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Accounting Research Manager(TM)
Weekly Summary of Developments
June 21-25, 2010
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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

Revenue Recognition -- FASB Issues Proposal on Revenue from Contracts with Customers
Variable Interest Entities -- Interpretation Updated
PCAOB Firm Reporting -- PCAOB Publishes Staff Q&As on Firm Annual Reports
Leases -- FASB Discusses Leases in a Business Combination
Revenue Recognition -- IASB Issues Proposal on Revenue from Contracts with Customers

Auditing and Internal Controls Headlines

Audit Evidence -- Clarified Auditing Standard Discussed
PCAOB Firm Reporting -- PCAOB Publishes Staff Q&As on Firm Annual Reports

Government Headlines

Bankruptcies -- GASB 58 Implementation Date Discussed

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ACCOUNTING AND SEC HEADLINES:
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Revenue Recognition -- FASB Issues Proposal on Revenue from Contracts with Customers
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The FASB has issued for public comment an Exposure Draft (ED) of a proposed Accounting Standards Update (ASU), Revenue Recognition (Topic 605): Revenue from Contracts with Customers. This proposed ASU specifies the principles that an entity would apply to report information about the amount, timing, and uncertainty of revenue and cash flows arising from its contracts to provide goods or services to customers. The core principle in this ED would require an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it receives, or expects to receive, in exchange for those goods or services. Specifically, under this ED an entity would:

-Identify the contract(s) with a customer;
-Identify the separate performance obligations in the contract;
-Determine the transaction price;
-Allocate the transaction price to the separate performance obligations; and
-Recognize revenue when the entity satisfies each performance obligation.

The guidance in this ED was developed jointly with the IASB.

Comments on this proposed ASU are due October 22, 2010.

Variable Interest Entities -- Interpretation Updated
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We have updated our interpretation, Variable Interest Entities - Accounting Considerations, which provides interpretive guidance on the Variable Interest Entities Subsections of Subtopic 810-10 of FASB Accounting Standards Codification^TM (Codification) Topic 810, Consolidation. Among the changes made, we added an appendix illustrating the reporting and disclosure requirements related to variable interest entities.

See our Literature Update for complete details.

PCAOB Firm Reporting -- PCAOB Publishes Staff Q&As on Firm Annual Reports
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The PCAOB has published Staff Questions and Answers (Q&As) concerning a registered firm’s obligation to file its annual report on Form 2. Beginning in 2010, all firms that are registered with the PCAOB as of March 31 of a particular year must, by June 30 of that year, file an annual report on Form 2 covering the 12-month period ending March 31. Items to be reported annually include, among other things, information about audit reports issued, disciplinary histories of new personnel, and certain information about fees billed to issuer audit clients for various categories of services. PCAOB rules on annual reporting became effective on December 31, 2009. Therefore, all firms registered with the PCAOB on March 31, 2010, must file an annual report on Form 2 by June 30, 2010.

Topics addressed in the Q&As include:

-An overview of the requirements relating to Form 2;
-A discussion of the information required to be reported on Form 2;
-Guidance on completing and amending Form 2;
-Information on requesting confidential treatment and withholding information on the basis of non-U.S. legal restrictions; and
-A discussion of the mechanics of reporting through the PCAOB web-based system.

Staff Q&As do not constitute PCAOB rules, nor have they been approved by its members.

Leases -- FASB Discusses Leases in a Business Combination
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As reported in its "Summary of Board Decisions" publication, the FASB met on June 23, 2010, and discussed aspects of its current project on accounting for leases. Specifically, the FASB discussed consequential amendments to Codification Topic 805, Business Combinations, and tentatively decided that all assets and liabilities arising from lease contracts acquired in a business combination should be measured in accordance with any proposed lease requirements to be issued. An acquirer should measure those assets and liabilities as if the lease arrangement was a new lease arrangement.

The FASB and IASB also held a joint meeting on June 23, 2010, and discussed insurance contracts.

Revenue Recognition -- IASB Issues Proposal on Revenue from Contracts with Customers
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The IASB has issued for public comment an ED, Revenue from Contracts with Customers. This ED would replace: (a) IAS 18, Revenue; (b) IAS 11, Construction Contracts; and (c) related interpretations. The core principle of the guidance in this ED is that an entity should recognize revenue from contracts with customers when it transfers goods or services to the customer in the amount of consideration the entity receives, or expects to receive, from the customer. According to the IASB, this ED would improve IFRSs by:

-Removing inconsistencies in existing requirements;
-Providing a more robust framework for addressing revenue recognition issues;
-Improving comparability across companies, industries and capital markets;
-Requiring enhanced disclosure; and
-Clarifying the accounting for contract costs.

The guidance in this ED was developed jointly with the FASB.

Comments on this proposal are due October 22, 2010.

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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Audit Evidence -- Clarified Auditing Standard Discussed
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We have added a GAAS Update Service that provides discussion and analysis of a clarified Statement on Auditing Standards (SAS), Audit Evidence, resulting from the AICPA’s Clarity Project. The redrafted SAS supersedes SAS 106 (AU Section 326) of the same name and is effective for audits of financial statements for periods ending on or after December 15, 2012. The redrafted SAS explains what constitutes audit evidence and addresses the responsibility of the auditor to design and perform audit procedures to obtain sufficient appropriate audit evidence to enable the auditor to draw reasonable conclusions as a basis for his or her opinion on the audited financial statements. The redrafted version of SAS 106 is considerably condensed compared to the original version and has reorganized some of the content of the original SAS 106 into other related SASs.

The AICPA’s Clarity Project is intended to make existing U.S. generally accepted auditing standards (GAAS) easier to understand, apply, and move toward converging U.S. GAAS with International Standards on Auditing issued by the International Auditing and Assurance Standards Board. For further information on the AICPA's Clarity Project, see our previously published discussion and analysis in our publication "A Closer Look."

PCAOB Firm Reporting -- PCAOB Publishes Staff Q&As on Firm Annual Reports
For detail, please contact info@zy-cpa.com

As discussed above in our Accounting and SEC Summaries, the PCAOB has published Staff Questions and Answers (Q&As) concerning a registered firm’s obligation to file its annual report on Form 2. Beginning in 2010, all firms that are registered with the PCAOB as of March 31 of a particular year must, by June 30 of that year, file an annual report on Form 2 covering the 12-month period ending March 31. Items to be reported annually include, among other things, information about audit reports issued, disciplinary histories of new personnel, and certain information about fees billed to issuer audit clients for various categories of services. PCAOB rules on annual reporting became effective on December 31, 2009. Therefore, all firms registered with the PCAOB on March 31, 2010, must file an annual report on Form 2 by June 30, 2010.

Topics addressed in the Q&As include:

-An overview of the requirements relating to Form 2;
-A discussion of the information required to be reported on Form 2;
-Guidance on completing and amending Form 2;
-Information on requesting confidential treatment and withholding information on the basis of non-U.S. legal restrictions; and
-A discussion of the mechanics of reporting through the PCAOB web-based system.

Staff Q&As do not constitute PCAOB rules, nor have they been approved by its members.

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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Bankruptcies -- GASB 58 Implementation Date Discussed
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We have added a Governmental GAAP Update Service that discusses GASB Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies, including its scope and applicability, measurement and recognition requirements, and example application, from the perspective of the governmental entity. GASB 58 establishes the requirements for: (a) recognizing and measuring the effects of the bankruptcy process on assets and liabilities; and (b) classifying the changes in those items and the related costs. GASB 58 topics covered in this Update are:

-Scope and applicability;
-Measurement and recognition requirements; and
-Disclosure requirements.

GASB 58 is effective for financial statements for periods beginning on or after June 15, 2009.

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