===================================================
Accounting Research Manager®
Weekly Summary of Developments
ARM Weekly Summary May 21-24, 2012
===================================================
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
=============================
ACCOUNTING AND SEC HEADLINES:
=============================
Private Companies -- FAF Establishes New Council to
Improve Standard Setting for Private Companies
For detail, please contact info@hkcmcpa.us
After seeking and considering extensive public
comment, the Financial Accounting Foundation (FAF) Board of Trustees has
established a new body to improve the process of setting accounting standards
for private companies. The new group, the Private Company Council (the PCC or
Council), will have two principal responsibilities. Based on criteria mutually
developed and agreed to with the FASB, the Council will determine whether
exceptions or modifications to existing nongovernmental U.S. GAAP are necessary
to address the needs of users of private company financial statements. The
Council will identify, deliberate, and vote on any proposed changes, which will
be subject to endorsement by the FASB and submitted for public comment before
being incorporated into GAAP. The PCC will also serve as the primary advisory
body to the FASB on the appropriate treatment for private companies for items
under active consideration on the FASB’s technical agenda.
Key elements of the Council’s responsibilities and
operating procedures include the following:
-Agenda Setting. Working jointly, the Council and
the FASB will mutually agree on criteria for determining whether and when
exceptions or modifications to GAAP are warranted for private companies.
-FASB Endorsement Process. If endorsed by a simple
majority of FASB members, the proposed exceptions or modifications to GAAP will
be exposed for public comment. At the conclusion of the comment process, the
Council will redeliberate the proposed exceptions or
modifications and forward them to the FASB, who will make a final decision on
endorsement, generally within 60 days. If the FASB endorses the proposals, they
will be incorporated into GAAP. If the FASB does not endorse, the FASB Chairman
will provide the Council Chairman with a written explanation, including
possible changes for the Council to consider that could result in FASB
endorsement.
-Membership and Terms. The Council will be composed
of nine to 12 members, including a Chairman, all of whom will be selected and
appointed by the FAF Board of Trustees. The Council Chairman will not be a FASB
member. Membership of the Council will include a variety of users, preparers,
and practitioners with substantial experience working with private companies.
-FASB Liaison and Staff Support. A FASB member will
be assigned as a liaison to the Council. FASB technical and administrative
staff will be assigned to support and work closely with the Council.
-Meetings. During its first three years of
operation, the Council will hold at least five meetings each year, with
additional meetings if determined necessary by the Council Chair. Deliberative
meetings of the Council will be open to the public.
-Oversight. The FAF Board of Trustees will create a
special-purpose committee of Trustees, the Private Company Review Committee,
which will have primary oversight responsibilities for the Council.
-FAF Trustees’ Three-Year Assessment. The Council
will provide quarterly written reports to the FAF Board of Trustees. The FAF
Trustees will conduct an overall assessment of the Council following its first
three years of operation to determine whether its mission is being met and
whether further changes to the standard-setting process for private companies
are warranted.
The private company plan approved by the FAF Board
of Trustees generally follows the outline of the initial Trustee proposal
announced in October 2011. However, the plan includes several significant
changes. In response to stakeholder concerns, the Trustees changed the process
through which the FASB considers Council recommendations for private company
exceptions or modifications to GAAP from one of ratification to one of
endorsement, as noted above. In addition, the final plan specifies the
following: (a) the Council Chairman will not be a FASB member; (b) the Council
will hold meetings more frequently than originally proposed; and (c) the Council’s
size will be smaller than initially suggested.
See the FAF's news release for complete details.
International Accounting -- IFRS Checklist Update
Published
For detail, please contact info@hkcmcpa.us
We have updated our “Summary Checklist of Recent
Authoritative International Financial Reporting Standards” to reflect the
issuance of Annual Improvements to IFRSs 2009-2011 Cycle by the IASB. This
checklist is intended to serve as a reference tool to review authoritative
standards recently issued or approved by the IASB. The coverage of this
checklist includes International Financial Reporting Standards (IFRS),
International Accounting Standards (IAS), and interpretations developed by the
IFRS Interpretations Committee (IFRIC). All of these documents must be approved
by the IASB before they are issued.
See our discussion of the Annual Improvements
2009-2011 Cycle below.
See our Literature Update for complete details.
EITF Materials -- FASB Issues Materials for June 21,
2012 EITF Meeting
For detail, please contact info@hkcmcpa.us
The FASB has issued the following materials for the
June 21, 2012 EITF meeting:
-Proposed agenda;
-EITF agenda report;
-EITF Issue No. 12-A, "Not-for-Profit Entities:
Classification of the Sale of Donated Securities in the Statement of Cash
Flows" (comment letters); and
-EITF Issue No. 12-E, "Accounting for Fair
Value Information That Arises after the Measurement Date and Its Inclusion in
the Impairment Analysis of Unamortized Film Costs" (comment letter).
Financial Instruments -- FASB and IASB Discuss
Financial Instruments and Other Matters
For detail, please contact info@hkcmcpa.us
As reported in its "Summary of Board
Decisions" publication, the FASB and IASB (the Boards) met on May 21-22,
2012, and May 24, 2012, and discussed the following topics:
-Accounting for financial
instruments-classification and measurement;
-Investment companies;
-Accounting for financial instruments-impairment;
-Insurance contracts;
-Revenue recognition; and
-Leases.
Regarding their project on the classification and
measurement of financial instruments, the Boards reached the following
tentative decisions:
-The "Fair Value through Other Comprehensive
Income" (FVOCI) category should be defined, and "Fair Value through
Net Income" should be the residual category;
-Financial assets should be measured at FVOCI if
they are eligible debt instruments and are held within a business model whose
objective is both to hold the financial assets to collect contractual cash
flows and to sell the financial assets; and
-The IASB will extend the existing reclassification
requirements in IFRS 9, Financial Instruments, to the FVOCI category.
Regarding their project on investment companies,
the Boards discussed the overall approach to providing guidance for determining
whether an entity is an investment company and the related implementation
guidance. The Boards decided that an entity would not be required to meet a
list of strict criteria to be an investment company. Rather, an entity would be
required to meet a definition and also consider additional factors to determine
whether it is an investment company. The Boards decided that an entity would
consider its purpose and design when making the assessment of whether it is an
investment company.
Annual Improvements -- IASB Concludes the 2009-2011
Annual Improvements Cycle
For detail, please contact info@hkcmcpa.us
The IASB has issued Annual Improvements 2009-2011
Cycle, a collection of amendments to IFRSs in response to six issues addressed
during the 2009-2011 cycle as its latest set of annual improvements. The IASB
uses the annual improvements process to make necessary, but non-urgent,
amendments to IFRSs that will not be included as part of any other project. The
following IFRSs and topics were addressed by these amendments:
-IFRS 1, First-time Adoption of International
Financial Reporting Standards for: (a) the repeated application of IFRS 1; and
(b) borrowing costs.
-IAS 1, Presentation of Financial Statements, for
clarification of the requirements for comparative information.
-IAS 16, Property, Plant and Equipment, for
classification of servicing equipment.
-IAS 32, Financial Instruments: Presentation, for
the tax effect of distribution to holders of equity instruments.
-IAS 34, Interim Financial Reporting, for interim
financial reporting and segment information for total assets and liabilities.
The amendments are effective for annual periods
beginning on or after January 1, 2013. Early application is permitted.
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@hkcmcpa.us
=======================================
AUDITING AND INTERNAL CONTROLS HEADLINES:
=======================================
Compilations and Reviews -- New Edition of
Compilations and Reviews Published
For detail, please contact info@hkcmcpa.us
We have published the 2012 edition of Knowledge-Based
Compilations and Reviews. This publication is designed to help the accountant
efficiently and effectively perform financial statement compilations and
reviews of nonpublic commercial entities in accordance with Statements on
Standards for Accounting and Review Services issued by the Accounting and
Review Services Committee of the American Institute of Certified Public
Accountants. This edition of the publication includes revisions and updates to
reflect current authoritative literature and, among other things,
pronouncements through AICPA Statements on Quality Control Standards (SQCS) No.
8, A Firm’s System of Quality Control (Redrafted).
See our Literature Update for complete details.
Communicating Internal Control Matters -- AICPA
Clarified Standard Discussed
For detail, please contact info@hkcmcpa.us
We have added a GAAS Update Service that provides
discussion and analysis of a clarified AICPA Statement on Auditing Standards
(SAS), Communicating Internal Control Related Matters Identified in an Audit,
which was finalized as part of the AICPA's Clarity Project and subsequently
designated as AU-C Section 265, Communicating Internal Control Related Matters
Identified in an Audit, by SAS 122, Statements on Auditing Standards:
Clarification and Recodification. AU-C Section 265 supersedes SAS 115 (AU
Section 325), Communicating Internal Control Related Matters Identified in an
Audit, and will be effective for audits of financial statements for periods
ending on or after December 15, 2012.
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:
======================
Financial Reports -- Implementation Dates for GASB
Standards Discussed
For detail, please contact info@hkcmcpa.us
We have published a Governmental GAAP Update
Service that provides a schedule of implementation dates for current GASB
standards yet to be implemented, as well as proposed standards. It also offers
some tools and techniques to use in updating the MD&A and the notes to the
basic financial statements. Current GASB pronouncements discussed include:
-GASB Statement No. 60, Accounting and Financial
Reporting for Service Concession Arrangements;
-GASB Statement No. 62, Codification of Accounting
and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and
AICPA Pronouncements; and
-GASB Statement No. 63, Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources, and Net
Position.
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