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Accounting Research
Manager(TM)
Weekly Summary of
Developments
April 26-30, 2010
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Accounting Research
Manager subscriber,
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database now contains this week's weekly summary of developments. Click the
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of this week's Weekly Summary.
Accounting and SEC
Headlines
Receivables -- FASB Issues Guidance on the Effect of
a Loan Modification
Revenue Recognition -- FASB Issues Guidance on Milestone
Method of Revenue Recognition
Casinos -- FASB Issues Guidance on Casino Jackpot
Liabilities
New Accounting Standards -- Checklist Updated
Credit Losses -- FASB Discusses Disclosures About
Credit Quality and Other Matters
Benefit Plans -- IASB Publishes Proposed Amendments to
IAS 19
International Accounting -- IASB Publishes Agenda for May 6-7,
2010 IFRIC Meeting
Auditing and Internal
Controls Headlines
Compilation and Review
Engagements -- AICPA
Publishes New Guide
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ACCOUNTING AND SEC HEADLINES:
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Receivables -- FASB Issues
Guidance on the Effect of a Loan Modification
For detail, please contact info@zy-cpa.com
The FASB issued Accounting
Standards Update (ASU) No. 2010-18, Receivables (Topic 310): Effect of a
Loan Modification When the Loan Is Part of a Pool That Is Accounted for as a
Single Asset. This ASU codifies the consensus reached in 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.” The amendments to the FASB Accounting
Standards Codification™ (Codification) provide that modifications of loans
that are accounted for within a pool under Subtopic 310-30 do not result in the
removal of those loans from the pool even if the modification of those loans
would otherwise be considered a troubled debt restructuring. An entity will
continue to be required to consider whether the pool of assets in which the
loan is included is impaired if expected cash flows for the pool change. ASU
2010-18 does not affect the accounting for loans under the scope of Subtopic
310-30 that are not accounted for within pools. Loans accounted for
individually under Subtopic 310-30 continue to be subject to the troubled debt
restructuring accounting provisions within Subtopic 310-40.
ASU 2010-18 is effective
prospectively for modifications of loans accounted for within pools under
Subtopic 310-30 occurring in the first interim or annual period ending on or
after July 15, 2010. Early application is permitted. Upon initial adoption of
ASU 2010-18, an entity may make a one-time election to terminate accounting for
loans as a pool under Subtopic 310-30. This election may be applied on a
pool-by-pool basis and does not preclude an entity from applying pool
accounting to subsequent acquisitions of loans with credit deterioration.
Revenue Recognition --
FASB Issues Guidance on Milestone Method of Revenue Recognition
For detail, please contact info@zy-cpa.com
The FASB issued ASU No.
2010-17, Revenue Recognition - Milestone Method (Topic 605): Milestone
Method of Revenue Recognition. This ASU codifies the consensus reached in
EITF Issue No. 08-9, “Milestone Method of Revenue Recognition.” The amendments
to the Codification provide guidance on defining a milestone and determining
when it may be appropriate to apply the milestone method of revenue recognition
for research or development transactions. Consideration that is contingent on
achievement of a milestone in its entirety may be recognized as revenue in the
period in which the milestone is achieved only if the milestone is judged to
meet certain criteria to be considered substantive. Milestones should be
considered substantive in their entirety and may not be bifurcated. An
arrangement may contain both substantive and nonsubstantive
milestones, and each milestone should be evaluated individually to determine if
it is substantive.
ASU 2010-17 is effective on a
prospective basis for milestones achieved in fiscal years, and interim periods
within those years, beginning on or after June 15, 2010. Early adoption is
permitted. If a vendor elects early adoption and the period of adoption is not
the beginning of the entity’s fiscal year, the entity should apply 2010-17
retrospectively from the beginning of the year of adoption. Vendors may also
elect to adopt the amendments in this ASU retrospectively for all prior
periods.
Casinos -- FASB Issues
Guidance on Casino Jackpot Liabilities
For detail, please contact info@zy-cpa.com
The FASB issued ASU No.
2010-16, Entertainment - Casinos (Topic 924): Accruals for Casino Jackpot Liabilities.
This ASU codifies the consensus reached in EITF Issue No. 09-F, "Casino
Base Jackpot Liabilities." This ASU amends the Codification to clarify
that an entity should not accrue jackpot liabilities, or portions thereof,
before a jackpot is won if the entity can avoid paying the jackpot. Jackpots
should be accrued and charged to revenue when an entity has the obligation to
pay the jackpot. The guidance in this ASU applies to both base and progressive
jackpots.
ASU 2010-16 is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2010. ASU 2010-16 should be applied by recording a
cumulative-effect adjustment to opening retained earnings in the period of
adoption.
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 Nos. 2010-16, 2010-17, and 2010-18 (see our discussion above
regarding these ASUs).
See our Literature Update for
complete details.
Credit Losses -- FASB
Discusses Disclosures About Credit Quality and Other
Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on April 28,
2010, and discussed the following topics:
-Disclosures about credit
quality and the allowance for credit losses; and
-Accounting for financial
instruments.
The FASB discussed the
following issues regarding its project on disclosures about credit quality and
the allowance for credit losses: (a) modifications; (b) leveraged
leases; and (c) effective date of final guidance. The FASB reached a
number of decisions regarding these issues, including the following:
-To require creditors to
provide a number of disclosures, including qualitative and quantitative
information about troubled debt restructurings and any other significant
modifications where a concession has been made;
-To require only credit
quality disclosures be provided for leveraged leases; and
-To provide a delayed
effective date of the final guidance for nonpublic entities and for all other
entities, the final guidance is expected to be effective for interim and annual
reporting periods ending after December 15, 2010.
The FASB also continued its
discussion on accounting for financial instruments and made the following
decisions:
-To require that an entity
separately present in the statement of financial position amounts included in
accumulated other comprehensive income related to the changes in fair value or
changes in the remeasurement amount for financial
instruments for which those changes are recognized in other comprehensive
income;
-Affirmed its previous
decision that an entity disclose on the face of the statement of comprehensive
income, significant changes in the fair value of a financial liability arising
from changes in the entity’s own credit standing; and
-The comment period for the
proposed ASU to be issued will end on September 30, 2010.
Benefit Plans -- IASB
Publishes Proposed Amendments to IAS 19
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment an exposure draft, Defined Benefit Plans - Proposed
Amendments to IAS 19. This proposal would amend IAS 19, Employee Benefits,
for the accounting for defined benefit plans through which some employers
provide long-term employee benefits, such as pensions and post-employment
medical care. In defined benefit plans, employers bear the risk of increases in
costs and of possible poor investment performance. Specifically, this proposal
would require entities to:
-Account immediately for all
estimated changes in the cost of providing these benefits and all changes in
the value of plan assets (often referred to as removal of the ‘corridor’
method);
-Use a new presentation
approach that would clearly distinguish between different components of the
cost of these benefits; and
-Disclose clearer information
about the risks arising from defined benefit plans.
Comments on this proposal are
due September 6, 2010.
International Accounting -- IASB Publishes Agenda for May 6-7, 2010 IFRIC
Meeting
For detail, please contact info@zy-cpa.com
The IASB has published an
agenda for the May 6-7, 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;
-IAS 29, Financial
Reporting in Hyperinflationary Economies;
-IFRS 1, First-time
Adoption of International Financial Reporting Standards;
-IFRS 2, Share-Based
Payment;
-IFRS 3, Business
Combinations; and
-Review of tentative agenda
decisions published in the March 2010 IFRIC update.
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:
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AUDITING AND INTERNAL
CONTROLS HEADLINES:
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Compilation and Review
Engagements -- AICPA Publishes New Guide
For detail, please contact info@zy-cpa.com
The AICPA has published Compilation
and Review Engagements. This publication provides guidance for accountants
performing compilation and review engagements, including considerations related
to Statement on Standards for Accounting and Review Services (SSARS) No. 19, Compilation
and Review Engagements. Specifically, this guide provides information on
implementing SSARS 19, including:
-Illustrative engagement and
representation letters;
-Sample compilation and
review reports;
-Detailed illustrations
(including illustrative client inquiries);
-Case studies; and
-Questions and answers
regarding early implementation of the provision in SSARS 19 on compilation
reporting and certain independence impairments.
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