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Accounting Research Manager®

Weekly Summary of Developments

April 23-27, 2012

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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

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ACCOUNTING AND SEC HEADLINES:

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Disclosure Framework -- FASB Discusses Disclosure Framework and Other Matters

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As discussed in its "Summary of Board Decisions" publication, the FASB met on April 25, 2012, and discussed the following issues:

-Disclosure framework;

-Consolidation policy and procedures;

-Nonpublic entity fair value measurement disclosures; and

-Definition of a nonpublic entity.

Regarding its disclosure framework project, the FASB discussed issues on: (a) interim disclosures; and (b) the costs and consequences of disclosure. The FASB is expected to issue an Invitation to Comment document for this project. The FASB decided to include a discussion of interim disclosures and the costs and consequences of disclosure in the Invitation to Comment document. In addition, the document is expected to include the following:

-An overview of the project;

-A framework for the FASB for setting disclosure;

-A decision process an entity can use for providing disclosure; and

-Guidance for organizing and formatting the notes.

Regarding its project on consolidation policy and procedures, the FASB staff presented a summary of the comment letters received on its Exposure Draft, Consolidation (Topic 810): Principal versus Agent Analysis. That feedback focused on a variety of different issues, including:

-The principle of and objective for consolidation and potential alignment with the voting interest model;

-Substantive kick-out and participating rights;

-Fee seniority;

-The decision maker’s exposure to negative and positive returns; and

-Reassessment criteria.

Financial Institutions -- SEC Staff Issues Disclosure Guidance for Small Financial Institutions

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The SEC Division of Corporation Finance (Corp Fin) has issued CF Disclosure Guidance, Topic No. 5: Staff Observations Regarding Disclosures of Smaller Financial Institutions. This guidance summarizes a number of observations by Corp Fin on Management’s Discussion and Analysis and accounting policy disclosures of smaller financial institutions. Corp Fin issued this guidance in order to assist smaller financial institutions in enhancing the disclosure they provide investors in the reports they file with the SEC. This guidance provides Corp Fin observations on the following topics:

-Allowance for loan losses;

-Charge-off and nonaccrual policies;

-Commercial real estate;

-Loans measured for impairment based on collateral value;

-Credit risk concentrations;

-Troubled debt restructurings and modifications;

-Other real estate owned;

-Deferred taxes; and

-Federal Deposit Insurance Corporation assisted transactions.

Financial Assets -- IASB and FASB Discuss Financial Assets and Other Issues

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As reported in its "IASB Update" publication, the IASB and FASB met on April 16-20, 2012, and discussed the following issues:

-Classification and measurement;

-Impairment;

-Investment entities; and

-Insurance contracts.

In addition, the IASB held separate sessions to discuss the following topics:

-Annual improvements project;

-IFRS Interpretations Committee update; and

-Work plan.

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AUDITING AND INTERNAL CONTROLS HEADLINES:

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Audit Documentation -- AICPA Clarified Auditing Standard Discussed

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We have added a GAAS Update Service that provides discussion and analysis of a clarified AICPA Statement on Auditing Standards (SAS), Audit Documentation, which was finalized as part of the AICPA's Clarity Project and subsequently designated as AU-C Section 230, Audit Documentation, by SAS 122, Statements on Auditing Standards: Clarification and Recodification. AU-C Section 230 supersedes SAS 103 (AU Section 339), Audit Documentation, but does not change or expand the requirements of AU Section 339 in any significant respect.

AU-C Section 230 will be 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."

Commercial Entities -- Updated Edition of Knowledge-Based Audits of Commercial Entities Published

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We have published a new edition of Knowledge-Based Audits of Commercial Entities. This publication is designed to help the auditor accurately, efficiently and effectively perform financial statement audits of nonpublic commercial entities in accordance with auditing standards generally accepted in the United States (GAAS). This edition of the publication includes revisions and updates to reflect current authoritative literature and, among other things, auditing pronouncements through SAS No. 121, Revised Applicability of Statement on Auditing Standards No. 100 - Interim Financial Information.

See our Literature Update for complete details.

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GOVERNMENT HEADLINES:

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Business Combinations -- GASB Proposal on Combinations and Disposal Discussed

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We have added a Governmental GAAP Update Service that discusses the GASB's Exposure Draft (ED), Government Combinations and Disposals of Government Operations. This Update discusses additional decisions made by the GASB related to the ED. Topics discussed in this Update include:

-Overview of the ED;

-Accounting and financial reporting for each type of combination; and

-Disclosures.

Comments on the ED are due June 15, 2012.

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