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US Week in Review - Week ending 19 December 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 EY.

What’s new from EY


To the Point: SEC proposes 'Regulation A+' to expand exempt offerings

The SEC proposed amendments to allow exempt offerings under Regulation A of up to $50 million within a 12-month period. The proposal, required by the Jumpstart Our Business Startups Act, would establish two tiers of offerings with different requirements, based on their size. Our To the Point publication summarizes what you need to know about the proposal.

December 2013 Financial reporting briefs issued

We have issued the general and industry-specific December 2013 editions of Financial reporting briefs. These publications provide you with a snapshot of the major accounting and regulatory developments during the quarter. The reference library at the end of each document lists the publications we issued during the quarter, along with the links to them on our AccountingLink website.

Comment letter to the PCAOB on the auditor's reporting model

In our comment letter, we supported the PCAOB's effort to enhance the auditor's report. However, we believe that certain elements of the proposal may be difficult to apply in practice. Specifically, we expressed concerns that the proposal could require auditors to disclose original information about a company and could be interpreted as a piecemeal opinion from the auditors on certain information. We also expressed concerns that the proposed requirements for other information would significantly expand the auditor's performance responsibilities and result in increased liability risks for audit firms. In addition, while we support more transparency about auditor tenure, we believe that these disclosures can be made outside the auditor's report. In our letter, we recommended changes to the proposal to address these concerns.

Highlights of the 2013 AICPA National Conference on Current SEC and PCAOB Developments

Our compendium summarizes comments of representatives of the SEC, PCAOB, FASB and IASB at last week's 2013 AICPA National Conference on Current SEC and PCAOB Developments in Washington, DC. They include (1) the SEC staff's views on reducing disclosure overload, simplifying accounting standards and challenging the design and effectiveness of internal control over financial reporting, (2) discussions about the joint projects of the FASB and the IASB, (3) comments from SEC and PCAOB representatives on audit quality and transparency and (4) the SEC staff's suggestions for year-end financial reporting.

Revised US GAAP/IFRS accounting differences identifier tool

We have updated our US GAAP/IFRS accounting differences identifier tool, which was developed to help entities that are converting from US GAAP to IFRS or that are evaluating the effects of IFRS adoption. This release generally reflects guidance effective in 2013 and guidance finalized by the FASB and the IASB before 31 May 2013, including IFRS 10, Consolidated Financial Statements, and IFRS 11, Joint Arrangements. It also contains a discussion of current standard-setting activities at the FASB and the IASB.


Standard Setter updates


Financial Accounting Standards Board (FASB)

2014 US GAAP XBRL Taxonomy released

The FASB made available the 2014 US GAAP Financial Reporting Taxonomy (2014 Taxonomy), along with a taxonomy viewer and guidance that describes changes from the 2013 Taxonomy.

The 2014 Taxonomy may be used for SEC XBRL Exhibit submissions only after it is adopted by the SEC, which is expected in the first half of 2014. Until then, companies should continue to use the 2013 or 2012 versions of the taxonomy.

18 December 2013 FASB meeting

Financial instruments: classification and measurement: To avoid further complicating the classification and measurement guidance for financial assets, the FASB decided not to pursue the solely payments of principal and interest model it proposed earlier this year and has jointly deliberated with the IASB. The FASB also decided to retain the existing guidance for bifurcating embedded derivatives from hybrid financial instruments and directed its staff to develop a model to simplify the classification and measurement of the host instrument that remains after bifurcation.

Financial instruments: impairment: The FASB tentatively decided to pursue a model that reflects lifetime expected credit losses on the balance sheet in light of the feedback it received on its December 2012 proposal and the staff's analysis during redeliberations. The staff therefore will continue to refine the "current expected credit loss model" the FASB proposed last year. It differs from the model the IASB is developing.

Transfers and servicing: repurchase agreements and similar transactions: The Board decided to proceed with its January 2013 proposal with certain modifications. The FASB decided not to include the implementation guidance it proposed for determining whether financial assets transferred and reacquired are substantially the same in the final standard. The Board also decided to require certain additional asset quality disclosures for repurchase agreements and securities lending transactions that are accounted for as secured borrowings, reversing its earlier decision to limit the new disclosures to certain transactions that achieve sale accounting even though the transferor retains substantially all of the exposure to the return of the transferred assets. Final guidance is expected in the first half of 2014 with an effective date for fiscal years beginning on or after 15 December 2014, and interim periods within those years.

The Board also discussed its project on Not-for-profit financial reporting: financial statements.

For additional details, see the FASB's Summary of Board Decisions.

Upcoming meetings and webcasts

No meetings are scheduled for the week of 23 December 2013. For additional details, see the FASB's calendar.

Education sessions

See the FASB's 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 updates standard for assurance engagements

The IAASB issued International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, which provides requirements and guidance for reasonable and limited assurance engagements other than audits or reviews of historical financial information. Conforming amendments were made to ISAE 3402, Assurance Reports on Controls at a Service Organization; ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, and ISAE 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus. ISAE 3000 (Revised) is effective for engagements with reports dated on or after 15 December 2015.

Government Accounting Standards Board (GASB)

GASB Report

The November 2013 issue of the GASB Report is available in AccountingLink.

Upcoming Thought Center webcasts and podcasts


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16 January 2014, 12:00 p.m. Eastern time

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