===================================================
Accounting Research
Manager(TM)
Weekly Summary of
Developments
March 29 - April 2, 2010
===================================================
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
Repurchase Agreements -- SEC Requests Repurchase Accounting
Treatment from Companies
SEC Disclosures -- Updated Checklists Published
GAAP Disclosures -- Updated U.S. GAAP Checklists Published
Financial Reporting
Standards -- Comparison
between U.S. GAAP and IFRS Published
FASB Meeting -- FASB Ratifies March 18, 2010 EITF
Decisions and Discusses Ongoing Projects
Communications with Audit
Committees -- PCAOB
Issues Proposed Auditing Standard
Auditing and Internal
Controls Headlines
Communications with Audit
Committees -- PCAOB
Issues Proposed Auditing Standard
Government Headlines
Financial Reporting Entity -- GASB Issues Exposure Draft
=============================
ACCOUNTING AND SEC HEADLINES:
=============================
Repurchase Agreements --
SEC Requests Repurchase Accounting Treatment from Companies
For detail, please contact info@zy-cpa.com
The SEC announced that in
March 2010, its Division of Corporation Finance (Corp Fin) sent letters to
certain public companies requesting information about transactions, such as
repurchase agreements, involving the transfer of financial assets with an
obligation to repurchase the transferred assets. The information requested in a
letter entitled, “Sample Letter Sent to Public Companies Asking for Information
Related to Repurchase Agreements, Securities Lending Transactions, or Other
Transactions Involving the Transfer of Financial Assets,” includes, among other
items:
-The amount of repurchase
agreements or other securities lending transactions accounted for as sales at
each quarterly balance sheet date for each of the past three years;
-A detailed analysis
supporting the use of sales accounting treatment for those repurchase
agreements or other securities lending transactions;
-The business reasons for
structuring the repurchase agreements as sales transactions as opposed to
collateralized financings;
-An explanation of any change
in the original accounting for repurchase agreements within the past three
years and a description of the effect of the change on the companies’ financial
statements; and
-If repurchase agreements or
securities lending transactions were not disclosed in Management’s Discussion
and Analysis of Results of Operations and Financial Condition, an explanation
of why such disclosure was not made.
The letter, made available by
the SEC in the form of a “Sample Letter,” asks that the companies provide a
written response to all questions within ten business days from the date of the
letter. Corp Fin made these inquiries as a result of reviews it made of
registrant Form 10-Ks.
SEC Disclosures -- Updated
Checklists Published
For detail, please contact info@zy-cpa.com
We have updated the following
SEC disclosure related checklists through March 31, 2010:
-Financial Statement
Disclosures - This checklist outlines the required SEC disclosures for
financial statements included in 1934 and 1933 Act domestic filings that are
incremental to U.S. GAAP. The checklist is organized by topic.
-Management's Discussion
and Analysis - This checklist outlines the required SEC disclosures for
MD&A included in 1934 and 1933 domestic filings, including Forms 10-K and
S-1.
-Incremental
Certifications, Disclosures, and Reporting Mandated by Sarbanes-Oxley -
This checklist outlines the certification, disclosure, and reporting
requirements resulting from the SEC rules mandated by the Sarbanes-Oxley Act of
2002.
-SEC Form 10-Q Checklist
- This checklist is for financial and nonfinancial
information included in Form 10-Q and is organized by form item number.
Among the revisions we made
to these checklists was to reference applicable disclosure considerations
highlighted in the SEC’s Interpretive Release, Commission Guidance Regarding
Disclosure Related to Climate Change, as well as additional guidance
relating to non-GAAP financial measures. We have also incorporated the guidance
provided by the SEC staff in an announcement, Foreign Currency Issues.
In addition, we have reflected in our checklists reference to the March 2010
“Sample Letter” discussed above.
See our Literature Update for
complete details.
GAAP Disclosures --
Updated
For detail, please contact info@zy-cpa.com
We have updated the General
U.S. GAAP Financial Statement Disclosures Checklist through March 31, 2010.
This checklist includes changes made by the FASB to the FASB Accounting
Standards CodificationTM
(Codification) since the issuance of our checklist dated December 31, 2009.
Specifically, this checklist has been updated for the following changes:
-Accounting Standards Update
(ASU) No. 2010-06, Fair Value Measurements and Disclosures (Topic 820) -
Improving Disclosures about Fair Value Measurements;
-ASU No. 2010-08, Technical
Corrections to Various Topics;
-ASU No. 2010-09, Subsequent
Events (Topic 855) - Amendments to Certain Recognition and Disclosure
Requirements;
-ASU No. 2010-11, Derivatives
and Hedging (Topic 815) - Scope Exception Related to Embedded Credit
Derivatives; and
-EITF Issue No. 08-9,
“Milestone Method of Revenue Recognition,” (the FASB approved this consensus on
March 31, 2010, and will incorporate this guidance in a forthcoming ASU).
We have also updated the General
U.S. GAAP Interim Financial Statement Disclosures Checklist through March
31, 2010, to reflect the interim disclosure requirements as of that date.
See our Literature Update for
complete details.
Financial Reporting
Standards -- Comparison between
For detail, please contact info@zy-cpa.com
We have published Comparison
between U.S. GAAP and International Financial Reporting Standards. This
publication highlights some of the more significant U.S. GAAP and IFRS
requirements as well as the major similarities and differences between current
U.S. GAAP and IFRS. It should assist those new to IFRS in gaining an
appreciation of their major requirements and how these differ from requirements
in the
See our Literature Update for
complete details.
FASB Meeting -- FASB
Ratifies March 18, 2010 EITF Decisions and Discusses Ongoing Projects
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB met on March 31,
2010, and ratified decisions made by the EITF at its meeting held on March 18,
2010. Specifically, the FASB ratified the following final consensuses that will
now be documented in forthcoming updates to the FASB Accounting Standards CodificationTM:
-EITF Issue No. 08-9,
“Milestone Method of Revenue Recognition”;
-EITF Issue No. 09-B,
“Consideration of an Insurer’s Accounting for Majority-Owned Investments When
the Ownership Is through a Separate Account”;
-EITF Issue No. 09-F, “Casino
Jackpot Liabilities”;
-EITF Issue No. 09-I, “Effect
of a Loan Modification When the Loan Is Part of a Pool That Is Accounted for as
a Single Asset”; and
-EITF Issue No. 09-J, “Effect
of Denominating the Exercise Price of a Share-Based Payment Award in the Currency
of the Market in Which the Underlying Equity Security Trades.”
In addition, the FASB
ratified the following consensuses-for-exposure reached at the March 18, 2010
EITF meeting:
-EITF Issue No. 09-K, “Health
Care Entities: Presentation of Insurance Claims and Related Insurance
Recoveries”; and
-EITF Issue No. 09-L, “Health
Care Entities: Measuring Charity Care for Disclosure.”
For additional information on
these decisions, consult our previously issued EITF Flash Report.
At this meeting, the FASB also
discussed and reached decisions related to its ongoing projects, including the
following:
-Accounting for credit
impairments of financial instruments for which certain changes in fair value
may be recognized in other comprehensive income;
-Disclosures about financial
assets and liabilities;
-The accounting model for
management’s going concern assessment; and
-Proposed changes to
Codification Topic 820, Fair Value Measurements and Disclosures.
Communications with Audit
Committees -- PCAOB Issues Proposed Auditing Standard
For detail, please contact info@zy-cpa.com
The PCAOB proposed for
comment an auditing standard, Communications with Audit Committees, and
a series of related amendments to its interim standards.
The proposal addresses
requirements for auditors to communicate with audit committees of public
company boards of directors. The proposal also addresses a number of other issues,
including the importance of accounting judgments and estimates in financial
reporting.
The proposed standard
includes a requirement for the auditor to establish a mutual understanding of
the terms of the audit engagement with the audit committee and to document that
understanding in an engagement letter. The proposal also includes requirements
relating to:
-Communication of an overview
of the audit strategy, including: (a) a discussion of significant risks;
(b) the use of the internal audit function; and (c) the roles,
responsibilities, and location of firms participating in the audit;
-Communication regarding
critical accounting policies, practices, and estimates;
-Communication regarding the
auditor’s evaluation of a company’s ability to continue as a going concern; and
-Evaluation by the auditor of
the adequacy of the two-way communications with the audit committee.
The proposed auditing
standard would supersede PCAOB interim standard AU sec. 380, Communication
with Audit Committees, and AU sec. 310, Appointment of the Independent
Auditor, and amend a number of other interim standards. Any new auditing
standard and amendments to the interim auditing standards that are adopted by
the PCAOB will be submitted to the SEC for approval. Comments on the proposed
standard and amendments are due by May 28, 2010.
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 AND INTERNAL
CONTROLS HEADLINES:
=======================================
Communications with Audit
Committees -- PCAOB Issues Proposed Auditing Standard
For detail, please contact info@zy-cpa.com
As discussed
above in our Accounting and SEC Summaries, the PCAOB proposed for comment an auditing standard,
Communications with Audit Committees, and a series of related amendments to
its interim standards.
The proposal addresses
requirements for auditors to communicate with audit committees of public
company boards of directors. The proposal also addresses a number of other
issues, including the importance of accounting judgments and estimates in
financial reporting.
The proposed standard
includes a requirement for the auditor to establish a mutual understanding of
the terms of the audit engagement with the audit committee and to document that
understanding in an engagement letter. The proposal also includes requirements
relating to:
-Communication of an overview
of the audit strategy, including: (a) a discussion of significant risks;
(b) the use of the internal audit function; and (c) the roles,
responsibilities, and location of firms participating in the audit;
-Communication regarding
critical accounting policies, practices, and estimates;
-Communication regarding the
auditor’s evaluation of a company’s ability to continue as a going concern; and
-Evaluation by the auditor of
the adequacy of the two-way communications with the audit committee.
The proposed auditing
standard would supersede PCAOB interim standard AU sec. 380, Communication
with Audit Committees, and AU sec. 310, Appointment of the Independent
Auditor, and amend a number of other interim standards. Any new auditing
standard and amendments to the interim auditing standards that are adopted by
the PCAOB will be submitted to the SEC for approval. Comments on the proposed
standard and amendments are due by May 28, 2010.
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:
======================
Financial Reporting Entity
-- GASB Issues Exposure Draft
For detail, please contact info@zy-cpa.com
The GASB has issued an
Exposure Draft of a proposed statement, The Financial Reporting Entity,
an amendment of GASB Statements No. 14 and No. 34. The Exposure Draft would
revise GASB Statement No. 14, The Financial Reporting Entity, and GASB
Statement No. 34, Basic Financial Statements - and Management’s Discussion
and Analysis - for State and Local Governments, to improve financial
reporting of component units.
Component units are legally
separate organizations that state and local governments include in their
financial reports. The proposal would modify the existing criteria for
inclusion of organizations that are “fiscally dependent” on a government by
adding a requirement that the potential component unit and the primary
government also have a financial benefit or burden relationship. In cases where
the government determines it would be misleading to exclude an organization
that does not meet the financial accountability concept from its financial
reports, the proposed statement would clarify the manner in which that
determination should be made.
As proposed, the guidance
would be effective for financial statements for periods beginning after June
15, 2012, with earlier application encouraged. Comments on this proposal are
due by June 30, 2010.
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