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Accounting Research
Manager(TM)
Weekly Summary of
Developments
August 23-27, 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
Proxy Rules -- SEC Adopts Changes to Proxy Rules for
Shareholder Director Nominations
Health Care Entities -- FASB Issues Guidance on Measuring
Charity Care for Disclosure
New Accounting Standards -- Checklist Updated
Health Care Entities -- FASB Issues Proposal on Accounting for
Legal Costs Associated with Medical Malpractice
Other Expenses -- FASB Issues Proposal on Fees Paid to
the Federal Government by Pharmaceutical Manufacturers
Troubled Debt
Restructuring -- FASB
Discusses Troubled Debt Restructuring
EITF Materials -- FASB Issues Materials for September
16, 2010 EITF Meeting
IFRS for SMEs --
IFRS Foundation Appointment and Other Matters Discussed
IFRS Adoption -- IASB Issues Proposal to Amend IFRS 1
Stripping Costs -- Draft Interpretation Published on Stripping
Costs in the Production Phase of a Surface Mine
International Accounting -- IASB Publishes Agenda for September
2-3, 2010 IFRS Interpretations Committee Meeting
Auditing and Internal
Controls Headlines
Government Auditing
Standards -- GAO Publishes
Exposure Draft of Revised Yellow Book
Audit Considerations
Relating to an Entity Using a Service Organization -- Discussion and Analysis of Statement on Auditing
Standards
Government Headlines
Government Auditing
Standards -- GAO
Publishes Exposure Draft of Revised Yellow Book
Derivative Instruments -- GASB 53 Discussed
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ACCOUNTING AND SEC HEADLINES:
=============================
Proxy Rules -- SEC Adopts
Changes to Proxy Rules for Shareholder Director Nominations
For detail, please contact info@zy-cpa.com
The SEC has issued a final
rule, Facilitating Shareholder Director Nominations. This rule includes
changes to the federal proxy rules to facilitate shareholder access to a
company's proxy materials to include nominees to the corporate board of
directors. Among other things, this new rule:
-Provides "proxy
access" to a shareholder, or group of shareholders, who own - and have
owned continually for at least the prior 3 years - at least 3% of the company's
voting stock, as defined;
-Restricts the application of
the new requirements in cases where relevant state or foreign law does not
prohibit shareholders from nominating directors;
-Requires specified
disclosures concerning nominating shareholders or groups and their nominees;
-Requires that companies
include in their proxy materials, under certain circumstances, shareholder
proposals that seek to establish a procedure in the company’s governing
documents for the inclusion of one or more shareholder director nominees in the
company’s proxy materials; and
-Includes related changes to
certain other rules and regulations, including the existing solicitation
exemptions from the proxy rules and the beneficial ownership reporting requirements.
The rule is effective 60 days
after publication in the Federal Register.
Health Care Entities --
FASB Issues Guidance on Measuring Charity Care for Disclosure
For detail, please contact info@zy-cpa.com
The FASB has issued
Accounting Standards Update (ASU) No. 2010-23, Health Care Entities (Topic
954): Measuring Charity Care for Disclosure. ASU 2010-23 is intended to
reduce the diversity in practice regarding the measurement basis used in the
disclosure of charity care. ASU 2010-23 requires that cost be used as the
measurement basis for charity care disclosure purposes and that cost be
identified as the direct and indirect costs of providing the charity care. As a
result of the amendments in this ASU, various techniques will likely be used to
determine how the direct and indirect costs are identified, such as obtaining
the information directly from a costing system or through reasonable estimation
techniques. Therefore, ASU 2010-23 also requires disclosure of the method used
to identify or determine such costs.
This ASU is effective for
fiscal years beginning after December 15, 2010 and should be applied
retrospectively to all prior periods presented. Early application is permitted.
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 FASB
Accounting Standards CodificationTM (Codification)
paragraph(s). Effective dates and application (adoption) requirements are also
presented.
We have updated our checklist
to reflect ASU 2010-23, discussed above.
See our Literature Update for
complete details.
Health Care Entities --
FASB Issues Proposal on Accounting for Legal Costs Associated with Medical
Malpractice
For detail, please contact info@zy-cpa.com
The FASB has issued for
public comment a proposed ASU, Health Care Entities (Topic 954): Accounting
for Legal Costs Associated with Medical Malpractice and Similar Claims.
This proposed ASU represents a consensus-for-exposure on EITF Issue No. 10-F,
“Accounting for Legal Costs Associated with Medical Malpractice Claims.” The
amendments to the Codification in the proposed ASU would allow health care
entities to make a policy election to expense legal fees as incurred or accrue
estimated legal fees when the associated claim is incurred.
The effective date will be
determined after the EITF considers feedback on the proposed ASU. The
amendments in the proposed ASU would be applied retrospectively to all prior
periods presented.
Comments on this proposed ASU
are due October 8, 2010.
Other Expenses -- FASB
Issues Proposal on Fees Paid to the Federal Government by Pharmaceutical
Manufacturers
For detail, please contact info@zy-cpa.com
The FASB has issued for
public comment a proposed ASU, Other Expenses (Topic 720): Fees Paid to the
Federal Government by Pharmaceutical Manufacturers. This proposed ASU
represents a consensus-for-exposure on EITF Issue No. 10-D, “Accounting for
Certain Fees Associated with Recently Enacted Health Care Legislation.” The
Patient Protection and Affordable Care Act, as amended by the Health Care and
Education Reconciliation Act of 2010, imposes an
annual fee on the pharmaceutical manufacturing industry for each calendar year
beginning on or after January 1, 2011. An entity’s portion of the annual fee is
payable no later than September 30 of the applicable calendar year and is not
tax deductible.
An entity’s portion of the
annual fee becomes payable to the U.S. Treasury once a pharmaceutical
manufacturing entity has a gross receipt from branded prescription drug sales
to any specified government program or in accordance with coverage under any
government program for each calendar year beginning on or after January 1,
2011. The amendments to the Codification in this proposed ASU specify that upon
recognition of the liability, the annual fee would be: (a) recognized
over the calendar year that it is payable using a straight-line method of allocation
unless another method better allocates the fee over the calendar year that it
is payable; and (b) presented as operating expenses.
The amendments in the
proposed ASU would be effective for calendar years beginning after December 31,
2010, when the fee initially becomes effective.
Comments on this proposed ASU
are due October 8, 2010.
Troubled Debt
Restructuring -- FASB Discusses Troubled Debt Restructuring
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on August 25,
2010, and discussed troubled debt restructuring. Specifically, the FASB
discussed potential clarifications to the guidance in Codification Subtopic
310-40, Troubled Debt Restructurings by Creditors, and made a number of
tentative decisions, including that:
-Creditors should be
explicitly precluded from using the borrower’s effective rate test (in
Codification Topic 470, Debt) in their evaluation of whether a
modification was executed at a market rate;
-Guidance should be clarified
to note that: (a) a situation in which a market rate is not readily
available is a strong indication that the modification was executed at a rate
that is below market; and (b) a modification that results in a temporary
or permanent increase to the contractual interest rate cannot be presumed to be
at a rate that is at or above market;
-Guidance should be clarified
to note that a borrower that is not currently in default may still be
considered to be experiencing financial difficulty; and
-A creditor should not
conclude that a modification is not a troubled debt restructuring simply
because a delay in payment resulting from that modification is insignificant.
The FASB also discussed
transition guidance and tentatively decided that:
-For disclosure purposes, the
proposed clarifications will be effective for interim and annual periods ending
after June 15, 2011, applied retrospectively to modifications occurring on or
after the beginning of the earliest period presented.
-For impairment purposes, the
proposed clarifications will be effective on a prospective basis for interim
and annual periods ending after June 15, 2011. An entity should disclose the
total amount of loans and the associated reserves related to those loans that
are considered impaired under Codification Section 310-10-35, Subsequent
Measurement, as a result of the clarifications in guidance for which
impairment was previously accounted for under Codification Subtopic 450-20, Loss
Contingencies.
The FASB directed its staff
to draft a proposed ASU and tentatively decided that it will have a 60-day
comment period.
EITF Materials -- FASB
Issues Materials for September 16, 2010 EITF Meeting
For detail, please contact info@zy-cpa.com
The FASB has issued the
following materials for the September 16, 2010 EITF meeting:
-Agenda committee report; and
-EITF Issue No. 09-G,
"Accounting for Costs Associated with Acquiring or Renewing Insurance
Contracts" (comment letters).
IFRS for SMEs -- IFRS Foundation Appointment and Other Matters
Discussed
For detail, please contact info@zy-cpa.com
The IASB staff has issued
"IFRS for SMEs Update" publication which is
a staff summary of news relating to the International Financial Reporting
Standard for Small and Medium-Sized Entities (IFRS for SMEs).
This update includes discussion of the following topics:
-IFRS Foundation appoints
members of the SME Implementation Group;
-Train the trainers
workshop in
-Where to obtain IFRS for SMEs materials.
IFRS Adoption -- IASB
Issues Proposal to Amend IFRS 1
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment an Exposure Draft (ED), Removal of Fixed Dates for First-Time
Adopters-Proposed amendments to IFRS 1. This ED would amend IFRS 1, First-time
Adoption of International Financial Reporting Standards,by
replacing references to a fixed transition date of January 1, 2004, with a
general reference to the date of transition to IFRSs.
As a result, entities adopting IFRSs for the first
time would not have to restate derecognition transactions
that occurred before the date of transition to IFRSs.
In addition, first-time adopters would also not have to recalculate "day
1" differences on initial recognition of financial instruments, where the
transaction occurred before the date of transition to IFRSs.
Comments on this proposal are
due October 27, 2010.
Stripping Costs -- Draft
Interpretation Published on Stripping Costs in the Production Phase of a Surface Mine
For detail, please contact info@zy-cpa.com
The IFRS Interpretations
Committee has issued for public comment a draft Interpretation, Stripping
Costs in the Production Phase of a Surface Mine. This draft interpretation
includes proposed guidance on the accounting for stripping costs in the
production phase of a surface mine. The draft interpretation proposes that
costs associated with a "stripping campaign" should be accounted for
as an additional component of an existing asset, and that this component should
be written down over the reserves that directly benefit from the campaign. This
draft interpretation seeks public comment on this accounting treatment and
other related areas, including:
-Allocation of accumulated
costs to the specific section of the ore body;
-Disclosures; and
-Transition.
Comments on this draft
interpretation are due November 30, 2010.
International Accounting
-- IASB Publishes Agenda for September 2-3, 2010 IFRS Interpretations Committee
Meeting
For detail, please contact info@zy-cpa.com
The IASB has published an
agenda for the September 2-3, 2010 meeting of the IFRS Interpretations
Committee. Topics expected to be discussed at this meeting include the
following:
-IFRS 2, Share-based
Payment;
-IAS 1, Presentation of
Financial Statements;
-IAS 19, Employee
Benefits;
-IAS 24, Related Party
Disclosures;
-IAS 27, Consolidated and
Separate Financial Statements;
-IAS 36, Impairment of
Assets; and
-Review of tentative agenda
decisions published in July 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:
For detail, please contact info@zy-cpa.com
=======================================
AUDITING AND INTERNAL
CONTROLS HEADLINES:
=======================================
Government Auditing
Standards -- GAO Publishes Exposure Draft of Revised Yellow Book
For detail, please contact info@zy-cpa.com
The Government Accountability
Office (GAO) is requesting comments on proposed changes to Government Auditing
Standards (GAGAS) with its issuance of Government Auditing Standards, 2010
Exposure Draft. The proposed revision to GAGAS, commonly known as the
“Yellow Book,” will be the sixth since the GAO first issued the standards in
1972. The proposed changes contained in the 2010 Exposure Draft update the
Yellow Book to reflect major developments in the audit profession and emphasize
specific considerations applicable to the government environment.
Comments on the proposed
revisions are due November 22, 2010.
Audit Considerations Relating to an Entity Using a Service Organization --
Discussion and Analysis of Statement on Auditing Standards
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that provides discussion and analysis of clarified Statement on
Auditing Standards (SAS), Audit Considerations Relating
to an Entity Using a Service Organization. The clarified SAS will supersede
the requirements and guidance for user auditors in SAS 70 (AU Section 324), Service
Organizations, and addresses the user auditor’s responsibility for
obtaining sufficient appropriate audit evidence in an audit of the financial
statements of a user entity that uses one or more service organizations. The
SAS has been redrafted to apply the AICPA's clarity
drafting conventions as part of its Clarity Project.
The clarified SAS is
effective for audits of financial statements for periods ending on or after
December 15, 2012.
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."
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:
======================
Government Auditing
Standards -- GAO Publishes Exposure Draft of Revised Yellow Book
For detail, please contact info@zy-cpa.com
As discussed above in our
Auditing and Internal Controls Summaries, the Government Accountability Office
(GAO) is requesting comments on proposed changes to Government Auditing
Standards (GAGAS) with its issuance of Government Auditing Standards, 2010
Exposure Draft. The proposed revision to GAGAS, commonly known as the
“Yellow Book,” will be the sixth since the GAO first issued the standards in
1972. The proposed changes contained in the 2010 Exposure Draft update the
Yellow Book to reflect major developments in the audit profession and emphasize
specific considerations applicable to the government environment.
Comments on the proposed
revisions are due November 22, 2010.
Derivative Instruments --
GASB 53 Discussed
For detail, please contact info@zy-cpa.com
We have added a Governmental
GAAP Update Service that discusses the requirements of GASB Statement No. 53, Accounting
and Financial Reporting for Derivative Instruments. GASB 53 provides the
definition of a derivative and addresses measurement, reporting, and disclosure
requirements for derivative instruments and transactions entered into by state
and local governments. The objective is to enhance the usefulness and
comparability of derivative instrument information in the financial statements
of state and local governments. This update focuses on investment derivative
transactions and includes discussion of footnote disclosure of investment
derivatives (including an example disclosure).
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