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Accounting Research Manager(TM)
Weekly Summary of Developments
April 4-8, 2011
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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@hkcmcpa.us
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
Private Company GAAP -- FAF Blue-Ribbon Panel Report
Discussed
Troubled Debt Restructuring
-- ASU 2011-02
Issued
New Accounting Standards -- Checklist Updated
Financial Reporting Manual -- SEC Staff Updates Financial
Reporting Manual
Compensation -- SEC Staff Publishes Small Entity Compensation
Guide
Financial Crisis -- SEC Chief Accountant and PCAOB
Chairman Testify Before Senate
Financial Instruments -- FASB Discusses Financial
Instruments
IFRS for SMEs -- Additional Country Specific Training Materials and Other Matters
Discussed
Auditing and Internal
Controls Headlines
Private Company GAAP -- FAF Blue-Ribbon Panel Report
Discussed
Ethics -- AICPA Issues Proposal on
Professional Ethics
Consideration of Fraud -- Clarified SAS Discussed
Financial Crisis -- SEC Chief Accountant and PCAOB
Chairman Testify Before Senate
Government Headlines
Government Entities -- New Edition of Knowledge-Based
Audits of Governmental Entities Published
GASB Report Issued -- GASB Research Brief and Other
Matters Discussed
Financial Instruments -- GASB Supplement to Comprehensive
Implementation Guide Published
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ACCOUNTING AND SEC HEADLINES:
=============================
Private Company GAAP -- FAF
Blue-Ribbon Panel Report Discussed
For detail, please contact info@hkcmcpa.us
We have prepared and published
another edition of “A Closer Look.” In this edition, a discussion is provided
on the “Report to the Board of Trustees of the Financial Accounting Foundation”
(Report) issued on January 26, 2011, by the Blue-Ribbon Panel on Standard
Setting for Private Companies (Blue-Ribbon Panel).
The Blue-Ribbon Panel was
formed in December 2009 “to address how accounting standards can best meet the
needs of users of
On March 4, 2011, the Trustees
of the FAF announced the creation of a Trustee Working Group to address issues
associated with standard setting for nonpublic companies. The formation of the
Trustee Working Group comes in response to the Report. In this edition of “A
Closer Look,” we explore other issues related to the Report as well as the
likely direction of the Trustee Working Group.
See our Literature Update for
complete details.
Troubled Debt Restructuring
-- ASU 2011-02 Issued
For detail, please contact info@hkcmcpa.us
The FASB has issued Accounting
Standards Update (ASU) No. 2011-02, Receivables (Topic 310): A Creditor’s
Determination of Whether a Restructuring Is a Troubled Debt Restructuring.
The FASB believes the guidance in this ASU will improve financial reporting by
creating greater consistency in the way GAAP is applied for various types of
debt restructurings.
The ASU clarifies which loan
modifications constitute troubled debt restructurings. It is intended to assist
creditors in determining whether a modification of the terms of a receivable
meets the criteria to be considered a troubled debt restructuring, both for
purposes of recording an impairment loss and for disclosure of troubled debt
restructurings.
In evaluating whether a
restructuring constitutes a troubled debt restructuring, a creditor must
separately conclude that both of the following exist: (a) the
restructuring constitutes a concession; and (b) the debtor is
experiencing financial difficulties. The amendments to FASB Accounting
Standards Codification™ (Codification) Topic 310, Receivables,
clarify the guidance on a creditor’s evaluation of whether it has granted a
concession and whether a debtor is experiencing financial difficulties.
For public companies, the new
guidance is effective for interim and annual periods beginning on or after June
15, 2011, and applies retrospectively to restructurings occurring on or after
the beginning of the fiscal year of adoption. For nonpublic entities, the
amendments to the Codification in the ASU are effective for annual periods
ending on or after December 15, 2012, including interim periods within those
annual periods. Early application is permitted.
New Accounting Standards --
Checklist Updated
For detail, please contact info@hkcmcpa.us
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 checklist is updated shortly after the FASB
adds or revises content in the Codification. 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 the issuance of ASU No. 2011-02, discussed above.
See our Literature Update for
complete details.
Financial Reporting Manual
-- SEC Staff Updates Financial Reporting Manual
For detail, please contact info@hkcmcpa.us
The staff in the Division of
Corporation Finance (Corp Fin) of the SEC has released the updated Financial
Reporting Manual, reflecting changes through December 31, 2010. This manual
represents informal guidance prepared for use by the Corp Fin staff. Corp Fin
has made this manual public because readers may find the guidance useful in
preparing filings with the SEC. We have prepared a Literature Update
highlighting areas in the manual updated by the Corp Fin staff. In addition, as
described in our Literature Update, we are making available in PDF format, the
prior quarterly versions of Corp Fin’s Financial Reporting Manual, dating back
to December 2008 when the first edition of this manual was released. That
edition reflected Corp Fin staff views through September 30, 2008.
See our Literature Update for
complete details.
Compensation -- SEC Staff
Publishes Small Entity Compensation Guide
For detail, please contact info@hkcmcpa.us
The staff of the SEC has
published Shareholder Approval of Executive Compensation and Golden
Parachute Compensation - A Small Entity Compliance Guide. This guide
summarizes and explains amendments adopted by the SEC to its disclosure rules
and forms to implement Section 951 of the "Dodd-Frank Wall Street Reform
and Consumer Protection Act." This guide discusses the following topics:
-Summary of the new
shareholder say-on-pay and frequency votes;
-Effective date of the new
requirements;
-New rules on golden parachute
compensation;
-Disclosure of preliminary
shareholder vote results; and
-Other resources.
Financial Crisis -- SEC
Chief Accountant and PCAOB Chairman Testify Before Senate
James L. Kroeker,
Chief Accountant of the SEC, and James R. Doty, Chairman of the PCAOB,
testified concerning the role of the accounting profession in preventing
another financial crisis. In prepared testimony before a hearing of a U.S.
Senate subcommittee, Mr. Kroeker and Mr. Doty
highlighted significant problems in accounting and auditing before the
financial crisis and important lessons learned since. Mr. Kroeker’s
testimony included discussion of the following topics:
For detail, please contact info@hkcmcpa.us
-Importance of reliable
financial reporting;
-International auditing
considerations;
-Role of the auditor and
improvements in audits; and
-Continuing improvements to
accounting standards.
Mr. Doty’s testimony focused
on the auditor’s role in preventing another financial crisis and included
discussion of the following topics:
For detail, please contact info@hkcmcpa.us
-Responsibilities of the
PCAOB;
-Auditor performance before
and during the financial crisis;
-PCAOB access to non-U.S.
registered firms;
-PCAOB investigations and
enforcement;
-Auditing standards; and
-Policy changes for Congress
to consider.
Financial Instruments --
FASB Discusses Financial Instruments
For detail, please contact info@hkcmcpa.us
As reported in its
"Summary of Board Decisions" publication, the FASB met on April 6,
2011, and discussed financial instruments. Specifically, the FASB discussed
refinements to the business strategy criterion for classifying and measuring
financial instruments. The FASB decided that an entity should classify
financial instruments based on the business activity the entity uses to manage
those financial instruments rather than on the entity’s intent for an
individual financial instrument. An entity would not be prevented from managing
the same or similar financial instruments through different business activities.
The FASB decided to require that an entity classify all financial instruments
into one of the three classification and measurement categories developed:
-Amortized Cost category;
-FV-OCI (Fair Value–Other
Comprehensive Income) category; and
-FV-NI (Fair Value–Net Income)
category.
IFRS for SMEs -- Additional Country Specific Training Materials and
Other Matters Discussed
For detail, please contact info@hkcmcpa.us
The IASB staff has issued its
periodic "IFRS for SMEs Update" publication
which is a 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:
-Additional training module
posted;
-Spanish-language translation
and Turkish-language translation of the IFRS for SMEs
training modules;
-Upcoming train the trainers workshops; and
-Where to obtain IFRS for SMEs materials.
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@hkcmcpa.us
=======================================
AUDITING AND INTERNAL CONTROLS
HEADLINES:
=======================================
Private Company GAAP -- FAF
Blue-Ribbon Panel Report Discussed
For detail, please contact info@hkcmcpa.us
As discussed above in our
Accounting and SEC Summaries, we have prepared and published another edition of
“A Closer Look.” In this edition, a discussion is provided on the “Report to
the Board of Trustees of the Financial Accounting Foundation” (Report) issued
on January 26, 2011, by the Blue-Ribbon Panel on Standard Setting for Private
Companies (Blue-Ribbon Panel).
The Blue-Ribbon Panel was
formed in December 2009 “to address how accounting standards can best meet the
needs of users of
On March 4, 2011, the Trustees
of the FAF announced the creation of a Trustee Working Group to address issues
associated with standard setting for nonpublic companies. The formation of the Trustee
Working Group comes in response to the Report. In this edition of “A Closer
Look,” we explore other issues related to the Report as well as the likely
direction of the Trustee Working Group.
See our Literature Update for
complete details.
Ethics -- AICPA Issues
Proposal on Professional Ethics
For detail, please contact info@hkcmcpa.us
The AICPA has issued for
public comment an Exposure Draft (ED), Omnibus Proposal of Professional
Ethics Division Interpretations and Definition. This ED includes proposed
interpretations on the following topics:
-Confidential information
obtained from employment;
-Financial interests; and
-False, misleading, or
deceptive acts in promoting or marketing professional services.
In addition, this ED includes
a proposed new definition of "members in business and industry."
Comments on this proposal are
due June 5, 2011.
Consideration of Fraud --
Clarified SAS Discussed
For detail, please contact info@hkcmcpa.us
We have added a GAAS Update
Service that provides discussion and analysis of a clarified Statement on
Auditing Standards (SAS), Consideration of Fraud in a Financial Statement
Audit (Redrafted), which was finalized as part of the AICPA's
Clarity Project. The clarified SAS will supersede SAS 99 (AU Section 316), Consideration
of Fraud in a Financial Statement Audit, and focuses on the auditor’s
responsibilities for identifying and responding to fraud risks in a financial
statement audit, and contrasts them with management’s responsibility to prevent
and detect fraud.
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": For
detail, please contact info@hkcmcpa.us
Financial Crisis -- SEC
Chief Accountant and PCAOB Chairman Testify Before
Senate
As discussed above in our
Accounting and SEC Summaries, James L. Kroeker, Chief
Accountant of the SEC, and James R. Doty, Chairman of the PCAOB, testified
concerning the role of the accounting profession in preventing another
financial crisis. In prepared testimony before a hearing of a U.S. Senate
subcommittee, Mr. Kroeker and Mr. Doty highlighted
significant problems in accounting and auditing before the financial crisis and
important lessons learned since. Mr. Kroeker’s
testimony included discussion of the following topics:
For detail, please contact info@hkcmcpa.us
-Importance of reliable
financial reporting;
-International auditing
considerations;
-Role of the auditor and
improvements in audits; and
-Continuing improvements to
accounting standards.
Mr. Doty’s testimony focused
on the auditor’s role in preventing another financial crisis and included
discussion of the following topics:
For detail, please contact info@hkcmcpa.us
-Responsibilities of the PCAOB;
-Auditor performance before
and during the financial crisis;
-PCAOB access to non-U.S.
registered firms;
-PCAOB investigations and
enforcement;
-Auditing standards; and
-Policy changes for Congress
to consider.
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@hkcmcpa.us
======================
GOVERNMENT HEADLINES:
======================
Government Entities -- New
Edition of Knowledge-Based Audits of Governmental Entities Published
For detail, please contact info@hkcmcpa.us
We have published the 2011
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
-AICPA Statement on Auditing
Standards (SAS) No. 118, Other Information in Documents Containing Audited
Financial Statements;
-SAS No. 119, Supplementary
Information in Relation to the Financial Statements as a Whole; and
-SAS No. 120, Required
Supplementary Information .
Included is also a discussion
regarding the status of the AICPA's Clarity Project.
See our Literature Update for
complete details.
GASB Report Issued -- GASB
Research Brief and Other Matters Discussed
For detail, please contact info@hkcmcpa.us
The March 2011 edition of the
"GASB Report" has been issued and includes the following discussion
items:
-GASB calendar;
-William W. Holder named dean
of the Leventhal School of Accounting;
-GASB research brief examines
timeliness of state and local financial reporting compared to user needs;
-Summary of recent GASB
meetings;
-Summary of March 3-4, 2011,
Governmental Accounting Standards Advisory Council meeting; and
-Mid-year supplement to the Comprehensive
Implementation Guide available.
Financial Instruments --
GASB Supplement to Comprehensive Implementation Guide Published
For detail, please contact info@hkcmcpa.us
We have added a Governmental
GAAP Update Service that discusses guidance provided in the GASB's
supplement to its 2010-2011 Comprehensive Implementation Guide. This
update discusses guidance provided in this supplement on the following topics:
(a) financial instruments; and (b) derivative instruments,
including various illustrations.
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@hkcmcpa.us