US Week in Review - Week ending 8 March 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
Many companies will have to change how they present comprehensive income under Accounting Standards Updates 2011-05 and 2011-12. The new guidance is effective for public companies for fiscal years, and interim periods within those years, beginning after 15 December 2011. This means the first quarter of 2012 for calendar year-end public companies. For nonpublic companies, the amendments are effective for fiscal years ending after 15 December 2012 and interim and annual periods thereafter. Retrospective application is required. Early adoption is permitted. Our Technical Line publication describes the new requirements.
Our new edition of Practical matters for the c-suite, To consolidate or not to consolidate - that is the question, complements our Technical Line and To the Point publications on the FASB's exposure draft on consolidation accounting and explores in more detail how the proposal would affect an organization's finance, tax and business processes. The Practical matters for the c-suite series is produced by our Financial Accounting Advisory Services (FAAS) group and is intended to help companies assess the potential effects of accounting proposals on their organizations.
Standard Setter updates
Financial Accounting Standards Board (FASB)
7 March 2012 FASB meeting
Insurance contracts - The FASB tentatively decided that investment contracts with discretionary features will not be scoped into the insurance contracts standard. The decision differs from the IASB's conclusion to explicitly scope in such contracts if they are written by insurers.
Agenda decision - The FASB added a project to its agenda to revisit the definition of a nonpublic entity. Currently, the Codification includes several definitions of private companies, resulting in questions about which was being used in different projects, and which nonpublic entities would qualify for practical expedients, reduced disclosures, and deferred effective dates. The project will focus on differentiating between types of entities for standard-setting purposes and establishing which companies will be included in the scope of the Private Company Decision-Making Framework that is being developed.
For additional detail of the Board's discussion, see the FASB's Action Alert.
Upcoming meetings and webcasts
12 March 2012 - 2012 Chairman's Outlook on the FASB webcast
The FASB's Chairman will discuss the Board's priorities for 2012 during a live webcast. For additional details, see the FASB site.
15 March 2012 - EITF meeting
The Task Force is scheduled to discuss:
- Issue No. 11-A, Parent's Accounting for the Cumulative Translation Adjustment (CTA) upon the Sale or Transfer of a Group of Assets within a Foreign Subsidiary That Meets the Definition of a Business
- Issue No. 12-A, Not-for-Profit Entities: Classification of Gifts of Securities Immediately Sold In the Statement of Cash Flows
- Issue No. 12-B, Not-for-Profit Entities: Contributed Services from an Affiliate
- Issue No. 12-C, Subsequent Accounting for an Indemnification Asset Recognized as a Result of a Government-Assisted Acquisition of a Lending Institution
- Issue No. 12-D, Accounting for Joint and Several Liability for Which the Total Amount of the Obligation is Fixed
- Issue No. 12-E, Accounting for Fair Value Information That Arises Subsequent to the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs
16 March 2012 - Public roundtable meetings
Morning session: Public roundtable meeting on the FASB's Exposure Draft on Investment companies, the IASB's Exposure Draft on Investment entities, and the FASB's Exposure Draft on Investment Property Entities (9:00 a.m. - 12:30 p.m. EDT)
Afternoon session: Public roundtable meeting on the FASB's Exposure Draft on Investment companies and the IASB's Exposure Draft on Investment entities (1:30 p.m. - 3:30 p.m. EDT)
See the FASB calendar for upcoming education sessions. No decisions are made at these sessions.
International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)
IAASB issues Q&A document on professional skepticism
The IAASB recently issued a Q&A publication, Professional Skepticism in the Audit of Financial Statements. The publication focuses on the requirements in the International Standards of Auditing (ISAs) and the IAASB's quality control standard that discuss the application of professional skepticism during an audit of financial statements. The document addresses what audit firms and auditors can do to enhance awareness of the importance of professional skepticism and identify aspects of an audit where professional skepticism may be particularly important.
COSO releases thought paper on enhancing board oversight by avoiding and challenging traps and biases in professional judgement
COSO has released Enhancing Board Oversight: Avoiding Judgment Traps and Biases, a thought-paper detailing a five-step judgment process that board members and others can use to overcome common pitfalls and mitigate the effects of judgment bias.
Upcoming Thought center webcasts and podcasts
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
The Ernst & Young Q1 2012 financial reporting update
Co-sponsored by Financial Executives International
22 March 2012, 1:00 p.m. Eastern time
Accounting for income taxes: a quarterly perspective
27 March 2012, 11:00 a.m. Eastern time