US Week in Review - Week ending 18 October 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
Accounting Standard Update (ASU) 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-lived Intangible Assets for Impairment, introduced an optional qualitative assessment for testing indefinite-lived intangible assets for impairment that may allow companies to avoid the annual calculation of the assets' fair value.
This Technical Line publication provides a framework for companies to consider when determining whether and how to apply the guidance and an example of a hypothetical company's qualitative assessment.
Our comment letter supports the FASB's proposal to require the presentation of items reclassified out of accumulated other comprehensive income (AOCI) in the notes to the financial statements rather than on the face of the financial statements as previously proposed. We are also supportive of the Board's decision to not require breakout and disclosure of amounts included in net income for items that are not reclassified into net income in their entirety (e.g., items that are capitalized on reclassification out of AOCI and recognized in income at a later date). However, we believe the usefulness of disclosures that are proposed is compromised by the lack of conceptual basis for OCI and related reclassifications.
Standard Setter updates
Financial Accounting Standards Board (FASB)
15, 17, 18 October 2012 joint FASB-IASB videoconference meetings
The Boards discussed their projects on:
- Insurance contracts
- Revenue recognition
For details, see the FASB Action Alert.
15, 17 October 2012 FASB meetings
The FASB discussed its projects on insurance contracts and on accounting for financial instruments: classification and measurement.
For details, see the FASB Action Alert.
Upcoming meetings and webcasts
19 October 2012 FASB meeting
The FASB is scheduled to discuss its project on accounting for financial instruments: classification and measurement.
For additional details, see the FASB calendar.
There are no open meetings scheduled for the week of 22 October 2012.
See the FASB calendar for upcoming education sessions. No decisions are made at these sessions.
International Accounting Standards Board (IASB)
September IASB Update
The September 2012 issue of IASB Update contains the staff summary of the IASB-only and joint meetings of the IASB and FASB, held 20-28 September 2012.
Government Accounting Standards Board (GASB)
September 2012 GASB Report
The September 2012 GASB Report summarizes key GASB projects and events.
Tools released to assist audit committees
The National Association of Corporate Directors (NACD) released the Audit Committee Annual Evaluation of the External Auditor, a tool intended to help audit committees evaluate the quality of audit services, including the auditor's independence, objectivity and professional skepticism.
The tool was developed through a collaborative effort of organizations representing both corporate board members and the audit profession. The group included the Center for Audit Quality, the Association of Audit Committee Members Inc., Corporate Board Member/NYSE Euronext, the Independent Directors Council, the Mutual Fund Directors Forum and Tapestry Networks.
The tool includes a brief discussion of an audit committee's assessment process, followed by sample questions. The questions are intended to help audit committees evaluate the quality of services and the sufficiency of resources provided by the auditor, the quality of the communications and interactions between the audit committee and the auditor, and the auditor's independence, objectivity and professional skepticism. The tool also includes a sample form to help audit committees obtain input from company personnel. We encourage audit committees to consider using it when performing their evaluations.