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Accounting Research
Manager(TM)
Weekly Summary of
Developments
August 3-7, 2009
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Accounting Research
Manager subscriber,
The Accounting Research
Manager database now contains this week's weekly summary of developments. Click
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If you do not have immediate
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of this week's Weekly Summary.
Accounting and SEC
Headlines
Fair Value Measurements -- FASB Discusses Improving Disclosures
about Fair Value Measurements and Other Matters
SEC Reporting -- SEC Staff Updates Financial Reporting
Manual
Rights Issues -- IASB Issues Proposal on the
Classification of Rights Issues
Financial Liabilities -- IASB Issues Proposed IFRIC
Interpretation on Extinguishing Financial Liabilities with Equity Instruments
IASB Update -- IASB Discusses Post-Employment
Benefits
IASB Update -- IASB Discusses Financial Instruments
and Other Matters
IFRIC Update -- Extinguishing Financial Liabilities
and Other Matters Discussed
Not-for-Profit
Organizations -- AICPA
Publishes Financial Reporting Alert
Auditing and Internal
Controls Headlines
Not-for-Profit
Organizations -- AICPA
Publishes Financial Reporting Alert
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ACCOUNTING AND SEC HEADLINES:
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Fair Value Measurements --
FASB Discusses Improving Disclosures about Fair Value Measurements and Other
Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on August 5,
2009, and discussed the following items:
-Improving disclosures about
fair value measurements;
-Applying fair value to
interests in alternative investments; and
-Oil and gas disclosures.
The FASB continued its
discussion of improving disclosures about fair value measurements and decided:
-To direct its staff to draft
a proposal aimed at improving disclosures about fair value measurements and
that would clarify certain existing required disclosures about fair value
measurements and propose several new disclosures;
-If a change in one or more
of the significant inputs to a Level 3 fair value measurement would
significantly change the fair value, the reporting entity would state that fact
and disclose the effect of those changes;
-A reporting entity would
disclose information about significant transfers in and out of Levels 1 and 2
and the reasons for the transfers;
-Information about purchases,
sales, issuances, and settlements, included in the reconciliation of Level 3
fair value measurements, would be presented on a gross basis rather than a net
basis;
-To provide guidance on the
meaning of the term "class" to assist in making required fair value
measurement disclosures for each major category;
-To clarify that the
disclosures about the inputs used are required for both recurring and nonrecurring
fair value measurements and that those disclosures are required for fair value
measurements that fall in both Level 2 and Level 3; and
-The proposal to be issued
would be effective for reporting periods (annual or interim) ending after
December 15, 2009, except for Level 3 sensitivity disclosures, which would be
effective for reporting periods (annual or interim) ending after March 15,
2010.
The FASB also deliberated
issues raised by respondents to proposed FASB Staff Position (FSP) FAS 157-g, Estimating
the Fair Value of Investments in Investment Companies That Have Calculated Net
Asset Value per Share in Accordance with the AICPA Audit and Accounting Guide,
Investment Companies, and decided:
-To affirm its earlier
decision that an investment with a readily determinable fair value should be
excluded from the scope of any final guidance and that such guidance would also
apply to other specific types of investments in entities;
-To affirm its earlier
decision that an entity would be permitted, rather than required, as a
practical expedient, to estimate the fair value of an investment within the
scope of any final guidance using the net asset value of the investment (or its
equivalent) if the net asset value is calculated consistent with the requirements
of FASB Accounting Standards CodificationTM
(Codification) Topic 946, Financial Services - Investment Companies, as
of the measurement date;
-An entity would be permitted
to apply the practical expedient to investments acquired when there is a difference
between the transaction price and the net asset value and recognize a gain or
loss in earnings, but not required to disclose separately such gains or losses;
and
-An entity would be permitted
to use net asset value as a practical expedient on an investment-by-investment
basis and be required to apply the practical expedient consistently to its
entire position in a particular investment.
The FASB also decided to
amend Codification Topic 932, Extractive Activities - Oil and Gas, to
align the existing GAAP disclosure and reserves calculation requirements with
the SEC's final rule, Modernization of the Oil and Gas Reporting
Requirements.
SEC Reporting -- SEC Staff
Updates Financial Reporting Manual
For detail, please contact info@zy-cpa.com
The staff in the SEC’s (SEC)
Division of Corporation Finance (Corp Fin) has updated its Financial
Reporting Manual, as of June 30, 2009. This manual represents informal
guidance prepared for use by Corp Fin staff. Corp Fin has made this manual
public as readers may find the guidance useful in preparing filings with the
SEC. Updates in this edition of the manual include the following areas (identified
below in parentheses by section number in the manual):
-Development stage companies
(section 1180);
-Age of financial statements
requirements (section 1220);
-Changes in fiscal years
(section 1360);
-Required separate financial
statements of equity method investees (section 2405);
-Projections and financial
forecasts (section 3500); and
-Compensation issues (section
7500).
In addition to the updates to
the areas identified above, the Corp Fin staff added “Topic 4: Independent
Accountants’ Involvement,” which includes discussion on topics such as
qualifications of accountants, accountants’ reports, report on internal control
over financial reporting, and changes in accountants.
Rights Issues -- IASB
Issues Proposal on the Classification of Rights Issues
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The IASB has issued for
public comment an exposure draft, Classification of Rights Issues. This
proposal would amend IAS 32, Financial Instruments: Presentation, and
seeks to clarify the classification of instruments that give the holders the
right to acquire an entity’s own equity instruments at a fixed price (rights
issue) when that price is stated in a currency other than the entity’s
functional currency. Under this proposal, if such rights are issued pro rata to
an entity’s existing shareholders for a fixed amount of currency, they should
be classified as equity regardless of the currency in which the exercise price
is denominated.
Comments on this proposal are
due September 7, 2009.
Financial Liabilities --
IASB Issues Proposed IFRIC Interpretation on Extinguishing Financial
Liabilities with Equity Instruments
For detail, please contact info@zy-cpa.com
The IASB has issued for
public comment a proposed International Financial Reporting Interpretations
Committee (IFRIC) Draft Interpretation D25, Extinguishing Financial
Liabilities with Equity Instruments. This proposal addresses the accounting
by an entity that renegotiates the terms of a financial liability and issues
equity instruments to the creditor to extinguish the liability fully or
partially. This proposal does not address the accounting by the creditor. Under
this proposal:
-The entity’s equity
instruments are part of any "consideration paid" to extinguish the
financial liability;
-The equity instruments are
measured at either their fair value or the fair value of the financial
liability extinguished, whichever is more reliably determinable; and
-Any difference between the
carrying amount of the financial liability extinguished and the initial
measurement amount of these equity instruments is included in the entity’s
profit or loss for the period.
Comments on this proposal are
due October 5, 2009.
IASB Update -- IASB
Discusses Post-Employment Benefits
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As reported in its "IASB
Update" publication, the IASB met on August 4, 2009, and discussed post-employment
benefits. Specifically, the IASB discussed the transition requirements for its
proposed exposure draft of amendments to the discount rate for post-employment
benefit obligations and decided that:
-An entity would be required
to apply the guidance in the proposal prospectively;
-The amount resulting from
the change in accounting policy is recognized directly in retained earnings;
-Accumulated unrecognized
gains or losses are not affected by the transition proposals;
-The guidance in the proposal
would be applied from the beginning of the period in which the entity changes
its accounting policy; and
-Not to amend IFRS 1, First-time
Adoption of International Financial Reporting Standards.
IASB Update -- IASB
Discusses Financial Instruments and Other Matters
For detail, please contact info@zy-cpa.com
As reported in its "IASB
Update" publication, the IASB met on July 21-22, 2009, and discussed the
following items:
-Classification of rights
issues;
-Consolidation;
-Discontinued operations;
-IFRIC update;
-Insurance contracts;
-Liabilities - amendments to
IAS 37, Provisions, Contingent Liabilities and Contingent Assets;
-Post-employment benefits;
-Related party disclosures;
-Revenue recognition;
-IASB's
technical plan; and
-Annual improvements project.
IFRIC Update --
Extinguishing Financial Liabilities and Other Matters Discussed
For detail, please contact info@zy-cpa.com
As reported in the IASB's "IFRIC Report" publication, IFRIC met on
August 4, 2009, and discussed extinguishing financial liabilities with equity instruments. IFRIC reviewed aspects of its proposed
interpretation on this matter which is discussed above.
Not-for-Profit
Organizations -- AICPA Publishes Financial Reporting Alert
For detail, please contact info@zy-cpa.com
The AICPA has published a
Financial Reporting Alert, Not-for-Profit Entities: Accounting Issues and
Risks - 2009. This Alert is intended to provide accountants servicing
not-for-profit organizations with an overview of recent economic, technical,
regulatory, and professional developments that may affect financial management
and reporting. The Alert is also designed to be used by members of an
organization’s financial management and audit committee to identify and
understand current accounting and regulatory developments affecting the
organization’s financial reporting. The Alert also includes a "Resource
Central" section that lists additional tools and(or)
resources that may be of benefit to those involved in financial reporting for
not-for-profit organizations.
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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Not-for-Profit
Organizations -- AICPA Publishes Financial Reporting Alert
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, the AICPA has published a Financial Reporting
Alert, Not-for-Profit Entities: Accounting Issues and Risks - 2009. This
Alert is intended to provide accountants servicing not-for-profit organizations
with an overview of recent economic, technical, regulatory, and professional
developments that may affect financial management and reporting. The Alert is
also designed to be used by members of an organization’s financial management
and audit committee to identify and understand current accounting and
regulatory developments affecting the organization’s financial reporting. The
Alert also includes a "Resource Central" section that lists
additional tools and(or) resources that may be of
benefit to those involved in financial reporting for not-for-profit
organizations.
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