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Accounting Research Manager(TM)
Weekly Summary of
Developments
April 19-23, 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
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of this week's Weekly Summary.
Accounting and SEC
Headlines
Financial Services -- FASB Issues Guidance on Investments
Held Through Separate Accounts
Oil and Gas Activities -- FASB Adds SEC Oil and Gas Accounting
and Reporting Requirements to Codification
Stock Compensation -- FASB Provides Guidance on Awards with
Exercise Prices Denominated in a Foreign Currency
Fair Value Measurements -- Publication Updated
New Accounting Standards -- Checklist Updated
Inflation Rates -- Interpretation Updated on Inflation
Rates for Judging Whether an Economy Is Highly Inflationary
Leases -- FASB and IASB Discuss Leases and Other
Matters
Fair Value Measurement -- FASB and IASB Discuss Fair Value
Measurement and Other Issues
Auditing and Internal
Controls Headlines
Compilations and Reviews -- Additional Discussion and Analysis of
SSARS 19
Government Headlines
Governmental Entities -- New Edition of Knowledge-Based Audits
Published
Financial Reporting Entity -- GASB Proposal Discussed
Financial Reporting Entity -- GASB Proposal and Other Matters
Discussed
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ACCOUNTING AND SEC HEADLINES:
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Financial Services -- FASB
Issues Guidance on Investments Held Through Separate Accounts
For detail, please contact info@zy-cpa.com
The FASB has issued
Accounting Standards Update (ASU) No. 2010-15, Financial Services -
Insurance (Topic 944): How Investments Held through Separate Accounts Affect an
Insurer’s Consolidation Analysis of Those Investments. This ASU codifies
the consensus reached in EITF Issue No. 09-B, "Consideration of an
Insurer's Accounting for Majority-Owned Investments
When the Ownership Is through a Separate Account." The amendments to the FASB
Accounting Standards Codification™ (Codification) included in this ASU
clarify that an insurance entity generally should not consider any separate
account interests held for the benefit of policy holders in an investment to be
the insurer's interests and should not combine those interests with its general
account interest in the same investment when assessing the investment for
consolidation. The general guidance does not apply in instances where the
separate account interests are held for the benefit of a related party policy
holder as defined in the Variable Interest Entities Subsections of Codification
Topic 810, Consolidation, Subtopic 810-10, as those Subsections require
the consideration of related parties.
ASU 2010-15 also amends
Codification Subtopic 944-80 to clarify that for the purpose of evaluating
whether the retention of specialized accounting for investments in
consolidation is appropriate, a separate account arrangement should be
considered a subsidiary. The amendments to the Codification do not require an
insurer to consolidate an investment in which a separate account holds a
controlling financial interest if the investment is not or would not be
consolidated in the standalone financial statements of the separate account.
The amendments also provide guidance on how an insurer should consolidate an
investment fund in situations in which the insurer concludes that consolidation
is required.
ASU 2010-15 is effective for
fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2010. Early adoption is permitted. The amendments are to be
applied retrospectively to all prior periods as of the date of adoption.
Oil and Gas Activities --
FASB Adds SEC Oil and Gas Accounting and Reporting
Requirements to Codification
For detail, please contact info@zy-cpa.com
The FASB has issued ASU No.
2010-14, Accounting for Extractive Activities - Oil & Gas: Amendments to
Paragraph 932-10-S99-1. This ASU adds to the Codification the SEC’s
Regulation S-X Rule 4-10, Financial Accounting and Reporting for Oil and Gas
Producing Activities Pursuant to the Federal Securities Laws and the Energy
Policy and Conservation Act of 1975. This rule was included in the SEC’s
Final Rule, Modernization of Oil and Gas Reporting, which was published
in December 2008 and became effective January 1, 2010.
Stock Compensation -- FASB
Provides Guidance on Awards with Exercise Prices Denominated in a Foreign
Currency
For detail, please contact info@zy-cpa.com
The FASB has issued ASU No.
2010-13, Compensation - Stock Compensation (Topic 718): Effect of
Denominating the Exercise Price of a Share-Based Payment Award in the Currency
of the Market in Which the Underlying Equity Security Trades. This ASU
codifies the consensus reached in 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 Trades." The
amendments to the Codification clarify that an employee share-based payment
award with an exercise price denominated in the currency of a market in which a
substantial portion of the entity’s equity shares trades should not be
considered to contain a condition that is not a market, performance, or service
condition. Therefore, an entity would not classify such an award as a liability
if it otherwise qualifies as equity.
The amendments in this ASU
are effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2010. Earlier adoption is permitted. The
amendments are to be applied by recording a cumulative-effect adjustment to
beginning retained earnings.
Fair Value Measurements --
Publication Updated
For detail, please contact info@zy-cpa.com
We have updated our
publication, Interpretations of Topic 820, Fair Value Measurements and
Disclosures (formerly known as Interpretations of FASB Statement 157).
The most significant changes we made to this publication include:
-Additional guidance provided
on the role of judgment in determining fair value;
-New questions and answers
have been included that address matters such as valuing specific assets and
liabilities, determining active and inactive markets, and selecting appropriate
discount rates; and
-New guidance has been added
covering recent events related to fair value measurements in light of the
global financial crisis.
See our Literature Update for
complete details.
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:
-ASU No. 2010-12, Income
Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health Care
Reform Acts; and
-ASU Nos. 2010-13, 2010-14,
and 2010-15 (see our discussion above regarding these ASUs).
See our Literature Update for
complete details.
Inflation Rates --
Interpretation Updated on Inflation Rates for Judging Whether an Economy Is Highly
Inflationary
For detail, please contact info@zy-cpa.com
Our interpretation, Inflation
Rates for Judging Whether an Economy Is Highly Inflationary - March 2010,
has been issued and reflects the latest available inflation rate information.
Since our December 2009 update,
See our Literature Update for
complete details.
Leases -- FASB and IASB
Discuss Leases and Other Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB and IASB (the
Boards) met on April 20-22, 2010, and discussed the following topics:
-Leases;
-Consolidation;
-Insurance contracts;
-Derecognition;
and
-Financial statement
presentation.
The Boards discussed the
following topics related to their project on leases: (a) accounting for
sale and leaseback transactions; (b) lessor
accounting for the performance obligation, including consideration of
recognizing profit/loss at lease commencement; and (c) accounting for
subleases. The Boards reached a number of tentative decisions regarding these
issues, including the following:
-A sale and leaseback
transaction should be accounted for as a sale and leaseback rather than a
financing if it is determined that the underlying asset has been sold;
-If a sale and leaseback
transaction results in a sale of the underlying asset and both the sale and the
leaseback are established at fair value, gains or losses arising from the
transaction should not be deferred; and
-The amortization of the
performance obligation should be performed in a systematic and rational manner
based on the pattern of use of the underlying asset by the lessee.
The Boards also continued
their deliberations on the definition of an "investment company" and
tentatively decided that an investment company is an entity that meets all of
the following criteria:
-The express business purpose
of an investment company is investing for current income, capital appreciation,
or both;
-The entity has identified
potential exit strategies and a defined time (or range of dates) at which it
expects to exit the investment;
-Substantially all of the
entity’s activities are investment activities carried out for the purposes of
generating current income, capital appreciation, or both;
-Ownership in the entity is
represented by units of investments;
-The funds of the entity’s
owners are pooled to avail owners of professional investment management;
-All of the investments are
managed, and their performance evaluated (both internally and externally), on a
fair value basis;
-The entity must be a
reporting entity; and
-Any providers of debt to the
investees of the entity shall not have direct
recourse to any of the entity’s other investees.
Fair Value Measurement --
FASB and IASB Discuss Fair Value Measurement and Other Issues
For detail, please contact info@zy-cpa.com
As reported in its "IASB
Update" publication, the Boards met on April 8, 2010, and discussed the
following topics:
-Fair value measurement;
-Annual improvements project;
-Derecognition;
and
-Termination benefits:
amendments to IAS 19, Employee Benefits.
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
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AUDITING AND INTERNAL CONTROLS
HEADLINES:
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Compilations and Reviews
-- Additional Discussion and Analysis of SSARS 19
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that provides discussion and analysis of AICPA Statement on Standards
for Accounting and Review Services (SSARS) No. 19, Compilation and Review
Engagements. SSARS 19 supersedes the following AR Sections:
-AR Section 20, Defining
Professional Requirements in Statements on Standards for Accounting and Review
Services;
-AR Section 50, Standards
for Accounting and Review Services; and
-AR Section 100, Compilation
and Review of Financial Statements.
This update is the second in
a two-part series covering SSARS 19, and specifically discusses compilations
and reviews of financial statements. The first part in this series provided
background analysis on SSARS 19 and discussed the framework for performing and
reporting on compilation and review engagements.
SSARS 19 is effective for
compilations and reviews of financial statements for periods ending on or after
December 15, 2010. Early implementation is not permitted, with one exception.
One provision of SSARS 19 may be implemented early, which permits, but does not
require accountants to include optional language in their compilation reports
describing reasons for lack of independence.
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:
======================
Governmental Entities --
New Edition of Knowledge-Based Audits Published
For detail, please contact info@zy-cpa.com
We have published the 2010
edition of Knowledge-Based Audits of Governmental Entities. This
publication is designed to help the auditor efficiently and effectively perform
financial statement audits of state and local governments in accordance with
auditing standards generally accepted in the
See our Literature Update for
complete details.
Financial Reporting Entity
-- GASB Proposal Discussed
For detail, please contact info@zy-cpa.com
We have published a
Governmental GAAP Update Service which discusses the GASB's
exposure draft of a proposed statement, The Financial Reporting Entity,
which is intended to improve GASB Statement No. 14, The Financial Reporting
Entity, and GASB Statement No. 34, Basic Financial Statements - and
Management’s Discussion and Analysis - for State and Local Governments.
This update discusses the following topics:
-Scope and applicability of
the proposal;
-Financial accountability
concept;
-Major component unit
requirements; and
-Criteria for blending
component units.
As proposed, this guidance
would be effective for financial statement periods beginning after June 15,
2012. Early application is encouraged.
Comments on the proposal are
due June 30, 2010.
Financial Reporting Entity
-- GASB Proposal and Other Matters Discussed
For detail, please contact info@zy-cpa.com
The March 2010 edition of the
"GASB Report" has been issued and includes the following discussion
items:
-GASB's
exposure draft of a proposed statement, The Financial Reporting Entity;
-GASB calendar;
-Appointment of member to the
GASB;
-Summary of GASB meeting held
on February 16-18, 2010;
-Overview of GASB performance
measures: technical inquiry activities; and
-GASB seeks participants for
financial reporting entity field test.
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