===================================================
Accounting Research Manager(TM)
Weekly Summary of Developments
May 14-18, 2007
===================================================
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@zy-cpa.com
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
Variable Interest Entities -- FASB Issues Guidance on Applicability of FIN 46R to Investment Companies
Transfers of Financial Assets -- FASB Discusses Financial Instruments: Liabilities and Equity Project and Other Matters at May 8, 2007 Meeting
International Financial Reporting -- IFRIC Discusses Customer Loyalty Programs and Other Matters at May 3-4, 2007 Meeting
Auditing Headlines
2007 Compliance Supplement -- OMB Issues 2007 A-133 Compliance Supplement
Independence -- AICPA Professional Ethics Executive Committee Issues Proposed Guidance on Independence Matters
Government Headlines
2007 Compliance Supplement -- OMB Issues 2007 A-133 Compliance Supplement
=============================
ACCOUNTING AND SEC HEADLINES:
=============================
Variable Interest Entities -- FASB Issues Guidance on Applicability of FIN 46R to Investment Companies
For detail, please contact info@zy-cpa.com
The FASB has issued FASB Staff Position (FSP) FIN 46R-7, "Application of FASB Interpretation No. 46(R) to Investment Companies." This FSP addresses the application of FASB Interpretation (FIN) No. 46 (Revised December 2003), Consolidation of Variable Interest Entities, by an entity that accounts for its investment in accordance with the specialized accounting guidance in the AICPA Audit and Accounting Guide, Audits of Investment Companies (this guide is being retitled "Investment Companies" as a result of a forthcoming new Statement of Position). This FSP clarifies that investments accounted for at fair value by investment companies are not subject to the consolidation requirements in FIN46R.
Transfers of Financial Assets -- FASB Discusses Financial Instruments: Liabilities and Equity Project and Other Matters at May 8, 2007 Meeting
For detail, please contact info@zy-cpa.com
As reported in its "Action Alert" publication, the FASB met on May 8, 2007, and addressed the following projects or topics:
-Financial Instruments: Liabilities and Equity
-Transfers of Financial Assets
-Conceptual Framework: Reporting Entity
The FASB discussed how an entity applying the ownership-settlement approach would report the issuance of a direct ownership instrument upon the exercise, conversion, or settlement of an indirect ownership instrument. The FASB decided an entity would measure the direct ownership instrument issued at fair value at the issuance date. The difference between the fair value of the direct ownership instrument issued and the carrying value of the indirect ownership instrument should be presented in the statement of changes in equity as a transfer between the indirect ownership instrument and the direct ownership instrument issued.
The FASB also discussed how to apply FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, to transactions involving a transfer of a financial asset and a repurchase financing of that asset that involve the same parties to the initial transfer. The FASB decided to address this issue by providing guidance in the form of a FASB Staff Position to be provided at a later date. That guidance would permit a transferee and transferor to evaluate the accounting for the transactions separately under Statement 140 in certain circumstances.
In discussing its Conceptual Framework project, the FASB decided, among other decisions, that the composition of a group entity should be based on control. Typically, a group would comprise a parent and other entities under its control. In addition, there might be occasions when general purpose external financial reports may be prepared for a group of entities under common control, such as combined financial statements for two or more entities under the control of a single investor.
The Action Alert also notes that the following projects or topics are scheduled to be discussed by the FASB at its meeting scheduled for May 23, 2007:
-Agenda Decision: Hybrid Financial Instruments
-Agenda Decision: Statement 133 Hedging Implementation
The FASB will discuss whether to add a project to its agenda on determining the nature of a host contract related to a hybrid financial instrument issued in the form of a share under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, along with the objective, scope and timing of any such project.
The FASB also intends to discuss practice issues related to the hedge accounting guidance in Statement 133 and whether to add a project to its agenda to address the accounting for hedging activities. If the FASB decides to add a project to the agenda, it will also discuss potential approaches for the accounting for hedging activities.
International Financial Reporting -- IFRIC Discusses Customer Loyalty Programs and Other Matters at May 3-4, 2007 Meeting
For detail, please contact info@zy-cpa.com
As reported in the IASB's "IFRIC Update" publication, the IFRIC met on May 3-4, 2007, and discussed the following matters:
-D19 IAS 19 - The Asset Ceiling: Availability of Economic Benefits and Minimum Funding Requirements
-D20 Customer Loyalty Programs
-IAS 18 Revenue - Customer contributions
-IAS 18 Revenue - Guidance on identifying agency arrangements
-IAS 18 Revenue - Sales of real estate
-IAS 19 Employee Benefits - Timetable for IAS 19 issues
-IAS 21 The Effects of Changes in Foreign Exchange Rates - Hedging of a net investment in a foreign operation
-IAS 27 Consolidated and Separate Financial Statements
-IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations - Disclosures
-IFRIC Agenda Decisions
-Tentative agenda decisions
The IFRIC completed its redeliberations of draft Interpretation D19, The Asset Ceiling: Availability of Economic Benefits and Minimum Funding Requirements. The final Interpretation is expected to be issued in July and will become effective for financial periods beginning on or after January 1, 2008. The IFRIC decided: (a) to clarify that minimum funding requirements are for an entity to fund a post-employment defined benefit or other long-term plan; (b) an entity should recognize an asset for a refund only if it has an unconditional right to that refund, but not to link this requirement for recognition to the treatment of contingent assets under IAS 37, Provisions, Contingent Liabilities and Contingent Assets; (c) the assumptions underlying the calculation of the IAS 19 future service cost should be consistent with those underlying the defined benefit obligation at the balance sheet date and should assume a stable workforce in the future unless committed at the balance sheet date to make a reduction in the workforce; and (d) an entity cannot recognize economic benefits from refunds, reductions in future contributions, or a combination of both based on assumptions that are mutually exclusive.
The IFRIC also completed its redeliberations of draft Interpretation D20, Customer Loyalty Programs. The final Interpretation is expected to be issued in July and will become effective for financial periods beginning on or after January 1, 2008. Before approving the Interpretation, the IFRIC reconsidered the proposal in D20 that revenue should be allocated between goods or services sold and the award credits by reference to their relative fair values. It decided that the Interpretation should require the revenue to be allocated to the award credits determined by reference to their fair values, rather than cost. However, the Interpretation should not preclude an allocation method in which the amount allocated to the award credits is equal to their fair value, with the residual consideration being allocated to the other goods and services. No specific disclosure requirements will be contained in this Interpretation nor will it include any specific transitional guidance.
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@zy-cpa.com
==================
AUDITING HEADLINES:
==================
2007 Compliance Supplement -- OMB Issues 2007 A-133 Compliance Supplement
For detail, please contact info@zy-cpa.com
The Office of Management and Budget (OMB) has issued the 2007 OMB Circular A-133 Compliance Supplement, which supersedes the 2006 OMB Circular A-133 Compliance Supplement. The supplement is effective for audits of fiscal years beginning after June 30, 2006, and should be used when performing audits in accordance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Appendix V to the supplement contains a list of changes from the 2006 version which may be beneficial to users when understanding how the prior supplement has been modified or updated.
Independence -- AICPA Professional Ethics Executive Committee Issues Proposed Guidance on Independence Matters
For detail, please contact info@zy-cpa.com
The AICPA issued an Exposure Draft (ED), Proposed Interpretation 102-7, "Other Considerations: Meeting the Objectives of the Fundamental Principles, and Framework for Meeting the Objectives of the Fundamental Principles." This proposal would provide an interpretation of Rule 102 of the AICPA's Code of Professional Conduct. In addition, this proposal also contains a proposed "framework" that provides guidance for members when faced with making decisions on ethical matters that are not explicitly addressed by the Code of Conduct and relates to the proposed rule.
Comments on the ED are due August 15, 2007.
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@zy-cpa.com
=====================
GOVERNMENT HEADLINES:
=====================
2007 Compliance Supplement -- OMB Issues 2007 A-133 Compliance Supplement
For detail, please contact info@zy-cpa.com
As discussed above in our Auditing Summaries, the Office of Management and Budget (OMB) has issued the 2007 OMB Circular A-133 Compliance Supplement, which supersedes the 2006 OMB Circular A-133 Compliance Supplement .The supplement is effective for audits of fiscal years beginning after June 30, 2006, and should be used when performing audits in accordance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Appendix V to the supplement contains a list of changes from the 2006 version which may be beneficial to users when understanding how the prior supplement has been modified or updated.
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@zy-cpa.com