Flashline - Week ending January 10, 2013 (No. 2013-02)

Flashline 01/10/2013 by Assurance services

PwC's weekly alert highlighting current financial reporting developments (including accounting, auditing and regulatory matters). This week's topics include:

  • Webcast: Year-end questions for audit committees – January 16
  • In brief: FASB further clarifies the scope of balance sheet offsetting disclosures
  • FASB requests comments on proposed clarification to fair value disclosure exemption for nonpublic entities
  • FASB meetings and project updates
  • ASB issues Omnibus Statement on Auditing Standards—2013
  • ASB issues updated guidance to help implement clarified auditing standards
  • GASB approves final standard on reporting for government combinations and disposals of government operations

PwC

Webcast: Year-end questions for audit committees – January 16

Hosted by PwC's Center for Board Governance, our Year-end questions for audit committees webcast is designed to help audit committee members prepare for the year-end close and for the upcoming year. The webcast will focus on the issues we expect audit committees to face as they prepare for their year-end oversight responsibilities as well as current activities in Washington, key financial reporting developments, IT oversight, and tax proposals.

Please join us on Wednesday, January 16 from 2:00 pm to 3:00 pm ET as we discuss issues and answer questions top of mind for audit committees. You can register for the webcast through the CFOdirect Network.

In brief: FASB further clarifies the scope of balance sheet offsetting disclosures

At its January 9 meeting, the FASB discussed feedback on its exposure draft that proposes clarifications to the scope of the new balance sheet offsetting disclosures required by Accounting Standards Update (ASU) 2011-11, Disclosures about Offsetting Assets and Liabilities. The exposure draft proposes that the offsetting disclosures only be applied to derivatives, repurchase agreements, and securities lending transactions to the extent that they are subject to a master netting arrangement or similar agreement. The FASB decided to clarify what would be considered a derivative for the purposes of the new offsetting disclosures and proceed with issuing the final scope clarification. This In brief article provides an overview of the board's decisions.

Financial Accounting Standards Board (FASB)

FASB requests comments on proposed clarification to fair value disclosure exemption for nonpublic entities

The FASB issued for public comment an exposure draft intended to clarify the scope and applicability of a fair value disclosure exemption that is specific to private companies and nonpublic not-for-profit organizations. The proposed amendment would clarify that the requirement to disclose “the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3)” does not apply to private companies and nonpublic not-for-profit organizations for items that are not measured at fair value in the statement of financial position, but for which fair value is disclosed

Comments on the exposure draft are due by January 22.

Note: PwC has also issued an In brief article that provides an overview of the proposal.

FASB meetings and project updates

Meeting summary: The FASB met on January 9 and discussed its projects on (1) accounting for financial instruments: classification and measurement and (2) balance sheet offsetting—scope clarification of Accounting Standards Update No. 2011-11 (Also see our In brief article above). See the FASB’s website for a summary of the decisions reached at the meeting.

Next open board meeting: No FASB meetings are scheduled for the week of January 14. The next board meeting is scheduled for January 23, and the topics to be discussed will be announced before the meeting.

EITF meeting: The FASB’s Emerging Issues Task Force (EITF) will meet on January 17. See the FASB’s website for the topics to be discussed and related meeting materials.

Project updates: The FASB has updated the following project summaries:

Auditing Standards Board (ASB)

ASB issues Omnibus Statement on Auditing Standards—2013

The ASB has published Statement on Auditing Standards (SAS) 127, Omnibus Statement on Auditing Standards – 2013. SAS 127 amends SAS 122, Statements on Auditing Standards: Clarification and Recodification, section 600, “Special Considerations — Audits of Group Financial Statements (Including the Work of Component Auditors),” and section 800, “Special Considerations — Audits of Financial Statements Prepared in Accordance With Special Purpose Frameworks.” The amendment to SAS 122 section 600 addresses circumstances in which the auditor of the group financial statements may make reference to the audit of a component auditor. The amendment to SAS 122 section 800 adds another basis of accounting as a special purpose framework.

ASB issues updated guidance to help implement clarified auditing standards

The AICPA has published an updated version of Clarified Auditing Standards — Learning and Implementation Plan. This document provides a roadmap that can be used to (1) understand the changes in the clarified SASs and their impact, (2) help train audit professionals on implementing the clarified SASs, and (3) communicate with audit clients about the changes they can expect.

Governmental Accounting Standards Board (GASB)

GASB approves final standard on reporting for government combinations and disposals of government operations

This week, the GASB approved a new standard (GASB 69) intended to improve accounting and financial reporting for U.S. state and local governments’ combinations and disposals of government operations. Specifically, GASB 69 provides guidance for:

  • Determining whether a specific government combination is a government merger, a government acquisition, or a transfer of operations
  • Using carrying values (generally, the amounts recognized in the pre-combination financial statements of the combining governments or operations) to measure the assets, deferred outflows of resources, liabilities, and deferred inflows of resources combined in a government merger or transfer of operations  
  • Measuring acquired assets, deferred outflows of resources, liabilities, and deferred inflows of resources based upon their acquisition values in a government acquisition
  • Reporting the disposal of government operations that have been transferred or sold

The requirements of GASB 69 will be effective for periods beginning after December 15, 2013, and should be applied on a prospective basis. Early application of the standard is encouraged. GASB 69 will be published and available on the GASB’s website in February 2013.

Edited by:

Brad Mescher
Director
Phone: 1-973-236-7261
Email: brad.mescher@us.pwc.com

Saira Gilani
Senior Manager
Phone: 1-973-236-5811
Email: saira.s.gilani@us.pwc.com

Flashline is a weekly alert highlighting current financial-reporting developments (including accounting, auditing and regulatory matters) and is produced by the National Professional Services Group of PwC. It is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. To access additional content on financial reporting issues, register for CFOdirect Network (www.cfodirect.pwc.com), PwC’s online resource for financial executives.