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US Week in Review - Week ending 3 July 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


To the Point: FASB seeks comment on three Private Company Council proposals

The FASB issued proposals that would allow private companies to apply alternatives under US GAAP when accounting for intangible assets in a business combination, goodwill and certain hedges involving interest rate swaps. The alternatives were the first developed by the Private Company Council. Our To the Point publication tells you what you need to know about the proposals.

SEC in Focus - July 2013 edition

Our latest newsletter summarizes developments relating to SEC matters, including certain items we have not previously reported in Week in Review. This issue highlights the SEC's recent proposal for money market funds and the SEC staff's progress on the rulemaking mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Jumpstart Our Business Startups Act. It also points out a number of personnel changes.

To the Point: Management would have to assess going concern uncertainties

The FASB has proposed requiring management to assess uncertainties that could affect a company's ability to continue as a going concern in the 24 months after the financial statement date and to provide disclosures when certain thresholds are met. Our To the Point publication tells you what you need to know about the proposal.


Standard Setter updates


Financial Accounting Standards Board (FASB)

New FASB chairman

On 1 July 2013, Russell G. Golden became the chairman of the FASB, succeeding Leslie Seidman, whose term ended on 30 June 2013.

Joint roundtable meetings on leases

The FASB and the IASB said they will host several joint public roundtable meetings in September and October 2013 on their May 2013 joint proposals on leases to give users, preparers and auditors an opportunity to discuss the proposals with the Boards.

Upcoming meetings and webcasts

10 July 2013 FASB meeting

The FASB is scheduled to discuss its project on the definition of a nonpublic entity. 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.

Securities and Exchange Commission (SEC)

New initiatives for SEC's Division of Enforcement

The SEC announced three new Enforcement initiatives to use technology and analytics to identify high-risk areas in the market and inform its investigations. These initiatives include:

  • Establishing a Financial Reporting and Audit Task Force that will focus on detecting accounting and financial reporting fraud using various methods. One method includes the Accounting Quality Model that is being developed by the Division of Economic and Risk Analysis (formerly the Division of Risk, Strategy and Financial Innovation).
  • Creating the Microcap Fraud Task Force aimed at combating fraudulent conduct in the microcap securities market, especially cases involving serial violators, organized syndicates or shell companies.
  • Establishing the Center for Risk and Quantitative Analytics, which will work closely with other Offices and Divisions within the SEC, to identify patterns that could indicate potential fraud or misconduct that would harm investors.

District court judge vacates resource extraction payments rule

A judge in the US District Court for the District of Columbia vacated a new SEC rule that would have required resource extraction issuers to disclose payments made to US and foreign governments beginning 1 October 2013.

In his opinion dated 2 July 2013, the judge cited two errors in the SEC's interpretation of Section 1504 of the Dodd-Frank Act as the basis for sending the final rule back to the SEC. First, the judge ruled that the SEC misinterpreted Section 1504 by mandating public disclosure by each registrant subject to the rule. The judge concluded that, although the Dodd-Frank Act requires disclosure of information by registrants to the SEC, it "says nothing about whether the disclosure must be public or may be made to the Commission alone." Instead, the Dodd-Frank Act directs the SEC to make public a compilation of the payment data submitted by registrants. In addition, the judge found that the SEC's rejection of any exemption for payments in specific countries that prohibit public disclosure was "arbitrary and capricious." The judge found that a "fuller analysis was warranted" in evaluating whether to provide such an exemption.

It was not immediately clear whether the SEC would appeal the Court's ruling or revise its resource extraction payments rule or issue a new proposal to implement Section 1504 of the Dodd-Frank Act.

Government Accounting Standards Board (GASB)

Implementation guide for pension plans

The GASB issued an implementation guide for its new standard for state and local government pension plans, which is effective for periods beginning after 15 June 2013. The Guide to Implementation of GASB Statement 67 on Financial Reporting for Pension Plans is an authoritative resource that addresses the following topics:

  • The scope and applicability of GASB 67
  • The classification of pensions as defined benefit or defined contribution
  • The determination of the number of pension plans that should be reported
  • The recognition of certain transactions and other events in defined benefit pension plan financial statements
  • Note disclosures and required supplementary information
  • The calculation of the net pension liability

Proposal addresses transition issue in pension standards

The GASB issued a proposed Statement, Pension Transition for Contributions Made Subsequent to the Measurement Date, an amendment of GASB Statement No. 68, that would eliminate a potential source of understatement of restated beginning net position and expense in a government's first year of implementing GASB Statement No. 68, Accounting and Financial Reporting for Pensions.

The proposed Statement would require a state or local government, when transitioning to GASB 68, to recognize a beginning deferred outflow of resources for its pension contributions made during the time between the measurement date of the beginning net pension liability and the beginning of the initial fiscal year of implementation.

The provisions would be effective simultaneously with Statement 68, which is required to be applied in fiscal years beginning after 15 June 2014.

International Accounting Standards Board (IASB)

June edition of IFRS for SMEs Update

The June 2013 edition of IFRS for SMEs Update contains the latest news for small and medium-sized entities.

Upcoming Thought Center webcasts and podcasts


Environmental sustainability in financial services
5 July 2013, 6:00 a.m. Eastern time

IASB’s revised ED on Insurance Contracts
Hosted by the EY Global Insurance Center
10 July 2013, 10:00 a.m. Eastern time

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