Flashline - Week ending February 7, 2013 (No. 2013-06)

Flashline 02/07/2013 by Assurance services

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

  • In brief: FASB decides on new accounting model for certain guarantees
  • BoardroomDirect: January 2013
  • FASB issues two final Accounting Standards Updates
  • FAF to conduct post-implementation review of FAS 109 on income taxes
  • FASB meetings and project updates
  • IASB Update — January 2013
  • CAQ publishes highlights of November 2012 International Practices Task Force joint meeting with SEC staff
  • OMB proposes sweeping revisions to Circular A-133 and other grants management requirements

PwC

In brief: FASB decides on new accounting model for certain guarantees

The FASB decided at its February 6 meeting that certain guarantees issued by non-insurers, including certain financial guarantees issued by banks and other financial institutions, should be included in the scope of the proposed insurance contracts standard. The FASB’s tentative decision will be exposed for comment as part of its insurance contracts exposure draft. The exposure draft is expected by the end of the second quarter of 2013. This In brief article provides an overview of the FASB's tentative decision.

BoardroomDirect: January 2013

The January 2013 edition of BoardroomDirect includes articles highlighting (1) PwC’s annual publication: 2013 Key questions for board and audit committee members and (2) PwC's 16th Annual Global CEO Survey. Other topics include (1) directors’ involvement in IT and social governance, (2) the latest on the upcoming 2013 proxy season, and (3) a brief on Mary Jo White – the nominee for SEC chair.

Financial Accounting Standards Board (FASB)

FASB issues two final Accounting Standards Updates

The FASB issued the following final Accounting Standards Updates (ASU):

  • ASU No. 2013-02,Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income
    The ASU requires public and non-public companies to present information about reclassification adjustments from accumulated other comprehensive income in their annual financial statements in a single note or on the face of the financial statements. The new requirements will take effect for public companies in interim and annual reporting periods beginning after December 15, 2012 (the first quarter of 2013 for public, calendar-year companies).

See PwC’s In brief article for an overview of the ASU.

  • ASU No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities
    The ASU limits the scope of the new balance sheet offsetting disclosures in ASU 2011-11 to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. An entity is required to apply the ASU for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. This date coincides with the effective date of the disclosure requirements in ASU 2011-11.

See PwC’s In brief article for an overview of the scope clarification.

FAF to conduct post-implementation review of FAS 109 on income taxes

The Financial Accounting Foundation (FAF), the oversight body of the FASB, announced that FAS 109, Accounting for Income Taxes (codified in Accounting Standards Codification Topic 740, Income Taxes) will be the subject of its next post-implementation review (PIR). Issued in 1992, FAS 109 sets forth financial accounting and reporting standards for the effects of income taxes that result from an organization’s activities during the current and preceding years. The PIR process is designed to be an independent assessment to assist the FAF’s Board of Trustees with its ongoing efforts to evaluate the effectiveness of the FASB’s standard-setting process.

FASB meetings and project updates

Meeting summary: The FASB met on February 6 and discussed its project on insurance contracts. See the FASB’s website for a summary of decisions reached at the meeting. Also see PwC’s In brief article, FASB decides on new accounting model for certain guarantees.

Next open board meetings: The FASB has the following meetings scheduled for next week:

  • February 12: FASB meeting: The FASB will discuss its project on leases.
  • February 13: FASB meeting: The FASB will discuss its projects on (1) insurance contracts, (2) liquidation basis of accounting, and (3) disclosure framework.

See the FASB’s website for further information on the meetings.

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

International Accounting Standards Board (IASB)

IASB Update — January 2013

This issue of IASB Update, issued by the IASB staff, provides a summary of the IASB’s January 20-31 meetings. The FASB joined the IASB for some of the sessions. The IASB and FASB continued discussions on their projects on (1) revenue recognition, (2) leases, and (3) insurance contracts.

The topics discussed at the IASB-only sessions were (1) insurance contracts, (2) rate-regulated activities, (3) leases, (4) revenue recognition, (5) financial instruments: hedge accounting, (6) matters arising from the IFRS Interpretations Committee, (7) integrated reporting, (8) conceptual framework , and (9) post-implementation review of IFRS 8, Operating Segments.

American Institute of Certified Public Accountants (AICPA)

CAQ publishes highlights of November 2012 International Practices Task Force joint meeting with SEC staff

The AICPA Center for Audit Quality (CAQ) has published highlights of the November 20, 2012, International Practices Task Force (IPTF) joint meeting with the SEC staff. Topics discussed at the meeting include:

  • Re-application of IFRS 1, First-Time Adoption of International Financial Reporting Standards
  • Regulation S-X, Rule 3-05 - One year of significant acquiree financial statements with a basis of IFRS as issued by the IASB
  • Transition guidance for adoption of IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements, and IFRS 12, Disclosure of Interests in Other Entities
  • Monitoring inflation in certain countries, including the SEC staff’s expectations about countries that should be considered highly inflationary for US GAAP reporting
  • Satisfying the registration statement requirements for restated financial statements with IFRS-IASB financial information
  • Other SEC staff matters

U.S. Office of Management and Budget (OMB)

OMB proposes sweeping revisions to Circular A-133 and other grants management requirements

The U.S. Office of Management and Budget (OMB) issued for comment a proposal titled Proposed OMB Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards, which proposes  broad reforms to compliance audits performed under OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations (also referred to as single audits or Circular A-133 audits), as well as a number of other key grant reforms. The proposal was developed to combine multiple federal regulations for administering grants into a single, comprehensive, streamlined policy guide.

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.