US Week in Review - Week ending 19 July 2012
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
The Securities and Exchange Commission (SEC) staff issued its Final Report on its IFRS Work Plan summarizing its findings about a possible move to a set of global accounting standards. The report does not include a recommendation to the Commission about whether or how to incorporate IFRS into the US financial reporting system. The report notes that the Commission has not yet made a policy decision. We don't expect a decision before 2013. Our To the Point publication summarizes the report.
Standard Setter updates
Financial Accounting Standards Board (FASB)
Onerous test dropped from revenue model
In a significant change to their exposure drafts, the FASB and the IASB today tentatively decided to remove the proposed requirement for an onerous test. Instead, the Boards indicated they will rely on existing guidance in US GAAP and IFRS for the time being to determine whether a reserve for a loss contract is needed.
In addition, the Boards supported the staffs' recommendations to clarify the requirements for identifying separate performance obligations and the criteria for determining whether performance obligations are satisfied over time or at a point in time. They asked the staffs to perform additional analysis on licenses and rights to use.
16-19 July 2012 joint FASB-IASB videoconference meeting
The Boards discussed the following projects:
- Investment companies
- Accounting for financial instruments: classification and measurement
- Accounting for financial instruments: impairment
- Revenue recognition (see above article)
For additional details, see the FASB Action Alert.
Upcoming meetings and webcasts
25 July 2012 FASB meeting
The Board is scheduled to discuss its insurance contracts project.
For additional details of the planned discussion, see the FASB calendar.
See the FASB calendar for upcoming education sessions. No decisions are made at these sessions.
Securities and Exchange Commission (SEC)
Paul Beswick named Acting Chief Accountant
Paul Beswick was named Acting Chief Accountant of the SEC's Office of the Chief Accountant. The former SEC Chief Accountant, James Kroeker, left the SEC last Friday.
Mr. Beswick joined the SEC as Senior Advisor to the Chief Accountant in September 2007. In September 2008, Mr. Beswick became the SEC's Deputy Chief Accountant for Professional Practice, responsible for oversight of the PCAOB, resolution of auditor independence issues and monitoring audit and independence standard setting. In
November 2009, Mr. Beswick became the SEC's Deputy Chief Accountant for Accounting, responsible for the resolution of accounting issues and oversight of the FASB. In that role, Mr. Beswick served as the staff director of the multi-year effort to help the Commission evaluate the implications of incorporating IFRS for US companies.
Prior to joining the SEC, Mr. Beswick was a partner in Ernst & Young's Professional Practice Group in New York. From July 2005 to June 2007, Mr. Beswick served as a FASB Practice Fellow.
International Accounting Standards Board (IASB)
Response to US SEC publication of staff report on IFRS
The Trustees of the IFRS Foundation note that the SEC staff published a staff report on 13 July 2012 representing the final element of a Work Plan for global accounting standards. The Work Plan, initiated in 2010, is intended to assist the Commission in determining whether and how to incorporate IFRSs into the US financial reporting regime (see our To the Point above).
For comments from Michel Prada, Chairman of the Trustees, and Hans Hoogervorst, Chairman of the IASB, see the IASB website.
International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)
FAC 2012 handbooks issued
The following handbooks have been released:
2012 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements
The 2012 edition of the International Auditing and Assurance Standards Board (IAASB) handbook includes new and revised standards that have been issued and separately announced over the past year.
This two-part handbook was last issued in 2010. In finalizing the 2012 handbook, editorial and formatting changes were made to some ISAs from the 2010 handbook.
2012 Handbook of the Code of Ethics for Professional Accountants
The 2012 edition of the International Ethics Standards Board for Accountants (IESBA) handbook contains the entire Code of Ethics for Professional Accountants, effective 1 January 2011. This edition includes a new introduction and editorial amendments and replaces the 2010 edition of the IESBA handbook.
Upcoming Thought center webcasts and podcasts
International tax quarterly update: The benefits to be gained from corporate simplification
26 July 2012, 10:00 a.m. Eastern time