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US Week in Review - Week ending 17 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: FASB proposes more changes to accounting for repurchase agreement

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 publication tells you what you need to know about the proposal.

New Financial Reporting Developments (FRD) on joint ventures

Our new FRD, Joint ventures, is designed to help readers properly identify joint ventures and understand the related accounting issues. This publication addresses the latest guidance and views on the accounting applied by both a joint venture and its venturers for noncash assets contributed at formation.

2012 SEC Comments and Trends life sciences industry supplement

Our life sciences supplement to our SEC Comments and Trends publication is intended to give you insights into the Securities and Exchange Commission (SEC) staff's concerns and areas of focus involving life sciences companies.

This publication is based on our review of public comment letters issued to registrants during 2012. It should be read in conjunction with our October 2012 SEC Comments and Trends, which discusses matters that relate to all registrants.

Comment letter on CFTC proposal on enhancing customer protection

In our comment letter on the CFTC's proposal, Enhanced Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations, we questioned the need for a requirement that auditors of FCMs be registered with and have undergone an examination by the PCAOB. We also said the proposal that deficiencies noted in such an examination must have been remediated to the satisfaction of the PCAOB within three years of a report would be unworkable. Instead, we recommended that the CFTC consider seeking statutory change to make auditors of FCMs subject to the registration and inspection requirements of the PCAOB or require that auditors of FCMs be registered with and subject to inspection by the PCAOB, similar to the requirement for auditors performing surprise examinations of investment advisers under the SEC's Custody Rule.

Comment letter on COSO's revised internal control framework and compendium of approaches and examples

We support COSO's efforts to update its 1992 Internal Control – Integrated Framework to reflect changes in the business and operating environment and believe the compendium will provide users with helpful guidance. In our comment letter, we expressed our support for COSO's efforts to update and enhance the framework to enable users to better develop, implement and monitor systems of internal control. We also expressed certain concerns and suggested modifications to the Revised Framework and compendium, including, among others, enhancing the guidance related to an organization's assessment of the effectiveness of its internal controls; modifying its definitions of deficiencies and major deficiencies; providing guidance about the precision of management review controls; and providing additional guidance on the application of the Revised Framework to smaller organizations.

Standard Setter Update now available

Our 2012 Standard Setter Update - Financial reporting and accounting developments publication highlights significant developments in financial accounting and reporting between 1 January 2012 and 31 December 2012 and summarizes certain proposals presently under consideration by the Financial Accounting Standards Board, the Emerging Issues Task Force, the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Auditing Standards Board and the Governmental Accounting Standards Board.


Standard Setter updates


Financial Accounting Standards Board (FASB)

FAF issues PIR report

The FAF review team issued a report on its post-implementation review (PIR) of FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (codified in ASC 280). See the FAF's site for details.

17 January 2013 EITF meeting

For details of the Task Force discussion, see our upcoming January 2013 EITF Update publication.

Upcoming meetings and webcasts

23 January 2013 FASB meeting

The Board is scheduled to discuss its project on Investment companies.

For additional details, see the FASB calendar.

Education sessions

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

International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)

IAASB issues paper on audit quality

The IAASB has issued for public comment a Consultation Paper addressing audit quality. A Framework for Audit Quality describes the input and output factors that contribute to audit quality at the engagement, audit firm and national levels. Responses to a number of questions included in the consultation paper are due by 15 May 2013.

IPSASB publishes Public Sector Conceptual Framework

The International Public Sector Accounting Standards Board (IPSASB) has issued the first four chapters of its Conceptual Framework. The Conceptual Framework underpins the development of International Public Sector Accounting Standards (IPSASs) and Recommended Practice Guidelines (RPGs). The following four chapters have been issued:

Chapter 1: Role and Authority of the Conceptual Framework
Chapter 2: Objectives and Users of General Purpose Financial Reporting
Chapter 3: Qualitative Characteristics
Chapter 4: Reporting Entity

The IPSASB is currently developing other chapters of the Conceptual Framework, which will address the definition, recognition, and measurement of the "elements" (or building blocks) of financial statements, and presentation in GPFRs. They will be added to the Conceptual Framework when completed. (See the IPSASB section of the IFAC website.)

Government Accounting Standards Board (GASB)

New GASB standard on reporting government combinations and disposals of government operations

The GASB approved for issuance a new standard intended to improve the accounting for government combinations and disposals of government operations. GASB Statement No.69 provides guidance for determining whether a combination is a merger, acquisition or transfer of operations. The requirements are effective for periods beginning after 15 December 2013 and should be applied on a prospective basis. The standard will be posted on the GASB website in February.

Upcoming Thought center webcasts and podcasts


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

The Affordable Care Act - Now is the time for companies to act
22 January 2013, 3:00 p.m. Eastern time

Life insurance: proposed IASB/FASB models
23 January 2013, 10:00 a.m. Eastern time

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

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