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Accounting Research Manager®
Weekly Summary of Developments
ARM Weekly Summary June 4-8, 2012
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contains this week's weekly summary of developments. Click the link below to
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ACCOUNTING AND SEC HEADLINES:
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Inflation Rates -- Interpretation Issued, Inflation
Rates for Judging Whether an Economy Is Highly Inflationary - March 2012
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Our Interpretation, Inflation Rates for Judging
Whether an Economy Is Highly Inflationary - March 2012, has been issued and
reflects the latest available inflation rate information. In this update,
Belarus has been reclassified from countries that do the “watch list” of
countries that may have highly inflationary economies to the countries that
have highly inflationary economies.
See our Literature Update for complete details.
Intangible Assets -- FASB Discusses Impairment of
Indefinite-Lived Intangible Assets and Other Matters
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As reported in its "Summary of Board
Decisions" publication, the FASB met on June 6, 2012, and discussed the
following topics:
-Impairment of indefinite-lived intangible assets;
-Not-for-profit financial reporting-financial
statements;
-Definition of a nonpublic entity; and
-Revenue recognition.
Regarding its project on the impairment of
indefinite-lived intangible assets, the FASB discussed comment letters and
other feedback received on its Exposure Draft, Intangibles-Goodwill and Other
(Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, and
discussed the staff’s analysis of the Exposure Draft’s proposals in light of
that input. The FASB affirmed its proposal to provide entities with the option
to use a qualitative approach to assess the impairment of an indefinite-lived
intangible asset. Under that approach, an entity would qualitatively assess
whether existing events or circumstances indicate that it is more likely than
not that an indefinite-lived intangible asset is impaired (the
more-likely-than-not threshold refers to a likelihood that is more than 50
percent). An entity would not be required to perform a quantitative impairment
test (comparing the fair value of the asset with its carrying value) if, after
assessing the totality of relevant events and circumstances, management
determines that it is not more likely than not that the indefinite-lived
intangible asset is impaired. The FASB also affirmed that additional disclosure
requirements would not be necessary relating to the use of the optional
qualitative assessment.
The FASB also affirmed that a nonpublic entity
would not be required to provide quantitative disclosures about significant
unobservable inputs used in a Level 3 fair value measurement of an
indefinite-lived intangible asset after its initial recognition. The FASB also
affirmed that a public entity would continue to be required to provide those
disclosures.
Regarding its project on not-for-profit financial
reporting, the FASB discussed its staff’s proposed project plan, which reflects
feedback received from project resource group members. FASB members expressed
support for the proposal, directing the staff to proceed as planned.
Financial Instruments -- IASB and FASB Discuss
Financial Instruments and Other Matters
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As reported in its "IASB Update"
publication, the IASB and FASB (the Boards) met on May 21-May 24, 2012, and
discussed the following topics:
-Financial instruments-classification and
measurement;
-Financial instruments-impairment;
-Investment entities;
-Insurance contracts;
-Leases; and
-Revenue recognition.
In addition, the IASB held separate sessions on the
following topics:
-Agenda consultation;
-Definition of the term "non-monetary
asset";
-Effective date and transition methods;
-IFRS 10, Consolidated Financial Statements,
transition requirements;
-Financial instruments-impairment;
-Post-implementation review of IFRS 8, Operating
Segments; and
-Work plan.
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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Peer Review -- AICPA Issues Peer Review Proposal
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The AICPA Peer Review Board has approved the
issuance of the Exposure Draft, Proposed Changes to the AICPA Standards for
Performing and Reporting on Peer Reviews -- Scope of System Review and Must
Select Engagements. The Exposure Draft contains proposed revisions to the AICPA
Standards for Performing and Reporting on Peer Reviews (Standards).
The Exposure Draft includes an explanatory
memorandum of the proposed revisions to the current Standards and related
Interpretations, explanations, background, and other pertinent information, as
well as marked excerpts from the current Standards and Interpretations to allow
the reader to see all changes (i.e., items that are being deleted from the
Standards and Interpretations are struck through, and new items are underlined).
Among other changes, the proposal would add all examinations performed under
the Statements on Standards for Attestation Engagements to the scope of a
System Review and Service Organization Control (SOC) 1 and SOC 2 engagements to
the types of engagements that must be selected in a System Review.
Revisions to the Standards adopted as final by the
Peer Review Board will be effective for reviews commencing on or after March 1,
2013.
Comments on this proposal are due by August 31,
2012.
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GOVERNMENT HEADLINES:
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GASB Standards -- GASB Issues Plain-Language
Articles on Recent Standards
The GASB has released the following two
plain-language documents summarizing the provisions of its recently released
GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, and
the Exposure Draft, Government Combinations and Disposals of Government
Operations:
-Plain-Language Article: GASB Proposes Guidance on
Government Combinations and Disposals of Government Operations and;
For detail, please contact info@hkcmcpa.us
-Plain-Language Article: GASB Statement
Reclassifies Certain Items Previously Reported as Assets and Liabilities
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GASB 65 reclassifies certain items that were
previously reported as assets and liabilities as deferred outflows resources,
deferred inflows of resources, or current-period outflows and inflows.
Informally, deferred outflows resources and deferred inflows of resources are
referred to as “deferrals.” Deferrals are reported in a statement of financial
position and they result from outflows and inflows of resources that have
already taken place but are not recognized in the financial statements as
revenues and expenses (expenditures) because they relate to a future period.
The GASB also recently proposed new accounting and
financial reporting standards for government combinations, which are commonly
referred to as mergers and acquisitions. The Exposure Draft also proposes
accounting and financial reporting guidance for disposals of government
operations that have been transferred or sold. The Exposure Draft proposes
appropriate guidance that is specifically intended for governmental entities
and addresses circumstances and conditions that commonly arise in the public
sector.
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accessible under your current subscription. For information about upgrading
your subscription to include additional content, click here:
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