===================================================
Accounting Research
Manager(TM)
Weekly Summary of
Developments
February 22-26, 2010
===================================================
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
Subsequent Events -- FASB Issues Guidance on Subsequent
Events
Consolidation -- FASB Issues Guidance for Certain
Investment Funds
Global Accounting
Standards -- SEC Issues
Statement and Approves Staff Work Plan on Global Accounting Standards
New Accounting Standards -- Checklist Updated
GAAP Disclosures -- Special Edition of GAAP Financial
Statement Disclosures Manual Published
Proxy Materials -- SEC Amends Rules Regarding Internet
Availability of Proxy Materials
Proxy Disclosures -- SEC Issues Technical Correction to
Proxy Disclosure Enhancements
Acquired Loan Receivables -- SEC Staff Position on Accounting for
the Discount on Acquired Loan Receivables Discussed
Engagement Quality Review -- PCAOB Publishes Staff Q&A on AS 7
Financial Instruments -- FASB Discusses Equity Method and Other
Matters
EITF Materials -- FASB Issues Materials for March 17-18,
2010 EITF Meeting
International Accounting -- IASB Publishes Agenda for March 4-5,
2010 IFRIC Meeting
Auditing and Internal
Controls Headlines
Other Information -- AICPA Issues Guidance on Other
Information
Supplementary Information -- AICPA Issues Guidance on Supplementary
Information
Required Supplementary
Information -- AICPA
Issues Guidance on Required Supplementary Information
Checklist -- Checklist of Recent AICPA
Pronouncements Published
Omitted Procedures -- AICPA Issues Proposal on Consideration
of Omitted Procedures
Financial Statements -- AICPA Issues Proposal on Consistency
of Financial Statements
Single Audits -- New Edition of Knowledge-Based Single
Audits
Summary Financial
Statements -- Proposed
AICPA Auditing Standard Discussed
Engagement Quality Review -- PCAOB Publishes Staff Q&A on AS 7
Government Headlines
Checklist -- Checklist of Recent GASB
Pronouncements Published
Single Audits -- New Edition of Knowledge-Based Single
Audits
Financial Instruments -- GASB Proposal Discussed
=============================
ACCOUNTING AND SEC HEADLINES:
=============================
Subsequent Events -- FASB
Issues Guidance on Subsequent Events
For detail, please contact info@zy-cpa.com
The FASB has issued
Accounting Standards Update (ASU) No. 2010-09, Subsequent Events (Topic
855): Amendments to Certain Recognition and Disclosure Requirements. The
amendments in the ASU remove the requirement for an SEC filer to disclose a
date through which subsequent events have been evaluated in both issued and
revised financial statements. Revised financial statements include financial
statements revised as a result of either correction of an error or
retrospective application of U.S. GAAP. The FASB also clarified that if the
financial statements have been revised, then an entity that is not an SEC filer
should disclose both the date that the financial statements were issued or
available to be issued and the date the revised financial statements were
issued or available to be issued. The FASB believes these amendments remove
potential conflicts with the SEC’s literature.
In addition, the amendments
in the ASU requires an entity that is a conduit bond obligor for conduit debt
securities that are traded in a public market to evaluate subsequent events
through the date of issuance of its financial statements and must disclose such
date.
All of the amendments in the
ASU were effective upon issuance (February 24, 2010) except for the use of the
issued date for conduit debt obligors. That amendment is effective for interim
or annual periods ending after June 15, 2010.
Consolidation -- FASB
Issues Guidance for Certain Investment Funds
For detail, please contact info@zy-cpa.com
The FASB has issued ASU
2010-10, Consolidation (Topic 810): Amendments for Certain Investment Funds.
The amendments in the ASU defer the effective date of certain amendments to the
consolidation requirements of FASB Accounting Standards CodificationTM (Codification) Topic 810, Consolidation,resulting
from the issuance of FASB Accounting Standard No. 167, Amendments to FASB
Interpretation 46(R). Specifically, the amendments to the consolidation
requirements of Topic 810 resulting from the issuance of Statement 167 are
deferred for a reporting entity’s interest in an entity:
-That has all the attributes
of an investment company; or
-For which it is industry
practice to apply measurement principles for financial reporting purposes that
are consistent with those followed by investment companies.
The ASU does not defer the
disclosure requirements in the Statement 167 amendments to Topic 810. The
amendments in this ASU are effective as of the beginning of a reporting
entity's first annual period that begins after November 15, 2009, and for
interim for interim periods within that first annual reporting period. Early
application is not permitted.
Global Accounting
Standards -- SEC Issues Statement and Approves Staff Work Plan on Global
Accounting Standards
For detail, please contact info@zy-cpa.com
The SEC has issued Commission
Statement in Support of Convergence and Global Accounting Standards
(Statement), which lays out its position regarding global accounting standards
and makes clear that the SEC continues to believe that a single set of
high-quality globally accepted accounting standards would benefit
The SEC also directed its
staff to execute a “Work Plan” which is intended to aid the SEC in its
evaluation of the impact that the use of IFRS by
-Determining whether IFRS is
sufficiently developed and consistent in application;
-Ensuring that accounting
standards are set by an independent standard setter and for the benefit of
investors;
-Investor understanding and
education regarding IFRS, and how it differs from U.S. GAAP;
-Understanding whether U.S.
laws or regulations, outside of the securities laws, would be affected by a
change in accounting standards;
-Understanding the impact on
both large and small companies; and
-Determining whether the
people who prepare and audit financial statements are sufficiently prepared to
make the conversion to IFRS.
The SEC staff intends to
provide public progress reports on the Work Plan, as well as the status of the
FASB and IASB convergence projects, beginning no later than October 2010 and
frequently thereafter until the work is complete. The SEC indicated that by
2011, assuming completion of these convergence projects and the staff's Work
Plan, it will decide whether to incorporate IFRS into the
New Accounting Standards
-- Checklist Updated
For detail, please contact info@zy-cpa.com
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 our checklist
to reflect: (a) ASU 2010-09; and (b) ASU 2010-10. See our
discussion above on these ASUs.
See our Literature Update for
complete details.
GAAP Disclosures --
Special Edition of GAAP Financial Statement Disclosures Manual Published
For detail, please contact info@zy-cpa.com
We have published the Special
Edition: GAAP Financial Statement Disclosures Manual (the Manual), which
provides comprehensive guidance on the subject of financial statement
disclosures. The Manual is intended to be used as a guide for determining
whether the financial statements of for-profit type entities include the
disclosures and key presentation requirements as required by U.S. GAAP. This
edition of the Manual incorporates the financial statement disclosure
requirements through ASU No. 2009-13, Revenue Recognition (Topic 605) -
Multiple Deliverable Revenue Arrangements.
See our Literature Update for
complete details.
Proxy Materials -- SEC
Amends Rules Regarding Internet Availability of Proxy Materials
For detail, please contact info@zy-cpa.com
The SEC has issued a final
rule, Amendments to Rules Requiring Internet Availability of Proxy
Materials. This final rule amends rules under the Securities Exchange Act
of 1934 and the Securities Act of 1933 to clarify and provide additional
flexibility regarding the format of the “Notice of Internet Availability of
Proxy Materials” that is sent to shareholders and to provide shareholders with
guidance as to how to access the proxy materials online, request a paper copy
of the proxy materials, and vote their shares.
This final rule is effective
March 29, 2010.
Proxy Disclosures -- SEC
Issues Technical Correction to Proxy Disclosure Enhancements
For detail, please contact info@zy-cpa.com
The SEC issued a final rule, Proxy
Disclosure Enhancements; Correction. This final rule contains technical corrections
to amendments included in the SEC’s final rule, Proxy Disclosure
Enhancements, issued December 16, 2009. Among the revisions, changes were
made to Forms 10-Q and 10-K to retain the current numbering of the items
appearing in each form to avoid confusion that might otherwise arise from
references to the current numbering in professional literature.
The technical correction is
effective February 28, 2010, consistent with the original rule.
Acquired Loan Receivables
-- SEC Staff Position on Accounting for the Discount on Acquired Loan
Receivables Discussed
For detail, please contact info@zy-cpa.com
We have published a Hot
Topic, SEC Staff Position on Accounting for the
Discount on Acquired Loan Receivables. This document discusses the two
methods that have evolved for the accounting for the discount on acquired loan
receivables. Topics covered in this document are:
-Scope of discussion;
-Accounting policy based on
contractual cash flows;
-Accounting policy based on
expected cash flows; and
-SEC staff position on the
two methods of accounting for discount.
See our Hot Topic for
complete details.
Engagement Quality Review
-- PCAOB Publishes Staff Q&A on AS 7
For detail, please contact info@zy-cpa.com
The PCAOB has published a
staff question and answer (Q&A) on the documentation requirements of
Auditing Standard (AS) No. 7, Engagement Quality Review. AS 7 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. The SEC approved AS
7 on January 15, 2010. In its order approving AS 7, the SEC encouraged the
PCAOB to provide further implementation guidance on the documentation
requirements of the standard. The PCAOB staff believes these Q&As provide this
implementation guidance.
The PCAOB publishes staff Q&As to help auditors
implement, and the PCAOB’s staff administer, the PCAOB’s standards. The views expressed in this staff
guidance are not rules of the PCAOB, nor have they been approved by the PCAOB.
Financial Instruments --
FASB Discusses Equity Method and Other Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on February
24, 2010, and discussed the following topics:
-Accounting for financial
instruments: equity method;
-Accounting for financial
instruments: scope;
-Accounting for financial
instruments: liabilities; and
-Disclosures about credit
quality and the allowance for credit losses.
The FASB discussed nonconsolidated equity investments accounted for under the
equity method and decided that an investor should apply the equity method of
accounting if the investor has significant influence over the investee and the investment is considered related to the
investor’s consolidated businesses. Otherwise, the investment would be measured
at fair value with changes included in earnings. The FASB decided that an
entity may not elect the fair value option for equity investments that would be
accounted for under the equity method.
The FASB also discussed the
scope of a proposed ASU to be issued and decided that certain aspects of the
classification and measurement provisions would be effective for nonpublic
entities with less than $1 billion in consolidated total assets with a delayed
effective date. The FASB decided that these exempted entities would be required
to apply all classification and measurement guidance in the proposed ASU four
years after the original effective date.
EITF Materials -- FASB
Issues Materials for March 17-18, 2010 EITF Meeting
For detail, please contact info@zy-cpa.com
The FASB has issued the
following materials for the March 17-18, 2010 EITF meeting:
-Agenda committee report;
-EITF Issue No. 08-9,
"Milestone Method of Revenue Recognition" (supplement and working
group report);
-EITF Issue No. 09-B,
"Consideration of an Insurer's Accounting for Majority-Owned Investments
When Ownership Is through a Separate Account" (supplement);
-EITF Issue No. 09-F,
"Casino Base Jackpot Liabilities" (comment letters);
-EITF Issue No. 09-G,
"Clarification of the Definition of Deferred Acquisition Costs of
Insurance Entities" (comment letters);
-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" (comment letters); and
-EITF Issue No. 09-J,
"Effect of Denominating the Exercise Price of a Share-Based Payment Award
in the Currency of the Market in which the Underlying Equity Security Primarily
Trades" (supplement).
The EITF will be considering
comments it received on the consensuses-for-exposures on Issues 09-F, 09-G,
09-I and 09-J, reached at the November 19, 2009 meeting.
International Accounting
-- IASB Publishes Agenda for March 4-5, 2010 IFRIC Meeting
For detail, please contact info@zy-cpa.com
The IASB has published an
agenda for the March 4-5, 2010 meeting of the International Financial Reporting
Interpretations Committee (IFRIC). Topics expected to be discussed at this
IFRIC meeting include the following:
-IAS 16, Property, Plant
and Equipment;
-Review of tentative agenda
decisions published in January 2010 IFRIC Update;
-Annual Improvements project
(2008-2010 and 2009-2011 cycles);
-Staff recommendations for
tentative agenda decisions; and
-IFRIC work in progress.
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:
=======================================
Other Information -- AICPA
Issues Guidance on Other Information
For detail, please contact info@zy-cpa.com
The AICPA has issued
Statement on Auditing Standards (SAS) No. 118, Other Information in Documents
Containing Audited Financial Statements. SAS 118 makes a number of changes
to existing standards, including:
-Eliminating the distinction
between other information that is included in an auditor-submitted document
that contains the client’s basic financial statements and the auditor’s report
thereon and other information that is in a client-prepared document;
-Requiring the auditor read
the other information of which the auditor is aware in order to identify
material inconsistencies, if any, with the audited financial statements;
-Requiring the auditor make
appropriate arrangements with management or those charged with governance to
obtain the other information prior to the report release date; and
-Requiring the auditor
communicate with those charged with governance the auditor’s responsibility
with respect to the other information, any procedures performed relating to the
other information, and the results.
SAS 118 is effective for
audits of financial statements for periods beginning on or after December 15,
2010. Early application is permitted
Supplementary Information
-- AICPA Issues Guidance on Supplementary Information
For detail, please contact info@zy-cpa.com
The AICPA has issued SAS No.
119, Supplementary Information in Relation to the Financial Statements as a
Whole. SAS 119 makes a number of changes to existing standards, including:
-Establishing a requirement
that in order to report on whether supplementary information is fairly stated
in relation to the financial statements as a whole that the auditor determine
that specified conditions are met;
-Requiring that the auditor
obtain the agreement of management that it acknowledges and understands its
responsibility; and
-Requiring the auditor to
report on supplementary information presented with financial statements in
either: (a) an explanatory paragraph following the opinion paragraph in
the auditor’s report on the financial statements; or (b) in a separate
report on the financial statements.
SAS 119 is effective for
audits of financial statements for periods beginning on or after December 15,
2010. Early application is permitted.
Required Supplementary
Information -- AICPA Issues Guidance on Required Supplementary Information
For detail, please contact info@zy-cpa.com
The AICPA has issued SAS No.
120, Required Supplementary Information. SAS 120 makes a number of
changes to existing standards, including:
-Defining “required
supplementary information” as information that a designated accounting standard
setter requires to accompany an entity’s basic financial statements;
-Defining “designated
accounting standard setter” as a body designated by the AICPA council to
establish GAAP pursuant to Rule 202, Compliance With Standards, and Rule
203, Accounting Principles;
-Establishing the auditor’s
objectives when a designated accounting standard setter requires information to
accompany an entity’s basic financial statement; and
-Requiring auditors apply
certain specified procedures to required supplementary information.
SAS 120 is effective for
audits of financial statements for periods beginning on or after December 15,
2010. Early application is permitted.
Checklist -- Checklist of
Recent AICPA Pronouncements Published
For detail, please contact info@zy-cpa.com
We have published a new
checklist, "Summary Checklist of Recent Authoritative AICPA Professional
Standards." This checklist is intended to serve as a reference used to
review those engagement and other related authoritative standards recently
issued by the AICPA. This checklist currently reflects pronouncements with
effective dates beginning on or after December 15, 2008, and will be updated
each time the AICPA revises its authoritative literature. The checklist
includes the above discussed: (a) SAS 118; (b) SAS 119; and (c)
SAS 120.
See our Literature Update for
complete details.
Omitted Procedures --
AICPA Issues Proposal on Consideration of Omitted Procedures
For detail, please contact info@zy-cpa.com
The Auditing Standards Board
(ASB) of the AICPA has issued for public comment a proposed SAS, Consideration
of Omitted Procedures After the Report Release Date.
This proposed SAS would supersede SAS No. 46, Consideration of Omitted
Procedures After the Report Date. This proposal
addresses the auditor’s responsibilities when, subsequent to the report release
date, the auditor concludes that one or more auditing procedures considered
necessary to be performed in the circumstances existing at the time of the
audit were omitted from the audit of the financial statements, but no
indication exists that those financial statements are not fairly presented in
accordance with the applicable financial reporting framework.
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 May 31, 2010.
Financial Statements --
AICPA Issues Proposal on Consistency of Financial Statements
For detail, please contact info@zy-cpa.com
The ASB of the AICPA has
issued for public comment a proposed SAS, Consistency of Financial Statements.This
proposed SAS would supersede SAS No. 1, Consistency of Application of
Generally Accepted Accounting Principles, to apply the ASB’s
clarity drafting conventions. This proposed SAS requires the auditor to
evaluate a material change in financial statement classification and the
related disclosure to determine whether such a change is also either a change
in accounting principle or an adjustment to correct a material misstatement in
previously issued 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 May 19, 2010.
Single Audits -- New
Edition of Knowledge-Based Single Audits
For detail, please contact info@zy-cpa.com
We have published the 2010
edition of Knowledge-Based Single Audits. This publication is designed
to help the auditor efficiently and effectively perform the compliance audit
portion of the single audit in accordance with auditing standards generally
accepted in the U.S. (GAAS), Government Auditing Standards (GAGAS), and the
audit requirements of U.S. Office of Management and Budget Circular A-133. This
edition includes revisions and updates to reflect current authoritative
literature and, among other things: (a) SAS No. 117, Compliance
Audits; and (b) relevant rules and requires resulting from the
American Recovery and Reinvestment Act of 2009.
See our Literature Update for
complete details.
Summary Financial
Statements -- Proposed AICPA Auditing Standard Discussed
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that discusses the AICPA's proposed SAS, Engagements
to Report on Summary Financial Statements, which would supersede SAS 42 (AU
Section 552), Reporting on Condensed Financial Statements and Selected
Financial Data. The proposed SAS addresses the auditor’s responsibilities
when reporting on summary financial statements derived from financial
statements audited by that same auditor and eliminates reporting on selected
financial data. To facilitate convergence with the International Standards on
Auditing (ISA), the proposed standard has been drafted using ISA 810, Engagements
to Report on Summary Financial Statements, as a base. The differences
between the AICPA’s proposed SAS and ISA 810 that
have no compelling reason have been eliminated.
Engagement Quality Review
-- PCAOB Publishes Staff Q&A on AS 7
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, the PCAOB has published a staff question and
answer (Q&A) on the documentation requirements of Auditing Standard (AS)
No. 7, Engagement Quality Review. AS 7 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. The SEC approved AS 7 on January 15,
2010. In its order approving AS 7, the SEC encouraged the PCAOB to provide further
implementation guidance on the documentation requirements of the standard. The
PCAOB staff believes these Q&As
provide this implementation guidance.
The PCAOB publishes staff Q&As to help auditors
implement, and the PCAOB’s staff administer, the PCAOB’s standards. The views expressed in this staff
guidance are not rules of the PCAOB, nor have they been approved by the PCAOB.
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:
======================
Checklist -- Checklist of
Recent GASB Pronouncements Published
For detail, please contact info@zy-cpa.com
We have published a new
checklist, "Summary Checklist of Recent GASB Standards." This
checklist is intended to serve as a reference tool to review authoritative
standards recently issued by the GASB. This checklist currently reflects
pronouncements with effective dates beginning on or after December 15, 2008,
and will be updated each time the GASB revises its authoritative literature.
See our Literature Update for
complete details.
Single Audits -- New
Edition of Knowledge-Based Single Audits
For detail, please contact info@zy-cpa.com
As discussed above in our
Auditing and Internal Controls Summaries, we have published the 2010 edition of
Knowledge-Based Single Audits. This publication is designed to help the
auditor efficiently and effectively perform the compliance audit portion of the
single audit in accordance with auditing standards generally accepted in the
U.S. (GAAS), Government Auditing Standards (GAGAS), and the audit requirements
of U.S. Office of Management and Budget Circular A-133. This edition includes
revisions and updates to reflect current authoritative literature and, among
other things: (a) SAS No. 117, Compliance Audits; and (b)
relevant rules and requires resulting from the American Recovery and
Reinvestment Act of 2009.
See our Literature Update for
complete details.
Financial Instruments --
GASB Proposal Discussed
For detail, please contact info@zy-cpa.com
We have published a
Governmental GAAP Update that discusses the GASB's
exposure draft of a proposed GASB Statement, Financial Instruments Omnibus.
This proposal would revise existing standards regarding financial reporting and
disclosure requirements of certain financial instruments and external
investment pools for which significant issues have been identified in practice.
Topics covered in this Update are:
-Unallocated insurance
contracts;
-2a7-like external investment
pools;
-Interest rate risk
disclosures for mutual funds;
-Contracts that include
nonperformance penalties;
-Certain financial guarantee contracts;
-Revenue-based contracts;
-Hybrid instruments:
investor's initial rate of return; and
-Effective date and
transition.
If approved, the provisions
in the GASB's proposal would be effective for
financial statements for periods beginning after June 15, 2010, with earlier
application encouraged.
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