AccountingLink

US Week in Review - Week ending 29 November 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


To the Point: Some health care entities may have to move bad debt expense - again

The FASB and the IASB tentatively decided that the effects of customer credit risk would be presented prominently as a separate line item in operating expense, rather than adjacent to revenue as previously proposed. Our To the Point publication summarizes how this decision in the joint revenue recognition project would affect health care entities.

To the Point: Boards explore a new direction on license arrangements

The FASB and the IASB tentatively decided that licenses of intellectual property would be treated as either "rights" transferred to a customer at a point in time or promises to provide "access" over time, depending on the nature of the license. We encourage companies to consider the indicators the Boards' staffs have developed to determine the nature of a license and to share their views about whether the approach is operational if they have concerns. Our To the Point publication summarizes this development in the revenue recognition project.

To the Point: FASB proposes limiting scope of new offsetting disclosure requirements

The FASB proposed limiting the scope of the new balance sheet offsetting disclosure requirements to certain derivatives, repurchase agreements and securities lending arrangements. In doing so, the FASB responded to concerns that the requirements, as written, would apply to many commercial contracts and that the cost of preparing the disclosures would be significant compared to the limited benefits. Comments are due by 21 December 2012. Our To the Point publication summarizes what you need to know about the proposal.

Updated publications on SEC financial reporting now available

We have updated our SEC Financial Reporting Series to reflect final SEC rules and interpretive guidance issued through 31 October 2012. The series is available on AccountingLink and includes the following publications:

  • 2012 SEC annual reports - Form 10-K
  • 2013 proxy statements - An overview of the requirements
  • 2013 SEC quarterly reports - Form 10-Q

The revised publications on annual and quarterly reports reflect the requirements for emerging growth companies (EGCs) and Accounting Standards Update 2011-05, Comprehensive Income. The annual reports publication also includes SEC staff guidance on cybersecurity disclosures and European sovereign debt exposures.

The proxy statement publication covers the new requirement that proxy materials include disclosures about whether the use of compensation consultants raised any conflicts of interest, recent trends in shareholder proposals and the scaled disclosures allowed for EGCs.

Hard copies of these publications can be ordered on AccountingLink.

Comment letter: More implementation guidance needed in a final revenue standard

In a recent comment letter, we applauded the FASB and the IASB for their commitment to smooth implementation of a final revenue standard. However, we recommended that the Boards provide additional implementation guidance to avoid diversity in practice.


Standard Setter updates


Financial Accounting Standards Board (FASB)

Upcoming meetings

FASB members and Private Company Council members are scheduled to meet on 6 December 2012. See the FASB calendar for details of upcoming meetings and education sessions.

Securities and Exchange Commission (SEC)

SEC Chairman Mary Schapiro to step down 14 December

After nearly four years leading the SEC, Mary Schapiro will step down as chairman on 14 December 2012. The White House announced that President Obama intends to designate current SEC commissioner Elisse Walter as the SEC chair, upon Schapiro's departure. Because Ms. Walter has already been confirmed by the Senate as a commissioner, she is able to be designated chairman without separate confirmation. Since Ms. Walter's term expired 5 June 2012, she can remain in the position until the end of 2013, unless formally reappointed by the President and confirmed by the Senate. Until a fifth commissioner is appointed and confirmed, the SEC will be comprised of two Democrats and two Republicans, which could make rulemaking more difficult.

International Accounting Standards Board (IASB)

IASB exposure draft Equity Method: Share of other net asset changes

The IASB has published an exposure draft (ED), Equity method: share of other net asset changes (proposed amendments to IAS 28). The ED proposes that an investor should recognize in its equity, net asset changes that are not recognized in profit or loss or other comprehensive income, or are not distributions received. Examples of the types of transaction that are likely to be included in 'other net asset changes' are movements in the share capital of the associate, and movements in other reserves, such as share-based payment reserves. The ED is open for comment until 22 March 2013.

November IFRC Update

The November 2012 IFRIC Update summarizes the IFRS Interpretations Committee meeting held in London on 13-14 November 2012.

International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)

IFAC Strategic Plan for 2013-2016

IFAC's Strategic Plan identifies the organization's strategic direction during the period of 2013-2016. It provides the rationale for the choices made in selecting certain strategies and services to be delivered to its various constituencies.

International Education Standard (IES 6)

The International Accounting Education Standards Board (IAESB) has released (IES) 6, Initial Professional Development - Assessment of Professional Competence. The revised education standard will help IFAC member bodies and other professional accountancy organizations understand the learning and development requirements for assessing professional competence, and their obligations in upholding the standards.

IAASB exposure draft on ISA 720 (Revised)

The IAASB has issued for public comment a proposed International Standard on Auditing (ISA) 720 (Revised), The Auditor's Responsibilities Relating to Other Information in Documents Containing or Accompanying Audited Financial Statements and the Auditor's Report Thereon. Comments are due on 14 March 2013.

Upcoming Thought center webcasts and podcasts


The Ernst & Young Q4 2012 financial reporting update
Co-sponsored by Financial Executives International (FEI)
13 December 2012, 1:00 p.m. Eastern time

Download

Connect with us