US Week in Review - Week ending 19 September 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

    September 2013 Financial reporting briefs issued

    We have issued the general and industry-specific September 2013 editions of Financial reporting briefs. These publications provide you with a snapshot of the major accounting and regulatory developments that have occurred 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.

    The general Financial reporting briefs, and the industry-specific editions are available on AccountingLink.

    Financial services

    Health care

    Life sciences

    Media and entertainment

    Oil and gas

    Real estate



    Accounting pronouncements effective for the third quarter of 2013

    Several new accounting pronouncements are effective for the third quarter of 2013 for calendar-year entities. We have listed those pronouncements in our document, along with descriptions of related EY publications. All entities should carefully evaluate which accounting requirements apply to them for the first time.

    EITF Update: September 2013

    The Emerging Issues Task Force (EITF) reached consensuses-for-exposure on the following issues:

    • Determining Whether a Performance Target That Can Be Achieved after the Requisite Service Period Is a Performance Condition or a Condition That Affects the Grant-Date Fair Value of the Awards
    • Determining Whether the Host Contract in a Hybrid Financial Instrument Is More Akin to Debt or Equity

    In addition, the EITF discussed the accounting for investments in affordable-housing projects but didn't reach a final conclusion.

    Our EITF Update publication explains what you need to know about these issues.

    To the Point: FASB chairman sets new priorities

    The FASB is setting new priorities under Russell Golden, who took over as chairman on 1 July, and James Kroeker, who joined the FASB as vice chairman on 1 September. The Board is currently focused on completing major convergence projects with the IASB. Mr. Golden also is looking beyond those projects and plans to focus on topics such as disclosure effectiveness, debt and equity, issues in pension and hedge accounting, as well as operational issues. This To the Point discusses what you need to know about the FASB's priorities.

    To the Point: Boards' deliberations on remaining topics delay final revenue standard

    In response to concerns raised by constituents, the Boards this week continued to discuss how the joint revenue recognition standard will address collectibility, the constraint on variable consideration and the accounting for revenue from licenses of intellectual property. They decided that further discussions are necessary. As a result, we do not expect the standard to be issued until late this year at the earliest. Our To the Point publication summarizes the discussion at this week's meetings.

    To the Point: SEC proposes rule requiring most companies to disclose 'pay ratio'

    As mandated by the Dodd-Frank Act, the Securities and Exchange Commission (SEC) proposed a rule that would require most registrants to calculate and disclose the ratio of their principal executive officer's total annual compensation to the median annual compensation of all other employees (the pay ratio). The SEC's proposal would give companies significant flexibility in how to calculate the pay ratio. Our To the Point publication summarizes what you need to know about the proposed rule.

    EY comment letter on the Boards' joint proposal on lease accounting

    In our comment letter to the FASB and the IASB, we said we were unable to support the Boards' proposal on lease accounting because it is unclear to us whether the proposal would significantly improve the decision-useful information available to financial statement users. We also said it is unclear to us whether any of the perceived benefits to financial statement users would justify the costs and complexity of applying the exposure draft. We also noted that if the Boards continue to pursue the proposed approach, we believe they must address a number of conceptual and application issues to make the proposal operational.

    Standard Setter updates

    Financial Accounting Standards Board (FASB)

    13 September 2013 Emerging Issues Task Force (EITF) meeting

    For details, see our September 2013 EITF Update publication above.

    17-18 September 2013 joint FASB-IASB meeting

    Classification and measurement of financial instruments: The FASB and the IASB began joint redeliberations on the proposed cash flow characteristics assessment. The staff presented recommendations to address constituents' concerns that the assessment would require certain financial instruments to be inappropriately measured at fair value with changes in fair value recognized in earnings. The Boards discussed the definitions of principal and interest, features that have a de minimis effect on the cash flows of an instrument, contingent features and prepayment features. The FASB and the IASB reached different tentative decisions to address constituents' concerns in these areas, but they agreed to discuss a revision to a key alternative in a future meeting that could lead to a converged solution.

    The Boards also discussed their projects on:

    • Accounting for financial instruments: impairment
    • Revenue recognition (see our To the Point publication above)

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

    Upcoming meetings and webcasts

    No meetings are scheduled for the week of 23 September 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.

    American Institute of CPAs (AICPA)

    AICPA issues whitepaper on assurance services

    The Assurance Services Executive Committee (ASEC) of the AICPA has released a whitepaper on the importance of independent assurance services to the reliability of reported information, entitled Assurance Services: A White Paper for Providers and Users of Business Information.

    AICPA issues guidance on performing agreed-upon procedures for XBRL-formatted information

    The AICPA issued Statement of Position (SOP) 13-2, Performing Agreed-Upon Procedures Engagements That Address the Completeness, Mapping, Consistency, or Structure of XBRL-Formatted Information. While the SOP provides guidance for practitioners, it also can be used by companies to identify and perform review procedures and to develop controls over the XBRL creation process.


    Amendments to SEC rules for broker-dealers webcast to air 20 September

    There is still time to register for EY's Thought Center Amendments to SEC rules for broker-dealers webcast on 20 September from noon to 1:30 p.m. Eastern time. The amendments to the SEC rules are the most significant changes to broker-dealer reporting since the mid-1970s.

    This webcast will cover a summary of the rules, filing deadlines and effective dates and other considerations. Webcast participants are eligible for 1.5 CPE credits.

    To register, go to Amendments to SEC rules for broker-dealers.

    Register now for the 2 October SEC Comments and Trends webcast

    Registration is now open for the SEC comments and trends: current reporting issues webcast on 2 October from 1:00 p.m. to 2:00 p.m. Eastern time. Participants can gain valuable insights into the SEC's comment letter process, including common areas of focus and recent trends, as they head into the year-end reporting season.

    The topics of discussion include:

    • A "behind-the-scenes" look at the SEC staff's filing review process
    • SEC comment letter hot topics, recent trends and emerging areas of focus
    • Best practices and tips for working with the SEC staff

    To register, go to SEC Comments and Trends.

    Upcoming Thought Center webcasts and podcasts

    Amendments to SEC rules for broker-dealers
    20 September 2013, 12:00 p.m. Eastern time

    Are you ready for conflict minerals reporting?
    26 September 2013, 7:00 a.m. Eastern time

    CFOs reveal hidden trends from earnings season
    30 September 2013, 12:00 p.m. Eastern time

    SEC comments and trends: current reporting issues
    2 October 2013, 1:00 p.m. Eastern time



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