AccountingLink

Financial instruments

19 June 2014

Technical Line - FASB changes accounting for certain repurchase agreements and requires new disclosures
The FASB issued final guidance that requires repurchase-to-maturity transactions to be accounted for as secured borrowings and eliminates existing guidance for repurchase financings. The guidance also requires new disclosures for certain transactions accounted for as secured borrowings and for transfers accounted for as sales when the transferor also retains substantially all of the exposure to the economic return on the transferred financial assets. Our Technical Line analyzes the new guidance and highlights key changes from current practice.

5 June 2014

Financial Reporting Developments - Foreign currency matters
We have updated our Financial reporting developments publication on foreign currency matters to clarify and enhance our interpretative guidance. Refer to Appendix C of the publication for a detailed list of these updates.

5 June 2014

Financial Reporting Developments - Issuer’s accounting for debt and equity financings
We have updated our FRD publication on issuer’s accounting for debt and equity financings to include, among other things, new interpretative guidance on debt issuance costs, trade accounts payable transactions and the subsequent measurement of certain redeemable equity instruments. Refer to Appendix F of the publication for a detailed listing of these updates.

20 May 2014

Financial Reporting Developments - Transfers and servicing of financial assets
We have updated our Financial Reporting Developments publication on transfers and servicing of financial assets for further clarification and enhancements to our interpretative guidance.

17 April 2014

To the Point - FASB lays out topics it will consider for insurance industry accounting
After backing away from its proposal to overhaul the accounting for insurance contracts and deciding to focus on making targeted improvements, the FASB laid out the topics it will consider in redeliberations. The Board decided to divide the project into two components: short-term contracts (i.e., property-casualty and short-term health contracts) and long-duration contracts (i.e., life insurance and long-duration health contracts). Both components will be worked on concurrently.

10 April 2014

NAIC Bulletin - Spring 2014 edition
Our NAIC Bulletin contains the highlights of the Spring 2014 meeting of the National Association of Insurance Commissioners.

27 March 2014

Technical Line - Venezuela - reconsidering exchange rates used for remeasurement
Companies with operations in Venezuela should reconsider the exchange rate they use to remeasure their monetary assets and liabilities and related revenues and expenses denominated in bolivars due to recent changes in the Venezuelan foreign currency exchange market. With big differences in rates now available on various legal exchange mechanisms, companies need to consider their specific transactions and their ability to transact through each mechanism to determine the appropriate rate or rates to use. Our Technical Line publication discusses factors to consider when making this determination and addresses related financial reporting considerations and disclosures.

13 March 2014

To the Point - FASB sets path on changes to accounting for financial instruments
The FASB tentatively decided to retain the separate models in current US GAAP for classifying and measuring debt securities and loans, rather than overhaul its guidance in this area, as it had proposed. The FASB also confirmed that companies would apply its proposed "current expected credit loss" model to financial assets that are debt instruments measured at amortized cost. Our To the Point publication tells you what you need to know about these and other decisions that FASB has made in its financial instruments project.

20 February 2014

To the Point - FASB scales back scope of insurance contracts project
The FASB scaled back the scope of its insurance contracts project and said it will focus on targeted improvements to the current guidance for long-duration contracts and disclosures for short-duration contracts. Contracts written by noninsurance entities will not be subject to the guidance for insurance. Our To the Point publication tells you what you need to know about the Board's decisions.

30 January 2014

Technical Line - Certain private companies can now use simplified hedge accounting
Our Technical Line discusses new guidance from the FASB that makes it easier for certain private companies to qualify for hedge accounting for certain interest rate swaps. Eligible companies can assume that a hedging relationship is perfectly effective if certain conditions are met and can measure those swaps at settlement value rather than at fair value. They also have more time to complete formal hedge documentation.

16 January 2014

NAIC Bulletin - Fall 2013 edition
Our NAIC Bulletin contains the highlights of the Fall 2013 meeting of the National Association of Insurance Commissioners.

8 November 2013

To the Point - Defining host contracts in hybrid instruments issued as shares
The FASB recently proposed a single approach for determining whether a host contract in a hybrid instrument issued in the form of a share is more akin to debt or equity. The proposal would clarify that the nature of a host contract in a hybrid instrument issued in the form a share should be determined based on the consideration of all of its stated and implied substantive terms and features, including any embedded derivatives. It also would clarify that no single term or feature would in and of itself determine the nature of the host contract. Our To the Point tells you what you need to know about the proposal.

28 October 2013

Comment Letter - FASB proposed ASU on insurance contracts
In our comment letter, we encouraged the FASB and the IASB to work together to make their proposals more comparable. We also said the FASB needs to address certain issues before finalizing the guidance. Our most significant concerns relate to the proposed scope, discount rates and how changes in these rates would be recognized, recognition of changes in expected cash flows, revenue recognition, presentation and transition. We also encourage the Board to consider simplifying certain areas of the proposal to make it less costly to apply.

10 October 2013

Financial Reporting Developments - Derivatives and hedging
We have updated our Financial reporting developments publication on derivative instruments and hedging activities. Chapters 1, 4, and 8 of our FRD have been updated to incorporate ASU 2013-01 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities and ASU 2013-10 Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes. Additionally, we have reorganized some of the content to help you better navigate through the guidance.

9 September 2013

NAIC Bulletin - Summer 2013 edition
Our NAIC Bulletin contains the highlights of the Summer 2013 meeting of the National Association of Insurance Commissioners.

26 July 2013

Financial Reporting Developments - Accounting for certain debt and equity securities
We have updated our Financial reporting developments publication on the accounting for investments in certain debt and equity securities to further clarify and enhance our guidance, including our guidance on the SEC staff's views about beneficial interests that should be considered of "high credit quality."

17 July 2013

To the Point - Companies can use a new benchmark interest rate for hedge accounting
The FASB issued final guidance allowing companies to designate the Federal Funds Effective Swap Rate (which is the Overnight Index Swap rate or OIS in the US) as a benchmark interest rate for hedge accounting purposes, effective immediately. Our To The Point publication tells you what you need to know about the new guidance.

31 May 2013

Comment letter - FASB proposal on credit losses of financial instruments 
In our comment letter, we urge the FASB to work with the IASB to converge their proposals to require more timely recognition of credit losses than under today’s incurred loss model. We note that the FASB could accomplish its goal of timelier recognition of losses by lowering the threshold for recognizing losses. We also recommend that the FASB exclude debt securities and trade, lease and reinsurance receivables from its proposal.

15 May 2013

Comment letter - FASB proposal on classification and measurement of financial instruments
In our comment letter, we say that while the FASB proposal on classification and measurement of financial instruments would represent a big step toward convergence, we do not support finalizing it in its current form. We believe the proposal may inappropriately require too many financial instruments, including certain common debt instruments, to be measured at fair value with changes in fair value recognized in net income. We are also concerned that certain provisions of the proposal could be interpreted in different ways and lead to diversity in practice. However, we believe the FASB can make specific changes and clarifications that will improve the proposal’s operability.

23 April 2013

NAIC Bulletin - Spring 2013 edition
Our NAIC Bulletin contains the highlights of the Spring 2013 meeting of the National Association of Insurance Commissioners.

18 April 2013

Technical Line - FASB proposes new US benchmark interest rate for hedge accounting
Overnight Index Swap (OIS) rates are increasingly being used to value collateralized derivatives, instead of the London Interbank Offered Rate. As a result, the FASB has proposed allowing entities to designate the Federal Funds Effective Swap Rate (which is the OIS rate in the US) as a benchmark interest rate for hedge accounting purposes. Our Technical Line discusses the FASB proposal, the changes in the market that are driving it and the implications for companies that are considering using OIS discount curves to measure the fair value of their collateralized derivatives.

29 March 2013

Comment letter - FASB proposal on effective control for transfers with forward agreements to repurchase assets and accounting for repurchase financings
In our letter, we generally agree that repurchase-to-maturity agreements with characteristics described in the FASB’s proposal should be accounted for as secured borrowings. However, we also recommend that the FASB more broadly re-examines the accounting for the derecognition of financial assets.

6 March 2013

Technical Line - FASB’s new classification and measurement model - a closer look
The FASB has proposed a sweeping new classification and measurement model for financial instruments that would apply to all entities across industries, not just those in financial services. Comments are due by 15 May 2013. Our Technical Line tells you what you need to know about the proposal.

14 February 2013

To the Point - FASB proposes new classification and measurement model
The FASB proposed a sweeping new classification and measurement model for financial instruments that would better converge some areas of US GAAP with IFRS 9. The proposal would apply to all entities across industries, with certain exceptions. Comments are due by 15 May 2013. Our To the Point tells you what you need to know about the proposal.

31 January 2013

To the Point - FASB limits the scope of new offsetting disclosure requirements
Summarizes the FASB's final rule limiting the scope of disclosures about offsetting assets and liabilities.

24 January 2013

Practical matters for the c-suite - Credit losses would be recognized sooner under FASB proposal
Entities across all industries will be affected by the FASB proposal on credit losses. Our Practical Matters publication explores the effect on organization's finance, tax, IT systems and business processes. This publications complement our 21 January 2013 Technical Line publication (pdf, 781.9kb) on the FASB's proposal.

24 January 2013

Practical matters for the c-suite - Expected loss model proposed by FASB for all financial assets
Entities across all industries will be affected by the FASB proposal on credit losses. This edition of Practical Matters explores issues specific to financial institutions. This publications complement our 21 January 2013 Technical Line publication (pdf, 781.9kb) on the FASB's proposal.

21 January 2013

Technical Line - FASB's credit loss proposal - a closer look
The FASB recently proposed a single, principles-based model to account for credit losses on certain financial assets. Every entity across industries would be affected by the proposal, which would change the accounting for credit losses on loans, debt securities and trade, lease and other receivables. Our Technical Line is designed to help companies better understand and interpret the proposal as they assess its effects and includes considerations for specific debt instruments affected by the proposal.

17 January 2013

To the Point - FASB proposes more changes to accounting for repurchase agreements
The FASB has proposed accounting for all cash settled repurchase-to-maturity transactions (i.e., repurchase agreements that terminate on a financial instrument’s maturity date) as secured borrowings. The proposal also would eliminate existing guidance for evaluating the accounting for repurchase financings (i.e., a repurchase agreement that relates to a previously transferred financial asset between the same counterparties). Our To the Point tells you what you need to know about the proposal.

20 December 2012

To the Point - FASB proposes new credit impairment model
The FASB proposed today a single, principles-based model to account for credit losses on financial assets. All companies would be affected by the proposal, which would change the accounting for credit losses on loans, debt securities and trade and other receivables. Our To the Point tells you what you need to know about the proposal.

19 December 2012

Comment letter - FASB proposal to limit the scope of disclosures about offsetting assets and liabilities
Our comment letter agrees with the FASB's proposal to limit the scope of ASU-2011-11 to derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. We also challenge whether ASU-2011-11's collateral disclosures are needed for instruments in the Proposed Update's scope that are not offset on the balance sheet.

19 December 2012

NAIC Bulletin - Fall 2012 edition
Our NAIC Bulletin contains the highlights of the Fall 2012 meeting of the National Association of Insurance Commissioners.

27 November 2012

To the Point - FASB proposes limiting scope of new offsetting disclosure requirements
The FASB proposed limiting the scope of the new balance sheet offsetting disclosure requirements to certain derivatives, repurchase agreements and securities lending arrangements. In doing so, the FASB responded to concerns that the requirements, as written, would apply to many commercial contracts and that the cost of preparing the disclosures would be significant compared to the limited benefits. Comments are due by 21 December 2012. Our To the Point publication summarizes what you need to know about the proposal.

25 September 2012

Comment Letter - Proposed ASU on liquidity risk and interest rate risk disclosures
Our comment letter explains why we do not support finalizing the FASB proposal to require all entities to provide disclosures about their exposures to liquidity risk and interest rate risk. We believe that many of the proposed disclosures are redundant given current SEC reporting requirements. Additionally, we believe that nonpublic and not-for-profit entities should be exempted from the proposed update because we don't believe the incremental benefits outweigh the costs of compliance.

30 August 2012

NAIC Bulletin - Summer 2012 edition
Our NAIC Bulletin contains the highlights of the Summer 2012 meeting of the National Association of Insurance Commissioners.

29 June 2012

Technical Line - Liquidity and interest rate risk - new disclosures proposed for all entities
The FASB proposed requiring all entities - public, private and not-for-profit - to provide liquidity risk disclosures in their audited financial statements. Entities that meet the proposed definition of a financial institution would also have to provide interest rate risk disclosures. Our Technical Line tells you what you need to know about the proposal.

23 May 2012

To the Point - Classification and measurement - the GAAP continues to narrow
The FASB and the IASB continue to make significant progress to more closely align their respective classification and measurement models. Our To the Point publication highlights their latest tentative decisions.

19 April 2012

To the Point - Classification and measurement - narrowing the GAAP
The FASB and the IASB have made significant progress to more closely align their respective models. Our To the Point publication highlights the latest tentative decisions.

19 April 2012

To the Point - Impairment of financial assets - a step closer to completion
The FASB and the IASB continue to work out the details of their approach to estimating the impairment of financial assets. Our To the Point publication summarizes what you need to know about the latest tentative decisions.

22 March 2012

NAIC Bulletin - Spring 2012 edition
Our NAIC Bulletin contains the highlights of the Spring 2012 meeting of the National Association of Insurance Commissioners.

4 January 2012

Technical Line - New troubled debt restructuring disclosures vary significantly
The FASB has required companies to provide several new quantitative and qualitative disclosures on troubled debt restructurings (TDR). We found more diversity in the new TDR disclosures than in other credit quality disclosures. We reviewed the TDR disclosures for a sample of public banking registrants that recently adopted the new requirements and summarized our observations.

22 December 2011

To the Point - Impairment - a major step toward convergence
The FASB and the IASB have agreed on several tentative decisions regarding their "three-bucket" expected loss approach to the impairment of financial assets. These include the transfer principle from Bucket 1 into Bucket 2 or Bucket 3, the Bucket 1 impairment allowance, the differentiating factor between Bucket 2 and Bucket 3, the grouping of financial assets for impairment evaluation and the application of the new impairment approach to retail loans, commercial loans and debt securities. Our To the Point publication discusses these decisions.

22 December 2011

To the Point - Offsetting of financial instruments - new disclosures
The FASB and the IASB issued converged disclosure requirements for balance sheet offsetting that are intended to enable users of financial statements to reconcile differences between balance sheets prepared under US GAAP and IFRS. The offsetting models aren't changing. Our To the Point publication summarizes what you need to know about the guidance.

1 November 2011

NAIC Bulletin - Fall 2011 edition
Our NAIC Bulletin contains the highlights of the Fall 2011 meeting of the National Association of Insurance Commissioners.

21 July 2011

To the Point - New credit impairment approach takes shape
The FASB and the IASB continued their discussion of the three-bucket approach for impairment of financial assets that they expect to formally propose in September. Our To the Point publication discusses the Boards' recent tentative decisions refining the approach.

14 July 2011

Technical Line - Financial instruments - a new classification and measurement model on the horizon
At an SEC roundtable, investors, representatives of smaller public companies and regulators discussed the possible incorporation of IFRS in the US. Our To the Point summarizes what you need to know about the roundtable.

23 June 2011

To the Point - A new approach to credit impairment is in the works
The FASB and the IASB are jointly developing a new credit impairment approach under which loans would be split into three buckets based on their underlying credit risk characteristics. Our To the Point summarizes the new approach.

28 April 2011

Technical Line - Hedge accounting: Is convergence possible
Our Technical Line summarizes both the FASB and IASB proposals on hedging proposals and discusses opportunities for convergence.

27 April 2011

Comment Letter - Balance sheet offsetting
Our comment letter recommends that the Boards should consider adopting a model that retains the existing exceptions in US GAAP for repo and reverse repo agreements and certain derivative contracts subject to master netting arrangements. We believe that adoption of the US GAAP exceptions would be a pragmatic solution to achieve convergence in offsetting.

26 April 2011

Technical Line - New credit quality disclosures - a survey
Our Technical Lines summarizes our review of the credit quality disclosures for a sample of public banking registrants that recently adopted the new requirements.

25 April 2011

Comment Letter - Selected issues about hedge accounting
Ernst & Young is supportive of the Boards' efforts to arrive at a converged solution to accounting for hedging transactions. On balance, we support the overall direction of the IASB’s proposal to align hedge accounting with an entity’s risk management activities.

13 April 2011

Technical Line - Boards receive mixed feedback on credit impairment proposals
The Boards received more than 200 comment letters on their Supplementary Document outlining a joint credit impairment approach and separate approaches the FASB and the IASB have been developing. Our Technical Line summarizes constituent feedback.

1 April 2011

Comment Letter - Financial instruments - impairment
Our comment letter provides our views on the Boards' efforts to arrive at a converged solution to accounting for credit impairment under IFRS and US GAAP. We believe that there are a number of operational issues with the joint approach that will require the development of additional guidance and will benefit from robust field testing.

31 March 2011

To the Point - Credit impairment accounting continues to take shape
While awaiting feedback on the Supplementary Document (SD), the Boards continued to discuss other impairment issues. The Boards made tentative decisions regarding estimating credit losses and accounting for purchased financial assets. Our To the Point provides a brief update and analysis.

8 March 2011

Technical Line - FASB makes progress on classifying and measuring financial instruments
The FASB is redeliberating accounting for classifying and measuring financial instruments and has made several important tentative decisions. Our Technical Line provides an update on the FASB’s decisions and analysis to help you assess the effects of the proposal.

24 February 2011

Technical Line - Proposed impairment approaches: a closer look
Our Technical Line provides additional guidance on the FASB and IASB model for recognizing credit losses on certain financial assets and their own separate approaches.

10 February 2011

To the Point - Hedge accounting: FASB seeks reaction to IASB’s proposed model
The FASB is seeking comment on the IASB’s December 2010 hedge accounting proposal. The proposed IASB model would significantly change hedge accounting, going well beyond the changes the FASB proposed last year. This To the Point describes the IASB's proposal.

1 February 2011

To the Point - A new proposal for recognizing credit losses
The FASB and IASB have jointly proposed a model for determining when credit losses should be recognized on certain loans and other financial assets. Financial assets would be separated into a "good book" and "bad book," based on the company's internal credit risk management policies. Our To the Point summarizes the joint proposal.

31 January 2011

Hot Topic - Big changes proposed to balance sheet offsetting
The FASB and the IASB have proposed significantly restricting the ability of companies to offset assets and liabilities on their balance sheets. Our Hot Topic provides an overview of this proposal.

29 October 2010

Practical matters for the c-suite - More "fair value" for financial instruments? — Every company affected
Our Practical Matters highlights how the proposed changes to the US GAAP accounting standard for financial instruments will impact companies in every industry.

10 September 2010

Comment Letter - Financial instruments and derivative/hedging activities
This comment letter provides our views on the FASB's proposal on the accounting for financial instruments and derivative instruments and hedging activities.

7 September 2010

Comment Letter - Amendments to common fair value measurement and disclosure requirement
We are supportive of the Boards’ efforts to develop common requirements for measuring fair value and disclosing information about fair value measurements under US GAAP and IFRS. However, our comment letter identifies several potentially significant changes to practice that give us concern.

21 July 2010

Technical Line - Venezuela’s foreign currency exchange market: recent developments
During second quarter 2010, the government of Venezuela acted to halt the free-floating "parallel" currency exchange mechanism that many companies utilized to convert Venezuelan currency to US dollars, replacing that mechanism with a new currency exchange system known as "SITME." The accounting considerations associated with that development are discussed in our Technical Line.

7 July 2010

Technical Line - Financial instruments: FASB proposes wholesale changes
Our Technical Line provides a discussion of the proposed update on the accounting for financial instruments and provides our views on the implications of several key aspects of the proposed guidance

27 May 2010

Hot Topic - Amendments to equity-classified preferred share instruments
Our Hot Topic provides an overview of the existing extinguishment accounting model for equity-classified preferred shares, discusses factors to consider when evaluating whether an amendment to equity-classified preferred shares should be considered an extinguishment or modification and provides thoughts on accounting models that may be appropriate for modifications of equity-classified preferred shares.

27 May 2010

Hot Topic - FASB proposes more fair value for financial instruments and new performance statement
Our Hot Topic provides a high-level summary of the highly anticipated FASB proposal on the accounting for financial instruments, including the guidance on classification and measurement, impairment and hedging of financial instruments.

31 March 2010

Hot Topic - Boards complete deliberations on financial instruments with characteristics of equity
On 11 March 2010, the FASB and the IASB finalized a collection of tentative conclusions that will serve as the basis for an exposure draft of an accounting standard addressing financial instruments with characteristics of equity instruments. Our Hot Topic publication summarizes the boards' tentative conclusions.

10 March 2010

Hot Topic - FASB issues new guidance on embedded credit derivatives
The ASU clarifies the guidance within the derivative literature that exempts certain credit-related features from analysis as potential embedded derivatives requiring separate accounting. The ASU provides that only an embedded credit derivative feature related to the transfer of credit risk that is solely in the form of subordination of one financial instrument to another is not subject to further analysis as a potential embedded derivative. Our Hot Topic provides additional detail.

23 December 2009

Technical Line - FASB Statement No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 – Update of original Technical Line issued in July 2009
Our Technical Line summarizes Statement 166. Statement 166 changes the way enterprises account for transfers of financial assets and determine what entities must be consolidated, and will have a significant effect on securitizations and special-purpose entities.

13 November 2009

Technical Line - FASB Statement No. 167, Amendments to FASB Interpretation No. 46(R): Appendix C-FAQs
Out Technical Line provides additional implementation guidance in the form of frequently asked questions (FAQs) on Statement 167’s provisions.

11 November 2009

Comment Letter - Proposed ASU, "Derivatives and Hedging (Topic 815)– Scope Exception Related to Embedded Credit Derivatives"
This comment letter provides our views on FASB's proposal on embedded credit derivatives and scope exception.

11 November 2009

Technical Line - Tranched preferred share issuances
Our Technical Line addresses how to determine if the future tranche right/obligation is a freestanding instrument or an embedded feature. It also provides factors to consider when evaluating the transaction’s contractual terms to make that determination. It provides a brief overview of the different accounting models applied to freestanding instruments and embedded features.

21 October 2009

Technical Line - Warrants on redeemable shares
Our Technical Line illustrates the application of the accounting literature related to freestanding warrants, and similar instruments, on redeemable shares. There is also a brief overview of the transactions where these types of warrants frequently have been issued

14 October 2009

Hot Topic - Proposed ASU: Scope exception for embedded credit derivatives
Our Hot Topic clarifies the FASB re-proposal that clarifies that the embedded credit derivative feature between the tranche holders created by subordination is not subject to potential bifurcation from the host contract. The revised accounting guidance will be a major accounting change for many synthetic CDO investors (e.g., insurance groups) who have historically applied the scope exception to their investments in synthetic collateralized debt obligations.

10 July 2009

Hot Topic - FASB ratifies EITF 09-1 on own-share lending arrangements
Our Hot Topic addresses the accounting for an entity’s own-share lending arrangement initiated in conjunction with a convertible debt or other financing offering and the effect a share-lending arrangement has on earnings per share.

17 June 2009

Technical Line - Auction rate securities and settlement agreements
Our Technical Line discusses the settlement agreements related to auction rate securities.

17 June 2009

Technical Line - Other-than-temporary impairment
Our Technical Line discusses the relevant accounting literature and factors to be considered in determining whether a decline in a marketable equity security’s fair value below its cost is other than temporary.

12 June 2009

Hot Topic - FASB issues Statement 166 amending Statement 140
Our Hot Topic summarizes Statement 166 that was issued in response to the FASB’s concerns about how practice has developed under Statement No. 140 for transfers of financial assets. Statement 166 removes the concept of a QSPEs from Statement 140 and eliminates the exception for QSPEs from the consolidation guidance of FIN 46(R).

20 May 2009

Technical Line - Other-than-temporary impairment: Questions and interpretive responses about FSP FAS 115-2
Our Technical Line provides Q&As related to the implementation of FSP FAS 115-2 and FAS 124-4, Recognition and Presentation of Other-Than-Temporary Impairments.

8 May 2009

Hot Topic - FASB issues proposal on measurement of liabilities at fair value
Our Hot Topic summarizes a proposed FASB FSP that is aimed at addressing several key issues with respect to estimating the fair value of liabilities in accordance with Statement 157.

10 April 2009

Hot Topic - FASB issues FSP FAS 115-2 on other-than-temporary impairments
Our Hot Topic discusses the FASB's recently issued FSP FAS 115-2, FAS 124-2, and EITF 99-20-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2). Under FSP FAS 115-2, management must assert: (a) it does not have the intent to sell the security; and (b) it is more likely than not it will not have to sell the security before recovery of its cost basis.

16 March 2009

Hot Topic - FASB to propose FSPs to address fair value measurements and other-than-temporary impairments
Our Hot Topic discusses the FASB's proposed changes to mark-to-market accounting rules.

13 February 2009

Comment Letter - Proposed Statement 133 Implementation Issue No. C22: Scope exception for embedded credit derivative
The comment letter provides our views on DIG Issue C 22 on embedded credit derivatives.

11 February 2009

Technical Line - Accounting for transfers of financial assets and repurchase financing transactions
Our Technical Line provides a discussion of the requirements of FSP FAS 140-3 and includes interpretive guidance to help evaluate the accounting for linked and unlinked transactions under Statement 140.

4 February 2009

Technical Line - Other-than-temporary impairment-Accounting considerations for certain securities
Negative market trends have brought about an increased emphasis on the accounting other-than-temporary impairments (OTTI) of debt and equity securities. Our Technical Line discusses the various accounting issues that have been issued by the FASB and EITF.

16 January 2009

Hot Topic - FASB proposes to clarify the embedded credit derivative scope exception of Statement 133
Our Hot Topic summarizes proposed DIG Issue C22. The proposal clarifies when embedded credit derivatives, including those in collateralized debt obligations (CDOs) and synthetic CDOs, are not considered embedded derivatives that must be separately analyzed for potential bifurcation and separate accounting at fair value.

15 January 2009

Comment Letter - Proposed FSP amending FAS 107-a-disclosure requirements related to financial instruments
This comment letter provides our views on the proposed FASB FSP to amend the disclosure requirements for financial assets under FAS 107.

12 January 2009

Hot Topic - FASB Issues FSP Amending EITF 99-20
FSP EITF 99-20-1, amends EITF Issue No. 99-20 by eliminating the requirement that a holder’s best estimate of cash flows be based upon those that “a market participant” would use. Our Hot Topic summarizes the FSP.

22 December 2008

Hot Topic - FASB proposes changes to certain accounting and disclosure requirements related to financial instruments
Our Hot Topic summarizes the proposed FSP that would amend the impairment guidance in EITF 99-20.

19 December 2008

Technical Line - EITF Issue 07-5-Determining whether an Instrument Is Indexed to an Entity’s Own Stock
Our Technical Line discusses the provisions of 07-5 and helps companies analyze equity-linked embedded features for bifurcation under the new guidance.

12 December 2008

Hot Topic - FSP FAS 140-4 and FIN 46(R)-8, Disclosures about Transfers of Financial Assets and Interests in Variable Interest Entities
Our Hot Topic addresses the new disclosure requirements required by FSP 140-4 and FIN 46R-8. The FSP requires extensive additional disclosures by public entities with continuing involvement in transfers of financial assets to special purpose entities and with variable interests in variable interest entities (VIEs).

12 November 2008

Technical Line - FSP APB 14-1-Accounting for convertible debt instruments that may be settled in cash upon conversion
Our Technical Line provisions of FASB Staff Position APB 14-1 which was issued to address questions about the valuation of the components of an instrument when convertible debt is settled in cash upon conversion.

4 November 2008

Comment Letter - Proposed amendment to FASB Statement 140
This comment letter provides our views on the FASB's proposed amendment to Statement 140 related to transfers of financial assets.

17 October 2008

Comment Letter - Proposed FSP FAS 140-e and FIN 46(R)-e -Disclosures about transfers of financial assets and interests in variable interest entities
This comment letter provides our views on the FASB's proposed FSP relating to disclosures about transferred assets and interests in variable interest entities.

1 October 2008

Technical Line - Auction rate securities and settlement agreements
Our Technical Line addresses several questions that have arisen regarding accounting considerations for the proposed auction rate security settlements from the perspective of both the investor and the broker dealer.

1 October 2008

Technical Line - Considerations for derivatives with counterparties in distress
Our Technical Line provides accounting considerations affecting derivatives with counterparties in financial distress.

19 September 2008

Hot Topic - FASB releases exposure draft on amendment to FAS 140
Our Hot Topic summarizes the FASB’s proposed amendment to Statement 140. The Exposure Draft was issued in response to the FASB’s concerns about how practice has developed under Statement 140 and constituent concerns that certain transfers should not qualify as sales under Statement 140.

17 September 2008

Hot Topic - FASB issues FSP on disclosures about credit derivatives and certain guarantees and clarifies the effective date of FAS 161
Our Hot Topic summarizes the key provisions of the proposed FASB FSP on disclosures of credit derivatives and certain guarantees.

19 August 2008

Comment Letter - FASB Exposure Draft on Hedging
This comment letter provides our views on the FASB's proposal on hedging activities.

30 June 2008

Comment Letter - Proposed FSP FAS 133-b and FIN 45-c on disclosures about credit derivatives
This comment letter provides our views on the FASB's proposed FSP on disclosures about credit derivatives.

16 June 2008

Hot Topic - FASB Exposure Draft on hedging activities
Our Hot Topic summarizes the FASB's proposal on hedging activities. The proposal is intended to resolve major practice issues that have been evident in restatements and near-restatements under Statement 133.

30 May 2008

Comment Letter - FASB preliminary views: Financial instruments with characteristics of equity
Our comment letter supports a joint FASB and IASB project to comprehensively consider the model for distinguishing between liabilities and equity as well as the related measurement and financial statement presentation issues. We tentatively support the “basic ownership” approach from the three models described in the PV for various reasons, including its perceived simplicity.

28 May 2008

Hot Topic - Accounting for convertible debt instruments that may be settled in cash upon conversion
Our Hot Topic focuses on the application of FASB FSP APB 14-1 on convertible debt.

5 May 2008

Comment Letter - EITF07-05 Draft Abstract-Determining whether an instrument (or embedded feature) is indexed to an entity's own stock
This comment letter provides our views on whether an instrument (or embedded feature) is indexed to an entity's own stock.

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