US Week in Review - Week ending 28 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 SEC issued a final rule directing national securities exchanges to adopt minimum listing standards related to compensation committees and their use of advisers (i.e., compensation consultants, independent legal counsel and other advisers). The SEC also amended proxy rules to require new disclosures about whether the use of compensation consultants raised any conflicts of interest. Our To the Point publication summarizes the final rule, which is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Emerging Issues Task Force (EITF) reached two consensuses-for-exposure on services received by a not-for-profit entity from employees of an affiliated entity and the accounting for obligations with joint and several liability. The EITF also discussed one other issue, but didn't reach a final consensus. Our EITF Update publication explains what you need to know about these issues.
Standard Setter updates
Financial Accounting Standards Board (FASB)
FASB proposes risk disclosures for all entities
The FASB proposed requiring all entities to significantly expand their disclosures about risks inherent in financial instruments in their notes to their financial statements. All public, private and not-for-profit entities would be required to provide certain tabular disclosures about liquidity risk, along with discussions of the numbers. Financial institutions, as defined in the proposal, would be required to provide additional disclosures about interest-rate risk. Look for our upcoming Technical Line on the proposal.
27 June 2012 FASB meeting
The Board discussed its project on transfers and servicing: repurchase agreements and similar transactions.
For additional details of the Board's discussions, see the FASB Action Alert.
Upcoming meetings and webcasts
There are no meetings scheduled for the week of 2 July 2012 on the FASB calendar.
Government Accounting Standards Board (GASB)
GASB proposal addresses financial guarantees for state and local governments
The GASB issued for public comment proposed guidance for state and local governments that offer nonexchange financial guarantees and for governments that receive guarantees on their obligations. The proposals are contained in a GASB exposure draft, Accounting and Financial Reporting for Nonexchange Financial Guarantee Transactions.
The proposal would be effective for periods beginning after 15 June 2013. Early application would be encouraged. Disclosures related to cumulative amounts paid or received in relation to a financial guarantee could be applied prospectively and other provisions would be required to be applied retroactively. Comments are due by 28 September 2012.
GASB issues final standards on pension accounting for employers and plans
The GASB approved two new standards that will substantially change the accounting and financial reporting of public employee pensions by state and local governments. Statement No. 67, Financial Reporting for Pension Plans, revises existing guidance for the financial reports of most pension plans. Statement No. 68, Accounting and Financial Reporting for Pensions, revises and establishes new financial reporting requirements for most governments that provide their employees with pension benefits.
Statement 67 is effective for financial statements for periods beginning after 15 June 2013, while Statement 68 is effective for fiscal years beginning after 15 June 2014. Earlier application is encouraged for both statements. The statements will be available in early August.
International Accounting Standards Board (IASB)
IASB seeking views on IFRS for SMEs
As part of the IASB's first step in a comprehensive review of the IFRS for SMEs (issued in July 2009), the Board has issued a Request for Information seeking public views on whether amendments should be made to the IFRS for SMEs and if so, what amendments are necessary. Comments are due by 30 November 2012.
2012 IFRS - A Briefing for Chief Executives - now available
The IFRS Foundation announced that printed copies of 'IFRS - A Briefing for Chief Executives, Audit Committees & Boards of Directors 2012' are now available and can be ordered from their website.
This briefing has been specially prepared for chief executives, members of audit committees, boards of directors and others who want a broad overview of International Financial Reporting Standards (IFRSs), including International Accounting Standards (IASs).
International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)
IAASB issues ITC on improving the auditor's report
This Invitation to Comment (ITC) sets out the IAASB's proposed path to improve the future auditor's report. It features a revised auditor's report that illustrates a new Auditor Commentary section in which auditors may highlight certain matters that, in the auditor's judgment, are likely to be most important to users' understanding of the audited financial statements or the audit. Several other improvements are suggested, including new statements regarding going concern and other information in documents containing the financial statements and an enhanced description of the auditor's responsibilities. Comments are requested by 8 October 2012.
Upcoming Thought center webcasts and podcasts
Supreme Court Ruling on the Health Care Law: what companies need to consider
17 July 2012, 1:00 p.m. Eastern time
Evolving role of the CFO: the inaugural launch of FEI's CFO Community of Interest
Hosted by Ernst & Young LLP
18 July 2012, 2:00 p.m. Eastern time