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Accounting Research
Manager(TM)
Weekly Summary of
Developments
July 19-23, 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:
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
Financial Reform -- Legislation Enacted That Provides
Permanent Exemption from SOX 404(b) for Certain Smaller Companies
Receivables -- FASB Issues Guidance on Disclosures
About Credit Quality and Allowance for Credit Losses
New Accounting Standards -- Checklist Updated
Contingencies -- FASB Issues Proposal on Disclosure of
Certain Loss Contingencies
Securities Act Rules -- SEC Staff Issues Updated
Interpretations on Securities Act Rules
Leases -- FASB Discusses Leases and Other
Matters
EITF Materials -- FASB Issues Additional Materials for
July 29, 2010 EITF Meeting
PCAOB Standing Advisory
Group Meeting -- Minutes
of the July 15, 2010 Meeting Published
SEC Organization -- SEC Chairman Testifies on Recent SEC
Activities and Reforms
International Accounting -- SEC Commissioner Testifies on
International Cooperation
Production Stripping Costs
-- IFRS Interpretations
Committee Discusses Production Stripping Costs and Other Matters
Auditing and Internal
Controls Headlines
PCAOB Standing Advisory
Group Meeting -- Minutes
of the July 15, 2010 Meeting Published
Reporting on Controls at a
Service Organization --
Discussion and Analysis of SSAE 16
Government Headlines
Service Efforts and
Accomplishments -- GASB
Issues Guidelines for Reporting Performance Information
Financial Instruments -- GASB 59 Discussed
GASB Report Issued -- Financial Instruments and Other
Matters Discussed
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ACCOUNTING AND SEC HEADLINES:
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Financial Reform --
Legislation Enacted That Provides Permanent Exemption from SOX 404(b) for
Certain Smaller Companies
For detail, please contact info@zy-cpa.com
We have published a Hot
Topic, "Financial Reform Legislation Enacted in
The Wall Street Reform Act
permanently exempts small public companies with less than $75 million in market
capitalization (nonaccelerated filers) from the
requirement to obtain an external audit on the effectiveness of internal
financial reporting controls provided in Section 404(b) of the Sarbanes-Oxley
Act of 2002 (SOX). Section 404(b) requires a registrant to provide an
attestation report on management’s assessment of internal controls over
financial reporting by the registrant’s external auditor. Disclosure of
management attestations on internal control over financial reporting under
existing Section 404(a) is still required for smaller companies.
Other provisions in the Wall
Street Reform Act address:
-SEC funding and
organizational changes;
-Executive compensation and
corporate governance;
-Shareholder voting rights;
and
-PCAOB authority over
broker-dealers.
See our Hot Topic for
complete details.
We have also updated our four
SEC Disclosure Checklists to give effect for this new legislation. For complete
details, see our Literature Update:
For detail, please contact info@zy-cpa.com
Receivables -- FASB Issues
Guidance on Disclosures About Credit Quality and
Allowance for Credit Losses
For detail, please contact info@zy-cpa.com
The FASB has issued
Accounting Standards Update (ASU) No. 2010-20, Receivables (Topic 310):
Disclosure about the Credit Quality of Financing Receivables and the Allowance
for Credit Losses. The objective of this ASU is for an entity to provide
disclosures that facilitate financial statement users’ evaluation of the
following:
-The nature of credit risk
inherent in the entity’s portfolio of financing receivables;
-How that risk is analyzed
and assessed in arriving at the allowance for credit losses; and
-The changes and reasons for
those changes in the allowance for credit losses.
To achieve these objectives,
an entity should provide disclosures on a disaggregated basis on two defined
levels: (1) portfolio segment; and (2) class of financing receivable. The ASU
makes changes to existing disclosure requirements and includes additional
disclosure requirements about financing receivables, including:
-Credit quality indicators of
financing receivables at the end of the reporting period by class of financing
receivables;
-The aging of past due
financing receivables at the end of the reporting period by class of financing
receivables; and
-The nature and extent of
troubled debt restructurings that occurred during the period by class of
financing receivables and their effect on the allowance for credit losses.
For public entities, the
disclosures as of the end of a reporting period are effective for interim and
annual reporting periods ending on or after December 15, 2010. The disclosures
about activity that occurs during a reporting period are effective for interim
and annual reporting periods beginning on or after December 15, 2010.
For nonpublic entities, the
disclosures are effective for annual reporting periods ending on or after
December 15, 2011.
New Accounting Standards
-- Checklist Updated
For detail, please contact info@zy-cpa.com
We have updated our
publication "Summary Checklist of Recent Authoritative U.S. Accounting
Standards." This checklist is intended to serve as a reference tool to
help users ensure that they have considered authoritative standards recently
issued or approved by the FASB. The standards are listed by source and a
summary of the transition guidance is provided with a reference to the relevant
FASB Accounting Standards CodificationTM (Codification)
paragraph(s). Effective dates and application (adoption) requirements are also
presented.
We have updated our checklist
to reflect ASU 2010-20, discussed above.
See our Literature Update for
complete details.
Contingencies -- FASB
Issues Proposal on Disclosure of Certain Loss Contingencies
For detail, please contact info@zy-cpa.com
The FASB has issued for
public comment a proposed ASU, Contingencies (Topic 450): Disclosure of
Certain Loss Contingencies. This proposed ASU would require entities to
disclose qualitative and quantitative information about loss contingencies to
enable financial statement users to understand: (a) the nature of loss
contingencies; (b) their potential magnitude; and (c) their
potential timing (if known). The proposed ASU would require the disclosure of
certain remote loss contingencies and provides that the assessment of the
materiality of loss contingencies would not consider the possibility of
recoveries from insurance or other indemnification arrangements. The proposal
retains current disclosure requirements and requires additional disclosures.
The proposal would also require disclosure of publicly available quantitative
information, other relevant nonprivileged
information, and in certain cases information about possible recoveries.
As proposed, for public
entities, the new guidance would be effective for fiscal years ending after
December 15, 2010, and interim and annual periods in subsequent fiscal years.
For nonpublic entities, the new guidance would be effective for the first
annual period beginning after December 15, 2010, and for interim periods of fiscal
years after the first annual period.
Comments on this proposal are
due August 20, 2010.
Securities Act Rules --
SEC Staff Issues Updated Interpretations on Securities Act Rules
For detail, please contact info@zy-cpa.com
The staff in the Division of
Corporation Finance (Corp Fin) of the SEC has issued updates to its Compliance
and Disclosure Interpretation (C&DI), Securities Act Rules.
Specifically, this update makes the following changes:
-Withdraws question 255.13;
and
-Adds new questions 198.08,
and 233.04-233.08.
This C&DI provides
interpretations by Corp Fin, in a question and answer format, of rules adopted
under the Securities Act of 1933. Topics updated in this C&DI cover various
consent requirements for including credit ratings in a registration statement
for companies not subject to the Regulation AB disclosure requirements.
Leases -- FASB Discusses
Leases and Other Matters
For detail, please contact info@zy-cpa.com
As reported in its
"Summary of Board Decisions" publication, the FASB and IASB (the Boards)
met on July 19, 21, and 22, 2010, and discussed: (a) leases; and (b)
insurance contracts. The Boards discussed the following topics regarding
leases:
-Application guidance on when
to use the performance obligation or derecognition
approaches lessor accounting;
-Purchase or sale of
underlying asset;
-Accounting for arrangements
with service and lease components;
-Consequential amendments -
business combinations; and
-Additional disclosures.
The Boards reached a number
of decisions on these topics, including the following:
-To consider third-party
residual value guarantees when determining whether a lessor
is exposed to significant risks and benefits associated with the underlying
asset;
-Not to include specific
guidance on long-term leases of land in the application guidance;
-To keep the requirement to
exclude contracts that are purchases or sales of the underlying asset from the
scope of the proposed new leases requirements; and
-To require a lessor to disclose: (a) its accounting policy
regarding which accounting model(s) the lessor
applies; (b) the types of risks/benefits of the underlying asset that
the lessor considered when deciding which accounting
model to apply; and (c) separately for each accounting model any
impairment recognized.
The FASB held a separate
meeting on July 21, 2010, to discuss certain amendments to various Codification
Topics to conform terminology to Topic 820, Fair Value Measurements and
Disclosures:
For detail, please contact info@zy-cpa.com
EITF Materials -- FASB
Issues Additional Materials for July 29, 2010 EITF Meeting
For detail, please contact info@zy-cpa.com
The FASB has issued the
following additional materials for the July 29, 2010 EITF meeting:
-EITF Issue No. 09-G,
"Accounting for Costs Associated with Acquiring or Renewing Insurance
Contracts" (issue summary); and
-EITF Issue No. 10-A,
"How the Carrying Amount of a Reporting Unit Should be Calculated When
Performing Step 1 of the Goodwill Impairment Test" (issue summary).
PCAOB Standing Advisory
Group Meeting -- Minutes of the July 15, 2010 Meeting Published
For detail, please contact info@zy-cpa.com
We have prepared minutes of
the PCAOB Standing Advisory Group meeting held on July 15, 2010. The more
significant topics of discussion at this meeting related to the following: (a)
broker-dealer audit considerations, (b) audit considerations for
subsequent events, (c) FASB/IASB projects and potential impact on
auditors of public companies, (d) the auditor's reporting model project
framework, and (e) summary of comments received on the proposed standard
on communications with audit committees.
SEC Organization -- SEC
Chairman Testifies on Recent SEC Activities and Reforms
For detail, please contact info@zy-cpa.com
SEC Chairman Mary L. Schapiro testified before the United States House of
Representatives Committee on Financial Services Subcommittee on Capital
Markets, Insurance and Government-Sponsored Enterprises. In her remarks, Ms. Schapiro provided an overview of the actions and
initiatives the SEC is taking aimed at better protecting investors, improving
capital markets, and facilitating capital formation.
International Accounting
-- SEC Commissioner Testifies on International Cooperation
For detail, please contact info@zy-cpa.com
SEC Commissioner Kathleen L.
Casey testified before the United States Senate Banking Subcommittee on
Security and International Trade and Finance. Ms Casey testified about
international cooperation to modernize financial regulation and the SEC’s
efforts to improve market development and enforcement capacity around the
world. Specific topics discussed by Ms. Casey include:
-Entities and venues the SEC
cooperates;
-SEC activities with
International Organization of Securities Commissions;
-Examples of international
cooperation;
-Convergence of accounting
standards; and
-U.S. equity market structure
evaluation.
Production Stripping Costs
-- IFRS Interpretations Committee Discusses Production Stripping Costs and
Other Matters
For detail, please contact info@zy-cpa.com
As reported in its
"IFRIC Update" publication, the IFRS Interpretations Committee met on
July 8-9, 2010, and discussed the following topics:
-Production stripping costs;
-Vesting and non-vesting
conditions;
-Put options written over non-controlling
interests;
-Agenda decisions;
-Issues considered for Annual
Improvements project; and
-Work in progress.
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:
=======================================
PCAOB Standing Advisory
Group Meeting -- Minutes of the July 15, 2010 Meeting Published
For detail, please contact info@zy-cpa.com
As discussed above in our
Accounting and SEC Summaries, we have prepared minutes of the PCAOB Standing
Advisory Group meeting held on July 15, 2010. The more significant topics of
discussion at this meeting related to the following: (a) broker-dealer
audit considerations, (b) audit considerations
for subsequent events, (c) FASB/IASB projects and potential impact on
auditors of public companies, (d) the auditor's reporting model project
framework, and (e) summary of comments received on the proposed standard
on communications with audit committees.
Reporting on Controls at a
Service Organization -- Discussion and Analysis of SSAE 16
For detail, please contact info@zy-cpa.com
We have added a GAAS Update
Service that provides discussion and analysis of Statement on Standards for
Attestation Engagements (SSAE) No. 16, Reporting on Controls at a Service
Organization, which contains the requirements and guidance for a service
auditor reporting on a service organization’s controls. SSAE 16 is effective
for service auditors’ reports for periods ending on or after June 15, 2011,
with earlier application permitted.
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:
======================
Service Efforts and
Accomplishments -- GASB Issues Guidelines for Reporting Performance Information
For detail, please contact info@zy-cpa.com
The GASB has issued its
Suggested Guidelines for Voluntary Reporting, SEA Performance Information
(Suggested Guidelines). The purpose of the document is to provide state and local
governments with suggested guidelines intended to provide a common framework
for the effective external communication of service efforts and accomplishments
(SEA) performance information. The reporting of SEA performance information -
indicators of a government’s actual performance in providing services to its
citizens - complements the information included in traditional financial
statements and is considered by the GASB to be an important method of
demonstrating accountability. The Suggested Guidelines are intended to help
state and local governments that choose to communicate SEA performance
information to citizens, elected officials, and other interested parties to do
so effectively.
The Suggested Guidelines
include what the GASB has identified as the:
-Four essential components of
an effective SEA report;
-Six qualitative
characteristics of SEA performance information; and
-Three keys to effective
communication.
Financial Instruments --
GASB 59 Discussed
For detail, please contact info@zy-cpa.com
We have added a Governmental
GAAP Update Service that discusses GASB Statement No. 59, Financial
Instruments Omnibus. GASB 59 is intended to update and improve existing
standards regarding financial reporting of certain financial instruments and
external investment pools. This Update discusses the following topics:
-Unallocated insurance contracts;
-2a7-like external investment
pools;
-Interest rate risk
disclosures;
-Contracts that include
nonperformance penalties;
-Certain financial guarantee
contracts;
-Revenue-based contracts;
-Hybrid instruments:
investor's initial rate of return; and
-Effective date and
transition.
GASB Report Issued --
Financial Instruments and Other Matters Discussed
For detail, please contact info@zy-cpa.com
The June 2010 edition of the
"GASB Report" has been issued and includes the following discussion
items:
-GASB calendar;
-GASB board member retires
(William W. Holder);
-Summary of GASB meetings;
-GASB Statement No. 59, Financial
Instruments Omnibus;
-GASB issued a Preliminary
Views, Pension Accounting and Financial Reporting by Employers; and
-GASB revised Exposure Draft,
Accounting and Financial Reporting for Service Concession Arrangements.
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