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Accounting Research Manager(TM)
Weekly Summary of Developments
October 8-12, 2007
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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:
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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
Executive Compensation Disclosure -- SEC Staff Releases Observations on Executive Compensation Disclosure
Liquidity in the Markets -- AICPA Issues CAQ Alert and White Papers
Defined Benefit Pension and Other Postretirement Plans -- AICPA Issues CAQ Alert
Fair Value Measurement -- FASB to Discuss Whether to Defer the Effective Date of Statement 157 and Other Matters at October 17, 2007 Meeting
International Financial Reporting -- IASB Issues Proposed Improvements to IFRS
International Financial Reporting -- IASB Issues Agenda for October Meeting
Auditing and Internal Controls Headlines
Compilations and Reviews -- Statement on Standards for Accounting and Review Services No. 15
Liquidity in the Markets -- AICPA Issues CAQ Alert and White Papers
Defined Benefit Pension and Other Postretirement Plans -- AICPA Issues CAQ Alert
Government Headlines
Implementation Dates -- Reminder of Upcoming GASB Implementation Dates
GASB Report Issued -- Comments on Derivatives Proposal Sought
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ACCOUNTING AND SEC HEADLINES:
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Executive Compensation Disclosure -- SEC Staff Releases Observations on Executive Compensation Disclosure
For detail, please contact info@zy-cpa.com
We have published a hot topic announcing that the SEC staff has issued, "Staff Observations in the Review of Executive Compensation Disclosure." This release provides general observations by the SEC staff resulting from its initial review of executive compensation disclosures. The SEC staff reviewed executive compensation and related disclosures made by 350 registrants under new and revised rules adopted July 26, 2006 (the "Rules"). The Rules were generally effective beginning for the 2007 proxy season and significantly changed how a registrant discloses information on ways it compensates its executive officers and directors.
Two principal themes emerged from the SEC staff observations. First, more focused disclosure of how and why certain executive compensation decisions were made should be provided. Specifically, a registrant's "Compensation Discussion and Analysis" (CD&A) section (Item 402(b) of Regulation S-K) must provide plain English disclosures regarding the basis and context for granting different types and amounts of executive compensation. Second, the manner of presentation of executive compensation disclosure is important and should provide more direct, specific, clear, and understandable executive compensation disclosures. Given the significant volume of information required by the Rules, the SEC staff encourages registrants to continue thinking of techniques to make such information more organized and clearly presented, such as using executive summaries, tables, or charts to present registrant-specific information.
See our hot topic for complete details.
Liquidity in the Markets -- AICPA Issues CAQ Alert and White Papers
For detail, please contact info@zy-cpa.com
The Center For Audit Quality (CAQ), an affiliate of the AICPA, has issued CAQ Alert 2007-51, "White Papers on Illiquidity in the Markets." The Alert includes three white papers that address accounting issues arising from or related to the current illiquid market conditions associated with the subprime mortgage-related markets. Specifically, the white papers address:
-Measurements of fair value in illiquid (or less liquid) markets;
-Consolidation of commercial paper conduits; and
-Accounting for underwriting and loan commitments.
The Alert is intended as an aid to auditors completing annual audits and quarterly reviews of public companies that are affected by the recent events in the subprime mortgage markets.
Defined Benefit Pension and Other Postretirement Plans -- AICPA Issues CAQ Alert
For detail, please contact info@zy-cpa.com
The CAQ has issued CAQ Alert 2007-30, "Reexamining the Adoption of SFAS 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans." Originally issued in June 2007, the Alert discusses the SEC staff's intentions regarding companies who did not correctly implement the transition provisions of Statement 158. Calendar year end public companies were required to apply the transition provisions of Statement 158 beginning with their financial statement for the year ended December 31, 2006. The Alert indicates that the SEC staff may not require amended filings to correct Statement 158 transition provision application if:
-The misapplication does not result in a material misstatement of the financial statements; and
-The original presentation is sufficiently detailed enough that the user can determine: (a) the amount, if any, that should have been recorded in other comprehensive income for the change in additional minimum liability for the period, and (b) the transition adjustment amount that should have been recorded directly to accumulated other comprehensive income.
If amended filings are not required, a registrant would be required to correct the misapplication of Statement 158's transition guidance the next time the registrant files the prior-year financial statements. In addition, if the amount is quantitatively significant, the fact that the previously reported comprehensive income for the prior year was not accurately reported, as well as the corrected amount of comprehensive income, should be disclosed in the registrant's next interim filing.
Fair Value Measurement -- FASB to Discuss Whether to Defer the Effective Date of Statement 157 and Other Matters at October 17, 2007 Meeting
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As reported in its "Action Alert" publication, the FASB will meet on October 17, 2007 to discuss whether to defer the effective date of FASB Statement No. 157, Fair Value Measurements. Statement 157 defines fair value, establishes a framework for measuring fair value, and expands required disclosures about fair value measurements. Currently, Statement 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Early application is encouraged.
In addition to discussing the possible deferral of the effective date of Statement 157, the FASB will discuss the following matters at its October 17, 2007 meeting:
-Conceptual framework: elements and recognition;
-Accounting for leases;
-Statement 133 hedging;
-Agenda decision: deferral of the effective date of Statement 157; and
-Agenda decision: SOP 07-1 and Statement 159 implementation.
International Financial Reporting -- IASB Issues Proposed Improvements to IFRS
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The IASB has issued for public comment Exposure Draft (ED), Proposed Improvements to International Financial Reporting Standards. The ED includes proposed miscellaneous amendments to 25 International Financial Reporting Standards (IFRS). The proposal is part of the IASB's first annual improvements project which is an annual process to deal with non-urgent, minor amendments to IFRS. This annual process is intended to streamline the process for dealing with a collection of miscellaneous minor adjustments to IFRS by issuing a single ED for public comment rather than piecemeal changes throughout the year.
Comments on the ED are due January 11, 2008.
International Financial Reporting -- IASB Issues Agenda for October Meeting
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The IASB will discuss the following agenda items at its October 16-19, 2007 meeting:
-Annual Improvements Process
-Conceptual Framework
-Fair Value Measurements
-Fair Value Measurements [Education session]
-Financial Instruments
-Financial Instruments Puttable at Fair Value
-Financial Statement Presentation
-IFRIC proposal: Draft Amendment to IFRIC 11 and IFRS 2
-Leases
-Liabilities - Amendments to IAS 37
-Post-Employment Benefits
-Related Party Disclosures
-XBRL [Education session]
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:
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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Compilations and Reviews -- Statement on Standards for Accounting and Review Services No. 15
For detail, please contact info@zy-cpa.com
We have added a Miller GAAS Update Service that provides discussion and analysis of Statement on Standards for Accounting and Review Services (SSARS) No. 15, Elimination of Certain References to Statements on Auditing Standards and Incorporation of Appropriate Guidance into Statements on Standards for Accounting and Review Services. This Statement eliminates references to auditing literature from SSARSs and, where deemed appropriate, incorporates guidance similar to that originally referenced. Among other matters, SSARS 15 addresses: (a) emphasis-of-matter paragraphs in compilation and review reports; (b) subsequent discovery of facts existing at date of the accountant's report; and (c) financial statement titles under generally accepted accounting principles or an other comprehensive basis of accounting. SSARS 15 is effective for compilations and reviews of financial statements for periods ending on or after December 15, 2007. Early application is permitted.
Liquidity in the Markets -- AICPA Issues CAQ Alert and White Papers
For detail, please contact info@zy-cpa.com
As noted above in our Accounting and SEC Summaries, the CAQ has issued CAQ Alert 2007-51, "White Papers on Illiquidity in the Markets." The Alert includes three white papers that address accounting issues arising from or related to the current illiquid market conditions associated with the subprime mortgage-related markets. Specifically, the white papers address:
-Measurements of fair value in illiquid (or less liquid) markets;
-Consolidation of commercial paper conduits; and
-Accounting for underwriting and loan commitments.
The Alert is intended as an aid to auditors completing annual audits and quarterly reviews of public companies that are affected by the recent events in the subprime mortgage markets.
Defined Benefit Pension and Other Postretirement Plans -- AICPA Issues CAQ Alert
For detail, please contact info@zy-cpa.com
As noted above in our Accounting and SEC Summaries, the CAQ has issued CAQ Alert 2007-30, "Reexamining the Adoption of SFAS 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans." Originally issued in June 2007, the Alert discusses the SEC staff's intentions regarding companies who did not correctly implement the transition provisions of Statement 158. Calendar year end public companies were required to apply the transition provisions of Statement 158 beginning with their financial statement for the year ended December 31, 2006. The Alert indicates that the SEC staff may not require amended filings to correct Statement 158 transition provision application if:
-The misapplication does not result in a material misstatement of the financial statements; and
-The original presentation is sufficiently detailed enough that the user can determine: (a) the amount, if any, that should have been recorded in other comprehensive income for the change in additional minimum liability for the period, and (b) the transition adjustment amount that should have been recorded directly to accumulated other comprehensive income.
If amended filings are not required, a registrant would be required to correct the misapplication of Statement 158's transition guidance the next time the registrant files the prior-year financial statements. In addition, if the amount is quantitatively significant, the fact that the previously reported comprehensive income for the prior year was not accurately reported, as well as the corrected amount of comprehensive income, should be disclosed in the registrant's next interim filing.
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
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GOVERNMENT HEADLINES:
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Implementation Dates -- Reminder of Upcoming GASB Implementation Dates
For detail, please contact info@zy-cpa.com
We have added a Governmental GAAP Update Service that provides a reminder of upcoming implementation dates related to new GASB pronouncements or certain provisions within existing accounting guidance. Specifically, the Update addresses implementation dates regarding the following GASB pronouncements:
-GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers;
-GASB Statement No. 34, Basic Financial Statements-Management's Discussion and Analysis-for State and Local Governments;
-GASB Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans;
-GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions;
-GASB Statement No. 47, Accounting for Termination Benefits;
-GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues;
-GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations; and
-GASB Statement No. 50, Pension Disclosures.
GASB Report Issued -- Comments on Derivatives Proposal Sought
For detail, please contact info@zy-cpa.com
The September edition of the "GASB Report" has been issued and includes the following discussion items:
-GASB Calendar
-Who’s Who at the FAF
-Board Meeting Summary
-Comment Deadline on Derivatives Proposal Nearing
-Governmental Accounting Research System Available
-OPEB Implementers
The GASB is seeking comments on its Exposure Draft (ED), Accounting and Financial Reporting for Derivative Instruments. The ED would require that the fair value of derivatives and changes in such fair value from period-to-period, be reported in the financial statements of state and local governments. However, if a derivative is effectively hedging an identified risk, changes in the derivative's fair value would be deferred and reported in a government's balance sheet. The ED also proposes several disclosure requirements. If approved, the provisions within the ED would be effective for financial statements for periods beginning after June 15, 2009. Earlier application would be encouraged. Comments on the ED are due October 26, 2007. The GASB will hold a public hearing and roundtable regarding the ED on November 1, 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