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Accounting Research
Manager(TM)
Weekly Summary of
Developments
July 26-30, 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:
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
EITF Meeting Results -- Decisions Reached
FASB Codification -- Publication Issued on Researching and
Applying GAAP Post-Codification
Securities Act Rules -- SEC Staff Issues Updated
Interpretation on Securities Act Rules
SEC Initiatives -- SEC Chairman Discusses Initiatives under
New Financial Reform Legislation
Risk Alert -- AICPA Issues Audit Risk Alert on
Governmental Accounting Standards and Circular A-133
Repurchase Agreements -- Project Added to FASB Agenda
Leases -- FASB Discusses Leases
Auditing and Internal
Controls Headlines
Comfort Letters -- AICPA Issues Proposal on Letters for
Underwriters and Certain Other Requesting Parties
FASB Codification -- Publication Issued on Researching and
Applying GAAP Post-Codification
Risk Alert -- AICPA Issues Audit Risk Alert on Governmental
Accounting Standards and Circular A-133
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ACCOUNTING AND SEC HEADLINES:
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EITF Meeting Results --
Decisions Reached
For detail, please contact info@zy-cpa.com
As described in detail in our
"EITF Flash Report," the Emerging Issues Task Force (EITF) discussed
the following issues at its July 29, 2010 meeting:
-EITF Issue No. 09-G,
"Accounting for Costs Associated with Acquiring or Renewing Insurance
Contracts";
-EITF Issue No. 09-H,
"Health Care Entities: Revenue Recognition";
-EITF Issue No. 09-K,
"Health Care Entities: Presentation of Insurance Claims and Related
Insurance Recoveries";
-EITF Issue No. 09-L,
"Health Care Entities: Measuring Charity Care for Disclosure";
-EITF Issue No. 10-A,
"How the Carrying Amount of a Reporting Unit Should be Calculated When
Performing Step 1 of the Goodwill Impairment Test";
-EITF Issue No. 10-B,
"Accounting for Multiple Foreign Currency Exchange Rates";
-EITF Issue No. 10-C, "Reporting
of Participant Loans in Employee Benefit Plan Financial Statements"; and
-EITF Issue No. 10-D,
"Accounting for Certain Fees Associated with Recently Enacted Health Care
Legislation."
The EITF reached a final
consensus on Issues 09-G and 09-L. In addition, the EITF reached a final
consensus on gross vs. net presentation on insurance claims and recoveries
guidance in Issue 09-K, but did not reach a final consensus on the guidance for
legal costs which is expected to be discussed at a future meeting. The EITF
also reached consensuses-for-exposure on Issues 10-C and 10-D. The FASB must
still ratify these decisions. The EITF did not reach any final views on Issues
09-H, 10-A and 10-B.
See our EITF Flash Report for
complete details.
FASB Codification --
Publication Issued on Researching and Applying GAAP Post-Codification
For detail, please contact info@zy-cpa.com
We have published an in-depth
examination of how the process of researching and applying
-How the FASB currently
establishes GAAP and updates the Codification;
-How ARM reflects the
Codification; and
-How users can maximize the
usefulness of the ARM database.
See our Literature Update for
complete details.
Securities Act Rules --
SEC Staff Issues Updated Interpretation on Securities Act Rules
For detail, please contact info@zy-cpa.com
The staff in the Division of
Corporation Finance (Corp Fin) of the SEC has issued updates to its Compliance
and Disclosure Interpretation (C&DI), Securities Act Rules. This
C&DI provides interpretations by Corp Fin, in a question and answer format,
of rules adopted under the Securities Act of 1933 (Securities Act).
This update to the C&DI
includes the following new questions:
-179.01;
-198.08;
-233.04-233.08; and
-255.47.
New questions 179.01 and
255.47 address the “value of the primary residence” for purposes of calculating
an investor’s net worth when determining whether a person is an “accredited
investor” as defined in the SEC rules. The new questions were developed in Corp
Fin as its staff begins to address issues resulting from the “Dodd-Frank Wall
Street Reform and Consumer Protection Act” (Wall Street Reform Act) that was
enacted in the United States on July 21, 2010.
The remaining new questions
indicated above cover various consent requirements for including credit ratings
in a registration statement for companies not subject to the Regulation AB
disclosure requirements. Under the Wall Street Reform Act, credit rating
agencies are now subject to “expert liability” with the nullification of Rule
436(g) which provided an exemption for credit ratings in registration
statements.
The staff of ARM previously
prepared a Hot Topic on the Wall Street Reform Act:
For detail, please contact info@zy-cpa.com
SEC Initiatives -- SEC
Chairman Discusses Initiatives under New Financial Reform Legislation
For detail, please contact info@zy-cpa.com
SEC Chairman Mary L. Schapiro discussed provisions within the Wall Street Reform
Act that requires the SEC to undertake various initiatives, including
rulemaking and studies touching on many areas of financial regulation. Topics
discussed by Ms. Schapiro included:
-Corporate disclosure and
shareholder rights;
-Regulation of
over-the-counter derivatives;
-Credit rating agencies; and
-Various broker-dealer and
investment advisor provisions.
Proposals including
initiatives under the Wall Street Reform Act will be available on ARM when
issued and made available by the SEC.
Risk Alert -- AICPA Issues
Audit Risk Alert on Governmental Accounting Standards and Circular A-133
For detail, please contact info@zy-cpa.com
The AICPA has issued the 2010
Audit Risk Alert, Government Auditing Standards and Circular A-133
Developments. This Alert provides users with a detailed overview of recent
industry, technical, regulatory, or professional developments. Topics covered
in this Alert include: (a)legislative and regulatory activities; (b)economic
and industry developments or trends; (c)recent auditing and attestation
pronouncements and related guidance; (d)recent AICPA independence and
ethics pronouncements; and (e)future or emerging issues to monitor. In
addition, this Alert includes a "Resource Central" section listing
resources practitioners may find useful.
Repurchase Agreements --
Project Added to FASB Agenda
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on July 28,
2010, and discussed: (a) agenda decision: derecognition—limited scope amendments to Topic 860, Transfers and
Servicing; and (b) insurance contracts. The FASB chairman announced
that a limited scope project has been added to the FASB’s
agenda to improve the accounting for repurchase agreements or other agreements
that both entitle and obligate the transferor to repurchase or redeem financial
assets before their maturity. Although this is not a joint project with the
IASB, the FASB is expected to consider how the proposed improvements are
similar to or different from IFRS.
Leases -- FASB Discusses
Leases
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on July 22,
2010, and discussed application guidance on when to use the performance
obligation or derecognition approach to lessor accounting. The Board did not reach any decisions at
this meeting.
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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Comfort Letters -- AICPA
Issues Proposal on Letters for Underwriters and Certain Other Requesting
Parties
For detail, please contact info@zy-cpa.com
The AICPA has issued for
public comment an exposure draft of a proposed Statement on Auditing Standards (SAS),
Letters for Underwriters and Certain Other Requesting Parties. This
proposed SAS represents the redrafting of SAS No. 72, Letters for
Underwriters and Certain Other Requesting Parties, to apply the AICPA's clarity drafting conventions as part of its Clarity
Project. Among the most significant changes in this proposed SAS are:
-Requesting parties with a
statutory due diligence defense under Section 11 of the Securities Act are not
required to provide a written legal opinion that states that such party has
such defense;
-To reflect a more
principles-based approach, certain requirements that are duplicative of broader
requirements in SAS 72 have been moved to application and other explanatory
material; and
-Contains an exhibit of
example comfort letters.
As proposed, the guidance in
this SAS would be effective for comfort letters issued on or after December 15,
2012.
Comments on this proposal are
due September 30, 2010.
The AICPA’s
Clarity Project is intended to make existing U.S. generally accepted auditing
standards (GAAS) easier to understand, apply, and move toward converging U.S.
GAAS with International Standards on Auditing issued by the International
Auditing and Assurance Standards Board. For further information on the AICPA's Clarity Project, see our previously published
discussion and analysis in our publication "A Closer Look": For detail, please contact info@zy-cpa.com
FASB Codification --
Publication Issued on Researching and Applying GAAP Post-Codification
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, we have published an in-depth examination of how
the process of researching and applying U.S. generally accepted accounting
principles (GAAP) changed after the effective date of the Codification, and how
ARM can assist users in these tasks. Topics discussed in this edition of
"A Closer Look" include:
-How the FASB currently
establishes GAAP and updates the Codification;
-How ARM reflects the
Codification; and
-How users can maximize the
usefulness of the ARM database.
See our Literature Update for
complete details.
Risk Alert -- AICPA Issues
Audit Risk Alert on Governmental Accounting Standards and Circular A-133
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, the AICPA has issued the 2010 Audit Risk Alert, Government
Auditing Standards and Circular A-133 Developments. This Alert provides
users with a detailed overview of recent industry, technical, regulatory, or
professional developments. Topics covered in this Alert include: (a)legislative
and regulatory activities; (b)economic and industry developments or
trends; (c)recent auditing and attestation pronouncements and related
guidance; (d)recent AICPA independence and ethics pronouncements; and (e)future
or emerging issues to monitor. In addition, this Alert includes a
"Resource Central" section listing resources practitioners may find
useful.
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