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Accounting Research Manager®
Weekly Summary of Developments
August 8-12, 2011
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Accounting Research Manager
subscriber,
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Accounting and SEC
Headlines
FASB Decisions -- FASB Discusses Financial
Instruments and Goodwill Impairment
IFRS Revisions -- IASB Proposes to Delay IFRS 9
Effective Date
SEC Rules and Forms -- Amendments Related to
Codification
Auditing and Internal
Controls Summaries
Not-for-Profit
Organizations --
New Edition of Knowledge-Based Audits of Not-for-Profit Organizations with
Single Audits
Special Purpose Frameworks -- Clarified SAS Discussed
Government Summaries
GASB Issues Statements -- GASB 63 and GASB 64 Discussed
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ACCOUNTING AND SEC HEADLINES:
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FASB Decisions -- FASB
Discusses Financial Instruments and Goodwill Impairment
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As reported in its “Summary of
Board Decisions” publication, the FASB met and discussed the following topics:
-Classification and
measurement of financial instruments;
-Goodwill impairment
assessments;
-Guidance for offsetting of nonderivative instruments as well as effective date and
transition for the disclosures;
-Consolidation issues for
investment companies; and
-Proposed technical
corrections to the FASB Accounting Standards CodificationTM (Codification).
The FASB affirmed its decision
in the proposed Accounting Standards Update (ASU), Accounting for Financial
Instruments and Revisions to the Accounting for Derivative Instruments and
Hedging Activities: Financial Instruments (Topic 825) and Derivatives and
Hedging (Topic 815), that an entity would be required to separately present
financial assets and financial liabilities on the balance sheet by
classification and measurement category. Certain presentation requirements
decided by the FASB would only apply to public entities. The FASB will discuss
at a future meeting those presentation or disclosure requirements for nonpublic
entities.
The FASB also decided not to redeliberate its previous decisions reached about the
proposed ASU, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill
for Impairment. The FASB affirmed that the proposed amendments to the
Codification will be effective for annual and interim goodwill impairment tests
performed for fiscal years beginning after December 15, 2011, with early
adoption permitted.
In addition, the FASB decided
to retain the existing U.S. GAAP offsetting guidance for nonderivative
instruments. The FASB also decided that entities would be required to provide
the disclosure requirements, for all periods presented, in annual and interim
reporting periods beginning on or after January 1, 2013.
Finally, the FASB also decided
that an investment company that is regulated under the Investment Company Act
of 1940 would be within the scope of Topic 946, Financial
Services-Investment Companies, regardless of whether an entity meets the
criteria of an investment company.
IFRS Revisions -- IASB
Proposes to Delay IFRS 9 Effective Date
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The IASB has issued for public
comment an exposure draft, Mandatory Effective Date of IFRS 9, that
proposes to adjust the mandatory effective date of IFRS 9 Financial
Instruments (November 2009) and IFRS 9 Financial Instruments
(October 2010), from the current effective date of January 1, 2013, to January
1, 2015. In publishing the exposure draft, the IASB noted the importance of
aligning all phases of its financial instruments project to have the same
effective date since redeliberations are ongoing. As
proposed, entities could still elect to implement both IFRS 9 (November 2009)
and IFRS 9 (October 2010) before January 1, 2015.
Comments on the exposure draft
are due October 21, 2011.
SEC Rules and Forms --
Amendments Related to Codification
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The SEC has adopted a final
rule, “Technical Amendments to Commission Rules and Forms Related to the FASB’s
Accounting Standards Codification.” The SEC is adopting technical amendments to
various rules and forms under the Securities Act of 1933, the Securities
Exchange Act of 1934, and the Investment Company Act of 1940. These revisions
are necessary to conform those rules and forms to the
Codification. The technical amendments include revision of certain rules in
Regulation S-X and certain items in Regulation S-K. The rule is effective
August 12, 2011.
As stated in the SEC release,
the “amendments are technical changes to eliminate obsolete terminology and
revise reporting and disclosure requirements as necessary to achieve
consistency between the Commission’s compliance requirements and the FASB Codification.”
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AUDITING AND INTERNAL CONTROLS
HEADLINES:
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Not-for-Profit
Organizations -- New Edition of Knowledge-Based Audits of Not-for-Profit
Organizations with Single Audits
For detail, please contact info@hkcmcpa.us
We have published the
2011-2012 edition of Knowledge-Based Audits of
Not-for-Profit Organizations with Single Audits. The primary objective of
this publication is to provide the guidance an auditor needs to perform
financial statement audits in accordance with Government Auditing Standards
(also known as the "Yellow Book"), and single audits in accordance
with OMB Circular A-133.
This edition of Knowledge-Based
Audits of Not-for-Profits Organizations with Single Audits reflects
comprehensive coverage of current authoritative literature including various
revisions and updated discussions to reflect auditing pronouncements through
Statement on Auditing Standards (SAS) No. 120, Required Supplementary
Information, and accounting pronouncements through FASB Accounting
Standards Updates issued through December 2010.
See our Literature Update for
complete details.
Special Purpose Frameworks
-- Clarified SAS Discussed
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We have added a GAAS Update
Service that provides discussion and analysis of a clarified SAS, Special
Considerations-Audits of Financial Statements Prepared in Accordance With
Special Purpose Frameworks, which was finalized as part of the AICPA's Clarity Project. This clarified SAS will supersede:
-SAS 1 (AU Section 544), Lack
of Conformity With Generally Accepted Accounting
Principles; and
-SAS 62 (AU Section 623), Special
Reports, except paragraphs 19-21.
The
clarified SAS addresses special considerations in applying the AU sections to
audits of financial statements prepared in accordance with a special purpose
framework. Special purpose frameworks are limited to: (a) cash; (b)
tax; (c) regulatory; or (d) contractual bases of accounting.
These special purpose frameworks are commonly referred to as other
comprehensive bases of accounting (OCBOA). The term “OCBOA” was replaced with
the term “special purpose framework,” which no longer includes a definite set
of criteria having substantial support that is applied to all material items
appearing in financial statements. Accordingly, the term OCBOA will no longer
be used in auditing standards generally accepted in the
The clarified SAS will be
effective for audits of financial statements for periods ending on or after
December 15, 2012.
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.”
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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======================
GOVERNMENT HEADLINES:
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GASB Issues Statements --
GASB 63 and GASB 64 Discussed
For detail, please contact info@hkcmcpa.us
We have added a Governmental
GAAP Update Service that discusses GASB Statement No. 63, Financial
Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and
Net Position, and GASB Statement No. 64, Derivatives-Application of
Termination Provisions When a Counterparty Has Entered into Bankruptcy. In
addition, the Governmental GAAP Update Service discusses the preliminary views
document released by the GASB, Recognition of Elements of Financial
Statements and Measurement Approaches.
GASB 63 amends GASB Statement
No. 34, Basic Financial Statements-and Management’s Discussion and
Analysis-for State and Local Governments, as well as other related
pronouncements that reference statements of net assets. Deferred outflows of
resources are a consumption of net assets by the government where the assets
will be consumed during a future reporting period. Deferred inflows of
resources are acquisitions of assets applicable to future reporting periods.
Prior to the release of GASB 63, no guidance existed for where on the statement
of net assets those elements should be reported because those elements are
separate and distinct from assets and liabilities. Statements of net assets
will no longer be used for periods beginning after December 15, 2011, and will
be replaced by the statement of net position. Early application of GASB 63 is
encouraged.
GASB 64 amends GASB Statement
No. 53, Accounting and Financial Reporting for Derivative Instruments,
by allowing continuation of an effective hedge in certain circumstances if the
counterparty is replaced or assigned. GASB 64 is effective for financial
statements for periods beginning after June 15, 2011, with earlier application
encouraged.
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@hkcmcpa.us