US Week in Review - Week ending 4 April 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 Ernst & Young.
Ernst & Young publications
The FASB proposed raising the threshold for reporting a discontinued operation (e.g., a separate major line of business or major geographical area) and permitting an increased level of ongoing involvement (e.g., allowing for continuing cash flows and significant continuing involvement). The proposal would require additional disclosures about discontinued operations and new disclosures about certain individually material disposal transactions that would not meet the definition of a discontinued operation. Comments are due by 30 August 2013. Our To the Point publication summarizes the proposal.
Our latest newsletter summarizes developments relating to SEC matters, including items we have not previously reported in Week in Review. This issue highlights the status of Mary Jo White's nomination to be SEC chair, as well as the SEC staff's progress on rulemaking and other initiatives. It also discusses recent securities markets activity, including the SEC's approval of the listing standards for compensation committees and NASDAQ's recent proposal for its listed companies to have an internal audit function.
In our letter, we generally agree that repurchase-to-maturity agreements with characteristics described in the FASB's proposal should be accounted for as secured borrowings. However, we also recommend that the FASB more broadly re-examines the accounting for the derecognition of financial assets.
Standard Setter updates
Financial Accounting Standards Board (FASB)
FASB proposes changes to reporting of discontinued operations
See our To the Point publication above.
Upcoming meetings and webcasts
10 April 2013 FASB meeting
The FASB is scheduled to discuss its project on leases.
The FASB also is scheduled to discuss adding to its agenda a project on whether to allow private company employee benefit plans to exclude certain fair value measurement disclosures about the employers' securities they hold.
For additional details, see the FASB's calendar.
See the FASB's calendar for upcoming education sessions. No decisions are made at these sessions.
Securities and Exchange Commission (SEC)
SEC says companies may use social media sites to announce material information
The SEC said in a Report of Investigation that companies may use social media sites such as Facebook and Twitter to communicate material information, as long as they tell investors in advance which outlets they intend to use and the types of information they may disclose.
The Commission emphasized that communications made through social media must comply with Regulation Fair Disclosure (Regulation FD), which requires companies to distribute material information to the public broadly and nonexclusively. The SEC addressed these requirements in its 2008 Guidance on the Use of Company Web Sites, which it confirmed also should be followed when using social media sites. In its new Report, the SEC states, "Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information. Without adequate notice that such a site may be used for this purpose, investors would not have an opportunity to access this information or, in some cases, would not know of that opportunity, at the same time as other investors."
Investor Advisory Committee to meet next week
The SEC announced that its Investor Advisory Committee will meet on 11 April 2013 to consider a recommendation about how to improve information investors receive about target date funds and discuss subcommittee reports. The meeting will be webcast on the Commission's website.
Advisory Committee on Small and Emerging Companies finalizes recommendations
The Advisory Committee on Small and Emerging Companies recently issued to the SEC its final recommendations that were discussed at the Committee's 1 February 2013 meeting. The final recommendations are substantially consistent with those discussed by the Committee in February.
Government Accounting Standards Board (GASB)
FAF names David A. Vaudt Chairman of the GASB
The Board of Trustees of the Financial Accounting Foundation (FAF) has named Iowa Auditor of State David A. Vaudt as the next chairman of the GASB, effective 1 July 2013. Mr. Vaudt was appointed to a seven-year term. Mr. Vaudt has served as Iowa's elected auditor of state since January 2003.
International Accounting Standards Board (IASB)
March edition of IFRS for SMEs Update
The March 2013 edition of IFRS for SMEs Update contains the latest news for small and medium-sized entities.
IASB issues Request for Information on Rate Regulation
The IASB has issued a Request for Information as an early step in its reactivated Rate-regulated Activities research project. The IASB intends to identify a range of rate regulatory schemes to help determine the scope of the research project. The deadline for responses is 30 May 2013.
Committee of Sponsoring Organizations of the Treadway Commission (COSO)
COSO to release updated Internal Control-Integrated Framework: 2013 and related documents in May
COSO said its Board approved the updated Internal Control-Integrated Framework: 2013, and it expects to issue the updated framework and related documents on 14 May 2013.
The COSO Board said it will continue to make the original framework available until 15 December 2014, when it will be considered superseded. The Board noted that, because the key concepts and principles in the original framework are fundamentally sound, continuing to use it during the transition period would be appropriate.
Upcoming Thought center webcasts and podcasts
Corporate end users and Title VII of Dodd-Frank
26 April 2013, 12:00 p.m. Eastern time
The IASB proposes a new expected credit loss model
30 April 2013, 11:00 a.m. Eastern time