US Week in Review - Week ending 21 June 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 volume of disclosures required in annual reports has grown sharply over the past two decades, largely fulfilling the prediction made in a 1994 study. Our To the Point publication updates the study of the average number of pages devoted to footnotes and Management's Discussion and Analysis in annual reports of a select group of companies and highlights the plans of the FASB and SEC staff to increase the effectiveness of disclosures.
Standard Setter updates
Financial Accounting Standards Board (FASB)
20 June 2012 FASB meeting
Reclassifications out of accumulated other comprehensive income - The FASB tentatively decided not to require presentation of reclassification adjustments out of accumulated other comprehensive income on the face of the financial statements and to propose new disclosures instead. The Board plans to issue an exposure draft this summer.
The Board also discussed classification and measurement of financial instruments.
For additional details of the Board's discussions, see the FASB Action Alert.
21 June 2012 EITF meeting
Look for our upcoming EITF Update publication for highlights of the meeting.
Upcoming meetings and webcasts
27 June 2012 FASB meeting
The Board is scheduled to discuss its projects on (1) transfers and servicing: repurchase agreements and similar transactions and (2) definition of a nonpublic entity.
For additional details of the planned discussions, see the FASB calendar.
See the FASB calendar for upcoming education sessions. No decisions are made at these sessions.
Securities and Exchange Commission (SEC)
SEC requires listing standards for compensation committees and advisers
The SEC approved a final rule directing national securities exchanges to adopt listing standards related to compensation committees and compensation advisers.
Under the rule, the standards must require that a member of a listed company's compensation committee be a member of the board of directors and be "independent." Independence is to be determined by each exchange after consideration of relevant factors. The standards also must require that a company's compensation committee consider independence when selecting and retaining compensation advisers.
The final rule requires proxy disclosure of a company's use of a compensation consultant, including whether that work has raised any conflicts of interest and, if so, how the conflicts are being addressed.
Exchanges must propose listing standards no later than 90 days after the final rule goes into effect, which is 30 days after publication in the Federal Register. The SEC has one year from effectiveness to approve any listing standards, but the new proxy disclosures are required for annual meetings of shareholders occurring on or after 1 January 2013. The rule is required by Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Chief Accountant to leave the SEC
The SEC announced that James L. Kroeker, its Chief Accountant, will leave the SEC in July 2012. Mr. Kroeker joined the SEC in 2007 as Deputy Chief Accountant and has been Chief Accountant since January 2009. In that role, he has counseled the Commission on a wide range of accounting and auditing issues, including its IFRS Work Plan.
International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)
2011 Annual Report of the IESBA
The International Ethics Standards Board for Accountants (IESBA) has issued its 2011 Annual Report, which summarizes the progress made on the Board's 2011 Work Plan, including key projects on conflicts of interest, addressing a breach of a requirement of the Code and responding to a suspected illegal act. It also outlines the Board's plans to update its 2012 Work Plan in response to matters under consideration by the European Commission, US Public Company Accounting Oversight Board and others.
Upcoming Thought center webcasts and podcasts
The lessons learned from year-end reporting
Hosted by Ernst & Young's Global IFRS Services
26 June 2012, 11:00 a.m. Eastern time
Accounting for income taxes: a quarterly perspective
26 June 2012, 1:00 p.m. Eastern time