US Week in Review - Week ending 9 August 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
The FASB issued an Invitation to Comment on its staff's initial recommendations for a private company decision-making framework that would help the FASB and the new Private Company Council decide whether and when to change US GAAP financial reporting requirements for private companies. Our To the Point publication summarizes the approach described in the discussion paper.
The FASB tentatively decided not to develop entity-based accounting guidance for investment property entities (IPEs). The Board plans to consider the results of related standard-setting projects before deciding whether to pursue another approach, such as developing asset-based guidance for investment property, or to abandon the investment property project entirely. Our To the Point publication describes the Board's latest decisions.
Understanding the accounting topics that gave rise to restatements can help companies as they perform internal risk reassessments and evaluate their control environments. Our Technical Line publication provides recent restatement trends and analyzes the accounting topics that gave rise to restatements.
Standard Setter updates
Financial Accounting Standards Board (FASB)
8 August 2012 FASB meeting
The Board discussed the following projects:
- Investment property entities (see our To the Point publication above)
- Investment companies
9 August 2012 FASB meeting
The Board discussed the project on accounting for financial instruments: classification and measurement.
For additional details, see the FASB Action Alert.
Upcoming meetings and webcasts
There are no meetings scheduled for the week of 13 August 2012.
See the FASB calendar for upcoming education sessions. No decisions are made at these sessions.
Government Accounting Standards Board (GASB)
FAF report on the purposes of state and local government financial accounting and reporting
The Financial Accounting Foundation (FAF) has issued a study entitled Independent Academic Study of the Scope of the GASB: Accounting and Accountability - Topics and Processes. The FAF commissioned the study to provide insights on how the GASB can best serve stakeholders within the context of its mission. The study explores the purposes of financial accounting and reporting of state and local governments.
Principal observations and findings of the study include the following:
- The GASB is widely accepted as the appropriate organization to set financial accounting and reporting standards for state and local governments in the United States.
- The GASB's independence and the rigorous due process it follows in establishing financial accounting and reporting standards are highly valued and well respected.
- The lack of shared understanding about the meaning of accountability and which aspects of accountability are suited for assessment through financial reporting has led stakeholders to adopt differing views about the scope of GASB's activities and involvement in accountability reporting.
- Although some areas of governmental accountability may be beyond the scope of GASB's authority, there is no bright line demarcating the limits of GASB's scope of authority.
The study is available on the FAF website.
GASB pension standards now available
The Governmental Accounting Standards Board (GASB) published standards intended to improve the accounting and financial reporting of public employee pensions by state and local governments. The two pronouncements are available on the GASB website.
- Statement No. 67, Financial Reporting for Pension Plans, revises existing guidance for the financial reports of most pension plans.
- Statement No. 68, Accounting and Financial Reporting for Pensions, revises and establishes new financial reporting requirements for most governments that provide their employees with pension benefits.
Ernst & Young plans to issue interpretive guidance on these new rules shortly.
International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)
IAESB exposure drafts on International Education Standards
The International Accounting Education Standards Board (IAESB) has issued proposed revisions of IES 2, Initial Professional Development - Technical Competence and IES 3, Initial Professional Development - Professional Skills.
IES 2 was drafted in 2004 and prescribes the knowledge and the mix of professional skills aspiring professional accountants should acquire during initial career development. IES 3, also drafted in 2004, prescribes the knowledge and the mix of professional skills aspiring professional accountants should acquire during initial career development. Comments on both are due by 1 November 2012.
Upcoming Thought center webcasts and podcasts
The Ernst & Young Q3 2012 financial reporting update
Co-sponsored by Financial Executives International (FEI)
6 September 2012, 1:00 p.m. Eastern time
Evolving role of today's CFO
Featured in FEI's CFO Community of Interest
Hosted by Ernst & Young LLP
16 October 2012, 2:00 p.m. Eastern time