statements. We believe this newsletter may be of interest to nonpublic companies and their auditors as well because a number of general interest accounting topics were discussed at the conference. Our newsletter compliments our Literature Update dated December 11, 2009 , that was issued immediately after this conference.

See our Literature Update for complete details.

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GOVERNMENT HEADLINES:
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GASB Standards -- GASB Proposes to Enhance the Usefulness of its Codification to Constituents
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The GASB issued an exposure draft of a proposed Statement, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. This proposal is intended to enhance the usefulness of the GASB's Codification by incorporating guidance that previously could only be found in certain FASB and AICPA pronouncements. This literature has not been maintained for the state and local government environment. According to the GASB, by incorporating and maintaining this guidance as a single source, the GASB will reduce the complexity of locating and using authoritative literature needed to prepare state and local government financial reports.

This proposal is expected to incorporate into the GASB's authoritative literature the applicable guidance previously presented in the following pronouncements issued before November 30, 1989:

-FASB Statements and Interpretations;
-APB Opinions; and
-Accounting Research Bulletins of the AICPA's Committee on Accounting Procedure.

Comments on this proposal are due by July 31, 2010.

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