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US Week in Review - Week ending 10 January 2013

The US Week in Review highlights this week’s developments and emerging issues in the financial reporting world and gives you direct access to relevant technical accounting guidance and thought leadership produced by Ernst & Young.

Ernst & Young publications


To the Point: New definition and disclosures coming for discontinued operations

The FASB tentatively decided to propose a new definition of a discontinued operation that would raise the threshold to qualify (e.g., a separate major line of business or major geographical area) and permit an increased level of ongoing involvement (e.g., allow for continuing cash flows and significant continuing involvement). The FASB also tentatively decided to require disclosures about discontinued operations and about certain individually material disposal transactions that do not meet the definition of a discontinued operation. The Board directed its staff to draft a proposal as soon as possible. Our To the Point publication tells you what you need to know.

To the Point: The PCAOB's views on internal control audit deficiencies

Audit committees might find it helpful to review the PCAOB's report on deficiencies in audits of internal control over financial reporting that it identified in 2010 inspections and discuss it with their audit firm. Our To the Point publication tells you what you need to know about the report.

Quarterly tax developments

Our December edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes enacted and effective tax legislation, regulatory developments and other items through 31 December 2012 to consider as you prepare your tax provision. We've also listed our Tax Alerts and other publications that provide more detail on the topics we discuss.

Joint Project Watch - December 2012

The FASB and the IASB are redeliberating their second exposure draft (ED) on revenue recognition, and are preparing to issue a second ED on leases in early 2013. Separate documents on financial instruments topics have been issued or are expected early in 2013.

This will be the final edition of our Joint Project Watch, which was designed to give you a snapshot of key developments from a US GAAP perspective. We will continue to follow each of the projects and issue publications on key developments as they occur.

SEC in Focus - January 2013 edition

Our latest newsletter summarizes developments relating to SEC matters, including items we have not previously reported in Week in Review. This issue highlights the SEC staff's progress on the rulemaking mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Jumpstart Our Business Startups Act. It also highlights key aspects of the AICPA National Conference on Current SEC and PCAOB Developments held in December 2012.


Standard Setter updates


Financial Accounting Standards Board (FASB)

FASB proposes clarifying fair value disclosure requirement for nonpublic entities

The FASB proposed amending ASC 825 to clarify that all nonpublic entities as defined in ASC 820 are excluded from the requirement to disclose fair value hierarchy levels for items disclosed at fair value but not measured at fair value in the statement of financial position. The proposal clarifies the scope of one new disclosure required by ASU 2011-04.

The proposal would make clear that all nonpublic entities are excluded from the requirement in ASC 825-10-50-10(d), not only those that also meet the criteria in ASC 825-10-50-3(b) and 3(c) (i.e., nonpublic entities with total assets of less than $100 million on the date of the financial statements that held no instruments accounted for as derivatives other than mortgage commitments).

The proposed amendment would be effective upon issuance because the disclosures in ASU 2011-04 become effective for nonpublic companies in annual periods beginning after 15 December 2011. Comments are due by 22 January 2013.

9 January 2013 FASB meeting

The FASB decided to limit the scope of ASU 2011-11, Disclosures about Offsetting Assets and Liabilities (ASU 2011-11), to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and lending arrangements that are either (1) offset on the balance sheet or (2) subject to an enforceable master netting arrangement or similar agreement. Additionally, in response to constituent feedback, the FASB decided to limit the scope of disclosures about derivatives to those accounted for in accordance with ASC 815, Derivatives and Hedging, including bifurcated embedded derivatives.

The amendments are effective retrospectively for annual periods beginning on or after 1 January 2013, and interim periods within them. The effective date is the same as the effective date in ASU 2011-11.

The Board also discussed its project on Accounting for financial instruments: classification and measurement.

For details, see the FASB Action Alert.

Upcoming meetings and webcasts

17 January 2013 EITF meeting

The Task Force is scheduled to discuss:

  • Issue No. 11-A, Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity
  • Issue No. 13-A, Inclusion of the Fed Funds Rate as a Benchmark Interest Rate for Hedge Accounting Purposes
  • Issue No. 12-D, Accounting for Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date
  • Issue No. 12-B, Not-for-Profit Entities: Personnel Services Received from an Affiliate for Which the Affiliate Does Not Seek Compensation
  • Issue No. 13-C, Presentation of a Liability for an Unrecognized Tax Benefit When a Net Operating Loss or Tax Credit Carryforward Exists
  • Issue No. 12-H, Accounting for Service Concession Arrangements
  • Issue No. 12-F, Recognition of New Accounting Basis (Pushdown) in Certain Circumstances

For additional details, see the FASB calendar.

Education sessions

See the FASB calendar for upcoming education sessions. No decisions are made at these sessions.

Securities and Exchange Commission (SEC)

Director of the Division of Enforcement to leave

Robert Khuzami, the SEC's Director of the Division of Enforcement since February 2009, is leaving, the agency announced. Mr. Khuzami oversaw numerous enforcement actions related to the financial crisis and a record number of cases involving insider trading and misconduct by investment advisers and companies.

The SEC has not yet announced a replacement for Mr. Khuzami.

Two SEC advisory committees to meet in upcoming weeks

The SEC said its Investor Advisory Committee will meet on 18 January 2013, and its SEC Advisory Committee on Small and Emerging Companies will meet on 1 February 2013.

The meeting of the Investor Advisory Committee will include remarks from SEC Chairman Elisse Walter and other Commissioners and reports from four subcommittees. The SEC Advisory Committee on Small and Emerging Companies will consider recommendations and other matters relating to rules and regulations affecting small and emerging companies under the federal securities laws. Both meetings will be webcast on the Commission's website.

International Accounting Standards Board (IASB)

2013 IFRSs Consolidated without early application (IASB)

The IFRS Foundation has issued the 2013 International Financial Reporting Standards Consolidated without early application (Blue Book). This book is also available to purchase as a PDF download or as a bundled product which includes a printed copy of the 2013 IFRS (Blue Book) with the PDF download.

This edition includes the latest consolidated versions of all Standards (including IFRSs, IASs and IFRIC and SIC Interpretations) as approved for issue by the IASB up to 31 December 2012 and that are required to be applied on 1 January 2013. This volume does not contain those Standards or changes to Standards with an effective date after 1 January 2013. See the IASB website for further information.

Upcoming Thought center webcasts and podcasts


Non-life insurance: proposed IASB/FASB models
18 January 2013, 10:00 a.m. Eastern time

Fiscal cliff or not: strategies to optimize capital
22 January 2013, 12:00 p.m. Eastern time

Credit impairment: a discussion of FASB's proposal
31 January 2013, 2:00 p.m. Eastern time

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