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Accounting Research Manager®
Weekly Summary of Developments
August 22-26, 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

Income Taxes -- Interpretation Updated
Financial Statement Disclosures -- FASB Discusses Disclosure Framework and Other Matters
Asset-Backed Securities -- SEC Changes Reporting Obligations for Asset-Backed Securities
Broker-Dealers -- SEC Approves PCAOB Rules on Audits of Broker-Dealers

Auditing and Internal Controls Summaries

Auditing Standards -- New Internet Version of Government Auditing Standards Released
Audited Financial Statements -- Clarified SAS Discussed
Broker-Dealers -- SEC Approves PCAOB Rules on Audits of Broker-Dealers

Government Summaries

Auditing Standards -- New Internet Version of Government Auditing Standards Released
Pensions -- GASB's Release of Pension Proposals Discussed
GASB Report Issued -- GASB 64 and Other Matters Discussed

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ACCOUNTING AND SEC HEADLINES:
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Income Taxes -- Interpretation Updated
For detail, please contact info@hkcmcpa.us

We have updated our publication, Accounting for Income Taxes - Interpretations of U.S. GAAP. Specifically, we have added new interpretations covering the following topics:

-Accounting for income tax indemnities outside of a business combination;
-Call options purchased in conjunction with issuing convertible debt;
-SEC staff views on implications of indefinite reinvestment assertion;
-Adjustments of prior interim period's intraperiod tax allocation caused by the exception to the incremental allocation to an item other than income from continuing operations; and
-Accounting for income tax indemnities as part of a business combination.

See our Literature Update for complete details.

Financial Statement Disclosures -- FASB Discusses Disclosure Framework and Other Matters
For detail, please contact info@hkcmcpa.us

As reported in its "Summary of Board Decisions" publication, the FASB met on August 24, 2011, and discussed the following topics:

-Disclosure framework;
-Accounting for financial instruments-hedging; and
-Investment properties and Investment companies.

The FASB discussed a first draft of a "decision process" for use in establishing disclosure requirements for financial statement line items. The goal of the decision process is to improve the efficiency and effectiveness of financial statement disclosures by focusing on matters that are most important to users of a particular entity’s financial statements. Achieving that result would require decisions by the FASB in standard-setting projects about a range of possible disclosure sets that would be customized by each reporting entity to focus on what is important in its own circumstances. For example, an entity with a pension plan that is barely material would be expected to provide less information about its plan than an entity with a pension plan that requires future payments that are so large that they are extremely important to the future of the entity.

FASB members stated that the decision process generally is appropriate and workable. The FASB directed its staff to evaluate the suggested revisions, change the process as necessary, and test the process further by applying it to various topics in the FASB Accounting Standards Codification^TM. After satisfactory completion of those steps, the FASB staff is expected to begin consultation with stakeholders after revising the draft based on FASB member comments.

This decision process is one of three parts of the disclosure framework project. The other two parts, which the FASB has not yet considered in detail, are a decision process for:

-Disclosures about other events and conditions that affect prospects for future cash flows but that are not yet recognized in the financial statements; and
-General information about the reporting entity.

Regarding its project on investment properties and investment companies, the FASB reached a number of tentative decisions, including:

-An investor in an investment property entity would be permitted to use the net asset value practical expedient in Topic 820, Fair Value Measurement, to estimate the fair value of its investment if investors in the investment property entity would transact at net asset value per share;
-To remove the reference to “rental income only” from the express business purpose criterion to qualify as an investment property entity;
-An investment property entity would initially measure its investment properties at transaction price, including transaction costs; and
-Rental revenue from real estate properties would be recognized on a contractual basis.

Asset-Backed Securities -- SEC Changes Reporting Obligations for Asset-Backed Securities
For detail, please contact info@hkcmcpa.us

The SEC has issued a final rule, Suspension of the Duty to File Reports for Classes of Asset-Backed Securities under Section 15(d) of the Securities Exchange Act of 1934. This final rule implements the requirements of Section 942(a) of the Dodd-Frank Act, which eliminated the automatic suspension of the duty to file under Section 15(d) of the Securities Exchange Act of 1934 (Exchange Act) for asset-backed securities issuers and granted the SEC the authority to issue rules providing for the suspension or termination of that duty. This final rule provides certain specified thresholds for suspension of the reporting obligations for asset-backed securities and amends SEC rules relating to Exchange Act reporting obligations for issuers of asset-backed securities in light of these statutory changes.

This final rule is effective September 22, 2011.

Broker-Dealers -- SEC Approves PCAOB Rules on Audits of Broker-Dealers

The SEC has published the following orders regarding PCAOB rules:

-Order Approving Proposed Temporary Rule for an Interim Program of Inspection Related to Audits of Brokers and Dealers (Inspection Order) For detail, please contact info@hkcmcpa.us

-Order Approving Proposed Board Funding Final Rules for Allocation of the Board’s Accounting Support Fee Among Issuers, Brokers, and Dealers, and Other Amendments to the Board’s Funding Rules (Funding Order). For detail, please contact info@hkcmcpa.us

These orders approve PCAOB rules to implement certain provisions of the Dodd-Frank Act related to audits of securities brokers and dealers. The Inspection Order includes a temporary rule to establish an interim inspection program for registered public accounting firms’ audits of brokers and dealers. This temporary rule will allow the PCAOB to begin basic inspection work on selected audits of brokers and dealers.

The Funding Order includes rules for assessing and collecting a portion of the PCAOB accounting support fee from brokers and dealers to fund oversight of audits of brokers-dealers, and includes certain amendments to existing funding rules for issuers. The funding rules included in this order result in brokers and dealers with more than $5 million in tentative net capital (as defined) being allocated an appropriate portion of the accounting support fee.

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

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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Auditing Standards -- New Internet Version of Government Auditing Standards Released
For detail, please contact info@hkcmcpa.us

The U.S. Government Accountability Office (GAO) has released the 2011 Internet Version of Government Auditing Standards. This version contains the intended content for the final 2011 Revisions of Government Auditing Standards. The GAO plans to formally issue the 2011 Revision of Government Auditing Standards later this year after the AICPA has completed the revisions related to its Clarity Project.

The effective date for financial audits and attestation engagements is for periods ending on or after December 15, 2012. The effective date for performance audits is for audits beginning on or after December 15, 2011. Early implementation is not permitted.

Audited Financial Statements -- 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), Special Considerations-Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement, which was finalized as part of the AICPA's Clarity Project. The clarified SAS will supersede:

-SAS 58 (AU Section 508), Reports on Audited Financial Statements, paragraphs 33-34 (regarding limited reporting engagements, including reporting on a single financial statement); and
-SAS 62 (AU Section 623), Special Reports, paragraphs 11-18 (regarding audits of specified elements, accounts, or items of a financial statement).

The clarified SAS addresses special considerations in the application of generally accepted auditing standards to an audit of a single financial statement or of a specific element, account, or item of a financial statement.

The clarified SAS will be effective for audits of single financial statements or of specific elements, accounts, or items of a financial statement as of or 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

Broker-Dealers -- SEC Approves PCAOB Rules on Audits of Broker-Dealers
As discussed above in our Accounting and SEC Summaries, the SEC has published the following orders regarding PCAOB rules:

-Order Approving Proposed Temporary Rule for an Interim Program of Inspection Related to Audits of Brokers and Dealers (Inspection Order) For detail, please contact info@hkcmcpa.us

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GOVERNMENT HEADLINES:
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Auditing Standards -- New Internet Version of Government Auditing Standards Released
For detail, please contact info@hkcmcpa.us

As discussed above in our Auditing and Internal Controls Summaries, the U.S. Government Accountability Office (GAO) has released the 2011 Internet Version of Government Auditing Standards. This version contains the intended content for the final 2011 Revisions of Government Auditing Standards. The GAO plans to formally issue the 2011 Revision of Government Auditing Standards later this year after the AICPA has completed the revisions related to its Clarity Project.

The effective date for financial audits and attestation engagements is for periods ending on or after December 15, 2012. The effective date for performance audits is for audits beginning on or after December 15, 2011. Early implementation is not permitted.

Pensions -- GASB's Release of Pension Proposals Discussed
For detail, please contact info@hkcmcpa.us

We have added a Governmental GAAP Update Service that discusses the GASB's release of the following documents:

-Exposure Draft, Financial Reporting for Pension Plans-an amendment of GASB Statement No. 25;
-Exposure Draft, Accounting and Financial Reporting for Pensions-an amendment of GASB Statement No. 27; and
-Plain-Language Supplement, Pension Accounting and Financial Reporting.

This update discusses key aspects of these documents related to pension plans and reporting by employers.

GASB Report Issued -- GASB 64 and Other Matters Discussed
For detail, please contact info@hkcmcpa.us

The July 2011 edition of the "GASB Report" has been issued and includes the following discussion items:

-GASB calendar;
-GASB proposes improvements to pension standards;
-Summary of recent GASB meetings;
-Issuance of GASB Statement No. 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions;
-GASB seeks comments on preliminary views on recognition and measurement of elements of financial statements;
-Summary of recent meetings of the Governmental Accounting Standards Advisory Council; and
-Who's who at the GASB.

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