Flashline - Week ending March 7, 2013 (No. 2013-10)

Flashline 03/07/2013 by Assurance services

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

This week's topics include:

  • Webcast: FASB’s proposal for classification and measurement of financial instruments – March 12
  • In brief: IASB issues exposure draft on novation of derivatives
  • BoardroomDirect: February 2013
  • IFRS news — March 2013
  • FASB issues two final ASUs containing consensuses reached at the January 2013 EITF meeting
  • FASB responds to FAF’s review report on segment reporting
  • FASB meetings and project updates
  • GAO highlights challenges faced by multiemployer pension plans and PBGC
  • IFAC publishes results of global survey of the accounting professional

 

PwC

Webcast: FASB’s proposal for classification and measurement of financial instruments – March 12

The FASB recently issued its revised proposal on financial instruments classification and measurement for public comment by May 15, 2013. While certain financial institutions such as retail and commercial banks and insurance companies are likely to be most affected by this proposal, other companies with large investment portfolios that are not currently measured at fair value through net income may also be significantly impacted.

We invite you to join us on Tuesday, March 12, from 1:00 pm to 2:00 pm ET for a webcast when we will discuss key elements of the proposal and their potential implications, as well as share specific issues we have heard from constituents. You can register for the webcast through the CFOdirect Network.

In brief: IASB issues exposure draft on novation of derivatives

The IASB has issued an exposure draft proposing a limited scope amendment to IAS 39, Financial instruments: Recognition and measurement, and to the forthcoming chapter on hedge accounting in IFRS 9, Financial instruments. The exposure draft proposes some relief from the hedge accounting requirements when a derivative is novated to a central counterparty (CCP), such as a central clearing organization, under certain circumstances. This In brief article provides an overview the IASB's proposal, which has a comment deadline of April 2.

BoardroomDirect: February 2013

The February 2013 edition of Boardroom Direct includes articles highlighting (1) the risks boards face when their company is contemplating a merger or acquisition, (2) the trend of proxy vote injunction lawsuits, (3) the third generation of governance ratings at a major proxy advisor, (4) PwC’s new Investor Resource Institute, (5) an update on a recent FASB standard change for balance sheet offsetting, and (6) amendments made to the FASB’s proposed private company decision-making framework.

IFRS news — March 2013

This issue of IFRS news looks at (1) the financial statement disclosure problem and how the IASB has taken on the challenge, (2) ten concrete measures for improving IFRS, (3) Mary Tokar – new IASB board member, (4) key issues to consider on transition to IAS 10 and 11, (5) recent activity at the IASB, including the revenue recognition project and the exposure draft on novation of derivatives, and (6) disclosures of interests in other entities.

Financial Accounting Standards Board (FASB)

FASB issues two final ASUs containing consensuses reached at the January 2013 EITF meeting

The FASB has published the following final Accounting Standards Updates (ASU) to codify consensuses reached by the FASB’s Emerging Issues Task Force (EITF) at its January 2013 meeting:

  • ASU 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date
  • ASU 2013-05, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity

See the FASB’s website to obtain copies of each ASU. Also, see the January 2013 edition of PwC’s EITF observer for an overview of each consensus.

FASB responds to FAF’s review report on segment reporting

The FASB announced that will review the issues raised by the Financial Accounting Foundation’s (FAF)1 post-implementation review of the FASB’s business segment reporting standard with its stakeholders and the staff of the U.S. Securities and Exchange Commission to determine whether further review of the standard is warranted.

The announcement came in the FASB’s response to the FAF Post-Implementation Review (PIR) report on FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (codified in Accounting Standards Codification Topic 280, Segment Reporting), which addresses the way public companies report financial information about their business segments.

The main issues that will be considered are (1) determining operating segments, (2) aggregating operating segments, (3) the usefulness of certain disclosures, and (4) the comparability of segment information. The FASB will consult with stakeholders to understand the significance of the issues raised and their priority in relation to other potential agenda items.

FASB meetings and project updates

Meeting summary: The FASB met on March 6 and discussed its project on insurance contracts. See the FASB’s website for a summary of decisions reached at the meeting.

Next open board meeting: The next scheduled FASB meeting is on March 13. The FASB will discuss its projects on (1) investment companies and (2) reporting discontinued operations. See the FASB’s website for further information on the meeting.

EITF meeting: The FASB’s Emerging Issues Task Force (EITF) will meet on March 14. 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:

Government Accountability Office (GAO)

GAO highlights challenges faced by multiemployer pension plans and PBGC

The GAO has published the written testimony of Charles Jeszeck, Director of Education, Workforce, and Income Security Issues, at a Congressional subcommittee hearing held on March 5. The testimony to the Congressional Subcommittee on Health, Employment, Labor and Pensions focused on (1) recent actions that multiemployer plans in the worst financial condition have taken to improve their funding levels and (2) the extent to which plans have relied on PBGC assistance since 2009, and the financial condition of PBGC's multiemployer plan insurance program.

Multiemployer pension plans cover more than 10 million workers and retirees in the US, and are insured by the Pension Benefit Guaranty Corporation (PBGC). Both PBGC's single-employer and multiemployer insurance programs have been on GAO's list of high-risk federal programs for a number of years.

International Federation of Accountants (IFAC)

IFAC publishes results of global survey of the accounting professional

IFAC has released the results of its 2012 IFAC Global Leadership Survey of the Accounting Profession, which includes input from IFAC member bodies around the world. The survey elicited respondents’ opinions regarding perceptions of the accountancy profession and the most significant issues facing global accountancy in 2013. The following were identified as the top concerns by respondents:

  • The needs of small- and medium-sized practices and small- and medium-sized entities
  • The reputation and credibility of the profession
  • Issues related to the European Union (EU) draft legislation
  • Public sector financial management and sovereign debt issues
  • The difficult global financial climate

1The FAF is the oversight body of the FASB.

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.