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US Week in Review - Week ending 26 January 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.

Certain materials referenced below are available exclusively in AccountingLink. The site is available free of charge, but requires a one-time registration.

Ernst & Young publications


To the Point: FASB tries to simplify impairment test for indefinite-lived intangibles

Based on concerns raised by financial statement preparers about recurring costs and the complexity of calculating the fair value of indefinite-lived assets for impairment testing, the FASB issued a proposed ASU to simplify the impairment test. The proposal would give companies the option to perform a qualitative assessment (similar to the one introduced by ASU 2011-08 for goodwill) to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. Comments are due by 24 April 2012. Our To the Point publication summarizes what you need to know about the proposal.

Technical Line: How to avoid XBRL errors in certain registration statements

The SEC staff recently identified common errors in XBRL submissions related to non-IPO registration statements. Our Technical Line publication describes these errors and provides an overview of the XBRL Exhibit requirements along with best practices for complying with the rules.

2011 SEC Comments and Trends media and entertainment industry supplement

Our media and entertainment (M&E) 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 M&E companies.

This publication is based on our review of 85 public comment letters issued to more than 45 M&E registrants between June 2010 and November 2011. It should be read in conjunction with our October 2011 SEC Comments and Trends, which discusses matters that relate to all registrants.

Financial Reporting Developments - Fair value measurement

We have updated our Financial reporting developments publication, Fair value measurement. This edition includes recent standard-setting activities, including the issuance of ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, as well as further enhancements to our interpretive guidance.

Practical matters for the c-suite, SEC reminder: management is responsible for the output provided by third-party pricing services

Our new edition of Practical matters for the c-suite, SEC reminder: management is responsible for the output provided by third-party pricing services, complements our recent Technical Line publication on the SEC's focus on a company's internal controls over the use of prices and related information obtained from third-party pricing services - information that is then reported in the company's financial statements. The Practical Matters for the c-suite series is produced by our Financial Accounting Advisory Services (FAAS) group and is intended to offer practical insights around significant financial reporting and accounting issues.

Have you ordered your printed copies of FRDs and SEC financial reporting series?

We have updated the following publications and prepared printed copies that you can now order online from AccountingLink:

  • Business combinations FRD
  • Derivative instruments and hedging activities FRD
  • Share-based payments FRD
  • 2011 SEC annual reports - Form 10-K
  • 2012 proxy statements - An overview of the requirements
  • 2012 SEC quarterly reports - Form 10-Q
  • 2011 SEC Comments and Trends

If you need to order multiple copies, please contact your Ernst & Young representative.


Standard Setter updates


Financial Accounting Standards Board (FASB)

Upcoming meetings and webcasts

27 January 2012 Joint FASB/IASB videoconference meeting

The FASB and the IASB will jointly discuss the following projects:

  • Accounting for financial instruments: classification and measurement - The Boards will discuss the convergence efforts on aligning the classification and measurement models under IFRS 9 and the FASB tentative model.
  • Accounting for financial instruments: impairment - The Boards will discuss the "three bucket" approach for impairment of financial assets, including the application of the credit deterioration model to purchased financial assets with evidence of credit deterioration.

31 January 2012 meeting with the FASB's Investors Technical Advisory Committee (ITAC)

FASB members will meet with ITAC to discuss matters of mutual interest.

See the FASB calendar for further details on these meetings.

Education sessions

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

Securities and Exchange Commission (SEC)

Division of Corporation Finance updates Financial Reporting Manual

The SEC staff released an updated version of its Financial Reporting Manual (FRM) that clarifies the staff's positions on an auditor's association with the cumulative amounts reported by development-stage companies, the geographic location of the principal auditor relative to the registrant and when separate financial statements of the target may be required in a step acquisition.

The section on foreign private issuers was revised to conform with provisions of the SEC's Foreign Issuer Reporting Enhancements, which became effective this year for calendar year-end foreign private issuers. The staff also added disclosure considerations to its recent guidance on subsidiary guarantee release provisions and revised its position on scope limitations in attestation reports on internal control over financial reporting to request that any disclaimed opinions be pre-cleared before filing.

The FRM, prepared by the Division of Corporation Finance (Corp Fin) staff, is designed to provide general guidance only to Corp Fin staff. However, because the information is useful to registrants and their auditors, the SEC staff posts it on the SEC web site.

It's a leap year! Don't forget to adjust your year-end reporting calendar

As SEC registrants with calendar year-ends prepare annual reports on Form 10-K, we would like to remind them of the SEC's filing deadlines for 2011 10-Ks. As a result of the extra leap day (29 February 2012), the filing deadlines are as follows:

  • Large accelerated filers (60 days after year-end) - Wednesday, 29 February 2012
  • Accelerated filers (75 days after year-end) - Thursday, 15 March 2012
  • Non-accelerated filers (90 days after year-end) - Friday, 30 March 2012

Further, registrants incorporating by reference information required by Part III (Items 10 through 14) of Form 10-K from their definitive proxy or information statement must file the proxy or information statement with the SEC no later than 120 days after year-end, or 30 April 2012 since the 120th day is a Sunday. If the information called for by these items cannot be incorporated by reference, it must either be included in the Form 10-K or included by amendment on Form 10-K/A also no later than 120 days after year-end, or 30 April 2012.

Registrants subject to XBRL rules also should remember to allow sufficient time for creating the XBRL exhibit to their Form 10-K, which has the same filing deadline as the Form 10-K. In particular, registrants designated as large accelerated filers that are now in their second year of compliance with the XBRL rules should plan appropriately to provide XBRL detail tags covering the financial statement footnotes and schedules (rather than tagging entire notes and schedules as blocks of text, as they were permitted to do in their first year of XBRL compliance).

International Accounting Standards Board (IASB)

Yael Almog appointed as Executive Director of the IFRS Foundation

The Trustees of the IFRS Foundation, the oversight body of the IASB, have announced the appointment of Yael Almog as Executive Director of the IFRS Foundation. Ms. Almog will be responsible for the management of the day-to-day operations of the organization and provide executive leadership in support of the work of the Trustees. Her appointment follows the departure of Tom Seidenstein, Chief Operating Officer, who after more than 10 years of service left the Foundation to return to the United States.

Upcoming Thought center webcasts and podcasts


Domestic tax quarterly webcast series: a focus on state tax matters
8 February 2012, 1:00 p.m. Eastern time

2011-12 Tax risk and controversy survey
A new era for global risk and uncertainty
9 February 2012, 10:00 a.m. Eastern time

Bottom-line benefits of sustainable business practices 
Global survey results and discussion of action steps - a webcast by Ernst & Young LLP and GreenBiz
19 March 2012, 1:00 p.m. Eastern time

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