US Week in Review - Week ending 30 May 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.
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
The FASB and the IASB tentatively agreed that the new revenue recognition standard will not specifically address credit card reward programs. The FASB also clarified that the new standard should be applied to transfers of in-substance nonfinancial assets to noncustomers. Our To the Point publication summarizes these decisions.
In our comment letter, we say that we do not support the proposed reorganization at this time. While we agree that reorganizing the standards may help users navigate them more easily, we disagree with the PCAOB's assertion that the proposed reorganization would help avoid confusion between the PCAOB's standards and the recently reorganized standards of the ASB or that the proposed structure would facilitate comparison of PCAOB and IAASB standards. We believe a better solution would be to have one common framework for auditing standards that clearly demonstrates the performance differences for audits of issuers and non-issuers. Therefore, we recommend that the PCAOB collaborate with the IAASB and the AICPA to develop such a framework that standard setters could then customize. We also provide detailed comments on the proposal, in the event the PCAOB decides to move forward with the reorganization.
Standard Setter updates
Financial Accounting Standards Board (FASB)
FASB responds to FAF's PIR report on business combinations
The FASB issued a response to the Financial Accounting Foundation's post implementation review (PIR) report on FAS 141R, Business Combinations.
FASB seeking participants for field study on disclosures
The FASB is seeking entities to participate in a field study as part of its disclosure framework project. The study will evaluate the use of discretion by reporting entities in financial statement disclosures.
24 May 2013 joint FASB-IASB videoconference meeting
The Boards discussed their projects on:
- Revenue recognition (see our To the Point above)
- Accounting for financial instruments: classification and measurement
29 May 2013 FASB meeting
The FASB discussed:
- An agenda decision on clarifying the definition of a business
- Its project on financial statement presentation by not-for-profit entities
For additional details, please see the Summary of Board Decisions.
Upcoming meetings and webcasts
6 June 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.
See the FASB's calendar for upcoming education sessions. No decisions are made at these sessions.
Securities and Exchange Commission (SEC)
SEC staff issues FAQs on conflict minerals and disclosures by resource extraction issuers
The Division of Corporation Finance released FAQs on the SEC's rules on conflict minerals and disclosure of payments by resource extraction issuers.
Piwowar and Stein nominated to serve as SEC Commissioners
President Obama nominated Michael Piwowar and Kara Stein to serve as SEC Commissioners. Mr. Piwowar is the chief economist for the Senate Banking Committee. He previously served as senior economist on the Council of Economic Advisers under President Obama and George W. Bush, a senior economist at the SEC and as a principal at Securities Litigation and Consulting Group Inc. Ms. Stein is a senior policy adviser and legal counsel to Sen. Jack Reed and helped draft portions of the Dodd-Frank Act. She also served as staff director of the Senate Banking Securities Subcommittee from 2009 to 2013.
If confirmed by the Senate, Mr. Piwowar and Ms. Stein will fill seats held by Commissioners Troy Paredes and Elisse Walter, respectively. Mr. Paredes, whose term expires in June, has said that he plans to stay on the Commission until his successor takes office. Ms. Walter's term expired in June 2012, but she can remain in office through the end of the year unless replaced sooner.
SEC to consider money market fund proposal next week
The SEC announced it will hold an open meeting on 5 June 2013 to consider proposed amendments to certain rules under the Investment Company Act of 1940 that would affect the operation of money market funds. The SEC also will consider related amendments to Form PF under the Investment Advisers Act of 1940.
International Accounting Standards Board (IASB)
The May 2013 IFRIC Update summarizes the IFRS Interpretations Committee meeting held in London on 14 and 15 May 2013.
EFRAG status report
European Financial Reporting Advisory Group (EFRAG) has issued its endorsement advice letter on IFRIC Interpretation 21, Levies. As a result, EFRAG has updated its Endorsement Status Report.
Final Reminder - Register now for the webcast on FASB's leases proposal on 5 June 2013
There is still time to register for our webcast on the FASB's leases proposal, scheduled for 5 June 2013 from 1 p.m. to 2 p.m. Eastern time. In this webcast, we'll summarize the Board's lease accounting proposal, which could significantly affect financial statement users and preparers. Ernst & Young panelists and a public company preparer also will highlight some of the key ways in which the proposal differs from today's accounting guidance.
To register for this event, go to Leases exposure draft: understanding the proposal. Participants will be eligible to receive 1 hour of CPE credit.
Final Reminder: Register now for the Q2 2013 financial reporting update webcast
There is still time to register for the second financial reporting update webcast for 2013, scheduled for 6 June from 1 p.m. to 2:30 p.m. Eastern time. This 90-minute webcast will feature Ernst & Young panelists discussing current matters, recently issued exposure drafts and a Private Company Council update (including alternatives to US GAAP that the council has proposed). To register, go to Q2 2013 financial reporting update.
Over 50% of companies improved their brand reputation through sustainability reporting
While sustainability reporting was once practiced only by progressive or community-oriented companies, today it is a best practice employed by thousands of companies worldwide that fosters both employee loyalty and investor confidence. A recent study conducted by Ernst & Young and the Boston College Center for Corporate Citizenship in early 2013, Value of sustainability reporting, found that more than 50% of companies that responded reported that issuing a sustainability report helped improve their firm reputation, and more than 30% said it increased employee loyalty.
Our publication also covers such topics as:
- The Global Reporting Initiative (the leading global framework for sustainability reporting)
- The business benefits of sustainability reports and the future of sustainability reporting
- How sustainability reporting can serve as a differentiator
- How financial analysts view sustainability disclosures in assessing a company's management quality and efficiency
Upcoming Thought center webcasts and podcasts
Leases exposure draft: understanding the proposal
5 June 2013, 1:00 p.m. Eastern time
Hosted by Ernst & Young’s Global IFRS Services
6 June 2013, 9:00 a.m. Eastern time
The Ernst & Young Q2 2013 financial reporting update
Co-sponsored by Financial Executives International
6 June 2013, 1:00 p.m. Eastern time
CFO's reveal hidden trends from earnings season
A quarterly webcast series, "CFO: need to know"
12 June 2013, 12:00 p.m. Eastern time