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Accounting Research Manager(TM)
Weekly Summary of Developments
January 7-11, 2008
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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@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
Pension and Other Postretirement Benefit Obligations -- Discount Rates, Other Valuation Issues, and Enhanced Disclosures
Income Taxes -- Revisions and Additions to Interpretations of Accounting for Income Taxes
Securitized Mortgage Loans -- SEC Staff Publishes Letter Addressing Implications of Modifications Based on Recently Issued Framework
Statement 140 Implementation -- FASB to Discuss Statement 140 Implementation and Other Matters at Its January 16, 2008 Meeting
Statement 133 Implementation Issues -- FASB Issues Clarifying Guidance When Applying the Shortcut Method of Calculating Effectiveness
FASB Report Issued -- Recommended Organizational Changes and Other Matters Discussed
Business Combinations -- IASB Issues Revised IAS 27 and IFRS 3
International Financial Reporting -- IASB Issues Agenda for International Financial Reporting Interpretations Committee (IFRIC) Meeting on January 10-11, 2008
AcSEC Meeting Minutes -- AcSEC Discusses Not-for-Profit Guide and Considers Other Matters at January 8, 2008 Meeting
Auditing and Internal Controls Headlines
Audit Risk and Materiality in Conducting an Audit -- Unconditional and Presumptively Mandatory Requirements of SAS-107
Government Headlines
Federal Single Audit Sampling -- Recommendations for Improving Quality
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ACCOUNTING AND SEC HEADLINES:
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Pension and Other Postretirement Benefit Obligations -- Discount Rates, Other Valuation Issues, and Enhanced Disclosures
For detail, please contact info@zy-cpa.com
We have prepared a hot topic that discusses discount rates, other valuation issues, and enhanced disclosures for pension and other postretirement benefit obligations (OPEBs). Specifically, our hot topic discusses the appropriate discount rate that companies should use when valuing their pension and OPEBs. In addition, the hot topic discusses other valuation considerations and recent activities at the FASB and views expressed by the SEC staff as they relate to pension and OPEB accounting.
See our hot topic for complete details.
Income Taxes -- Revisions and Additions to Interpretations of Accounting for Income Taxes
For detail, please contact info@zy-cpa.com
We have updated our publication Accounting for Income Taxes-Interpretations of FASB Statement 109. Our publication has been updated primarily to reflect the following items or topics:
-The repeal of the Michigan single business tax and enactment of a modified gross receipts tax;
-Changes to the Mexican tax system that generally take effect January 1, 2008;
-Clarification of when certain tax legislation may require application of FASB Statement No. 109, Accounting for Income Taxes; and
-Clarification of how an enterprise should account for interest income related to uncertain tax positions.
In addition, we have also updated the "Recent Developments" section of this publication to provide the status of projects and related activities at the FASB that may affect the accounting for income taxes.
See our Literature Update for complete details.
Securitized Mortgage Loans -- SEC Staff Publishes Letter Addressing Implications of Modifications Based on Recently Issued Framework
For detail, please contact info@zy-cpa.com
The SEC staff published a letter that addresses whether certain loan modifications give rise to accounting implications under FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Specifically, the letter provides guidance on the implications of modifications to securitized subprime adjustable rate loans (ARMs) made as a result of the recently issued "Streamlined Foreclosure and Loss Avoidance Framework for Securitized Subprime Adjustable Rate Loans," from the American Securitization Forum (ASF). The letter indicates that the SEC's Office of the Chief Accountant (OCA) will not object to continued status as a Qualified Special Purpose Entity (QSPE) under Statement 140 if Segment 2 (as defined) subprime ARMs are modified pursuant to the specific screening criteria in the ASF framework. In addition, given the unique nature of the contemplated modifications and other loss mitigation activities that are recommended in the ASF framework, OCA expects registrants to provide sufficient disclosures in filings with the Commission regarding the effect that the ASF Framework has had on QSPEs that hold subprime ARM loans. The letter also includes several disclosure requirements OCA expects registrants with securitized ARMs to consider providing.
OCA has requested that the FASB immediately address the issues that have arisen in the application of the QSPE guidance in Statement 140. Specifically, OCA has requested that the FASB complete its project addressing the guidance in paragraphs 9(b) and 35-55 of Statement 140 in order to be effective no later than years beginning after December 31, 2008.
Statement 140 Implementation -- FASB to Discuss Statement 140 Implementation and Other Matters at Its January 16, 2008 Meeting
For detail, please contact info@zy-cpa.com
As reported in its "Action Alert" publication, at its January 16, 2008 meeting, the FASB plans to discuss implementation issues associated with repurchase financing agreements under Statement 140. Specifically, the FASB will discuss significant issues raised in comment letters received on proposed FASB Staff Position (FSP) FAS 140-d, "Accounting for Transfers of Financial Assets and Repurchase Financing Transactions." The FASB is expected to focus its discussion on the: (a) operationality of the revised scope; (b) retention of the rebuttable presumption approach; (c) recourse criterion; and (d) effective date and transition provisions.
Statement 133 Implementation Issues -- FASB Issues Clarifying Guidance When Applying the Shortcut Method of Calculating Effectiveness
For detail, please contact info@zy-cpa.com
The FASB has issued guidance in the form of Derivative Implementation Group (DIG) Issue E23, "Issues Involving the Application of the Shortcut Method under Paragraph 68." This DIG issue makes the following clarifications regarding the application and permitted use of the shortcut method:
-Paragraph 68(b) is met for an interest rate swap that has a non-zero fair value at the inception of the hedging relationship if: (a) entered into at inception for a transaction price of zero; and (b) non-zero value is the result of a bid-ask spread in the entity's primary market under FASB Statement No. 157, Fair Value Measurements; and
-The shortcut method may be used for a qualifying fair value hedge when the relationship is designated on the trade date of both the swap and the hedged item even though the hedging item is not recognized for accounting purposes, provided that the period of time between the trade date and settlement date of the hedging item is within established conventions for that marketplace.
FASB Report Issued -- Recommended Organizational Changes and Other Matters Discussed
For detail, please contact info@zy-cpa.com
The December 2007 edition of the "FASB Report" has been issued and includes discussion of the following topics or items of interest:
-Increasing Effectiveness in a Changing Environment: Constituents Asked to Provide Comments on Trustee Recommendations to Improve FAF, FASB, and GASB;
-Financial Accounting Foundation Board of Trustees Announces 2008 Officers and Appointments;
Q&A with Jules M. Cassel;
-Upcoming FASB Guidance and Ongoing FASB Projects of Interest to the Not-for-Profit Sector;
-FASB at the Podium.
The Report discusses the recent recommendations made to improve the overall governance, structure, and operation of the Financial Accounting Foundation, FASB, and GASB. The recommendations are intended to better enable these organizations to meet their responsibilities to the public interest by becoming more responsive to their constituents. Comments on the recommendations are due by February 10, 2008.
Business Combinations -- IASB Issues Revised IAS 27 and IFRS 3
IAS 27: For detail, please contact info@zy-cpa.com
IFRS 3: For detail, please contact info@zy-cpa.com
The IASB has issued amendments to both IAS 27, Consolidated and Separate Financial Statements, and IFRS 3, Business Combinations. The amendments represent the culmination of a joint project with the FASB. The amendments to IAS 27 and IFRS 3 are intended to result in accounting requirements consistent with FASB Statement No. 141(Revised 2007), Business Combinations and FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51. Significant provisions or changes within the amendments include:
-For step acquisitions, measuring the fair value of every asset and liability at each step is no longer required;
-Acquisition costs are expensed as incurred;
-Contingent consideration is recognized at the acquisition date as a liability;
-Changes in a parent's ownership interest in a subsidiary that do not result in loss of control, must be accounted for as equity transactions;
-Business combinations involving only mutual entities and by contract alone are now within the scope of IAS 27 and IFRS 3; and
-Guidance on how to measure any gain or loss and any investment retained upon losing control of a subsidiary.
The amended standards must be applied for annual periods beginning on or after July 1, 2009. Earlier application is permitted if both IAS 27 and IFRS 3 are both applied.
International Financial Reporting -- IASB Issues Agenda for International Financial Reporting Interpretations Committee (IFRIC) Meeting on January 10-11, 2008
For detail, please contact info@zy-cpa.com
The IASB has issued the agenda for the IFRIC January 10-11, 2008 meeting which includes:
-D21 Real Estate Sales - Analysis of comment letters and first redeliberations;
-Review of Tentative Agenda Decision published in September IFRIC Update;
-Review of Tentative Agenda Decisions published in November IFRIC Update;
-Staff Recommendations for Tentative Agenda Decisions; and
-Administrative Session.
AcSEC Meeting Minutes -- AcSEC Discusses Not-for-Profit Guide and Considers Other Matters at January 8, 2008 Meeting
For detail, please contact info@zy-cpa.com
We have prepared minutes of the AcSEC meeting held on January 8, 2008. At this meeting, AcSEC considered the following matters or topics:
-Revisions to the Audit and Accounting Guide (AAG), Not-for-Profit Organizations;
-Statement of Position (SOP) 07-1, Implementation Guidance, Real Estate Investment Funds;
-Comment letter, Proposed FASB Staff Position (FSP) FAS 142-f, "Determination of the Useful Life of Intangible Assets"; and
-Other information, "Chair's Report."
AcSEC discussed implementation guidance for real estate funds relating to SOP 07-1 even though the FASB has proposed deferring the effective date of this standard indefinitely. AcSEC believes this guidance may be useful in the future in other updates or projects.
See our minutes for complete details.
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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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Audit Risk and Materiality in Conducting an Audit -- Unconditional and Presumptively Mandatory Requirements of SAS-107
For detail, please contact info@zy-cpa.com
We have added a GAAS Update Service that discusses the unconditional and presumptively mandatory requirements of AICPA Statement on Auditing Standards (SAS) No. 107, Audit Risk and Materiality in Conducting an Audit. Among other matters, the provisions of SAS 107 require the auditor to: (a) consider audit risk in relation to the relevant assertions related to individual account balances, classes of transactions, and disclosures and at the overall financial statement level; (b) perform risk assessment procedures to assess the risks of material misstatement at both the financial statement and relevant assertion levels; (c) perform substantive procedures for all relevant assertions related to material account balances, transaction classes and disclosures; (d) consider whether, in the face of identified misstatements, the overall audit strategy and audit plan need to be revised; and (e) request management to review the assumptions and methods used in developing accounting estimates, when likely misstatements are identified involving differences in estimates.
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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Federal Single Audit Sampling -- Recommendations for Improving Quality
For detail, please contact info@zy-cpa.com
We have added a Governmental GAAP Update Service that discusses the recently issued "Report on National Single Audit Sampling Project" issued by the President's Council on Integrity and Efficiency. The Report identified a number of audit and reporting deficiencies by independent public accountants in the audits of federal programs and presented the following three broad recommendations to improve the quality of single audit reports:
-Revise and improve single audit standards, criteria, and guidance;
-Establish a minimum CPE requirement for auditors to be able to perform single audits; and
-Review and improve the disciplinary process in place to address inadequate audits and failure to meet minimum CPE requirements.
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