Archive for the ‘GAAP’ Category

Build-to-Suit Construction Adds Complexity to Lease Accounting

June 4, 2012

Companies that undertake construction projects in conjunction with leases should be careful of the accounting effects, PricewaterhouseCoopers’ Chad Soares says. Certain projects must be included as an asset on a lease-holder’s balance sheet, depending on how involved it is with the project. "If a lease involves an asset that will be constructed, special rules exist," Soares says.

During a recent webcast covering a variety of accounting issues, PwC Partner Chad Soares reminded companies that there are unpleasant balance sheet implications to beware when entering into build-to-suit lease agreements.

Further details are available on this article posted on Compliance Week.

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Changes Proposed for Financial Reporting for Consolidations

November 7, 2011

orgchartIn a proposed Accounting Standards Update released Friday, the Financial Accounting Standards Board outlined changes it says would increase transparency and consistency of financial reporting about consolidations. The proposed amendments would affect any company required to evaluate whether it should consolidate another entity.

The Journal of Accountancy has prepared an article here providing further information.

FASB Proposes Measuring Investment Properties at Fair Value

October 24, 2011

The Financial Accounting Standards Board on Friday proposed amendments to guidance in Topic 946 for determining whether an entity is an investment company and, in a separate exposure draft, proposed that entities that meet certain criteria be required to measure their investment properties at fair value.

The Journal of Accountancy article here provides more detail.

Is Orange County Headed for Bankruptcy Again? And Why is this an Accounting Story?

August 31, 2011

CPA John Moorlach, the whistle blower of the original OC bankruptcy back in 1994, has written an article for the Orange County Register in which he explains that Orange County could face another bankruptcy because of how the Governmental Accounting Standards Board (GASB) is changing how municipalities report pension debt and liabilities.  Under the new system, the county is $3.8 billion in the red.

"Had municipalities been required to report benefit increases that immediately generated unfunded liabilities, it’s highly unlikely that elected officials would have approved them," he writes.

He goes on further to explain some of the intricacies of the accounting standards as follows:

“The accounting profession has two rule-making bodies that provide generally accepted accounting principles and auditing standards for reporting financial statements. The Financial Accounting Standards Board (FASB) provides rules and promulgations for the private sector. Municipalities follow the rules established by the Government Accounting Standards Board (GASB).

FASB has required companies for 25 years to report unfunded liabilities for defined-benefit pension plans on balance sheets. GASB has not. However, GASB is finally addressing this oversight. Regrettably, it’s too late. The abuse of public employee defined-benefit plans has already been done, and the damage may be irreparable.”

ASB Issues Interpretation to SAS 119

August 8, 2011

The Auditing Standards Board has issued Interpretation No. 1, “Dating the Auditor’s Report on Supplementary Information,” to SAS No. 119, Supplementary Information in Relation to the Financial Statements as a Whole. The interpretation addresses how an auditor makes clear that no additional procedures were performed on the audited financial statements subsequent to the date of the auditor’s report on those financial statements when reporting on the supplementary information (either in a separate report or in an explanatory paragraph within the auditor’s report on the financial statements) after the date of the auditor’s report on the financial statements.

Revised Lease Accounting Proposals to be Announced

July 22, 2011

Via the Journal of Accountancy

The Financial Accounting Standards Board and the International Accounting Standards Board said Thursday they will release details soon of their revised lease accounting proposals and invite comments.

The boards have reaffirmed the major changes to lease accounting, which will require lease obligations and the related right-to-use on the balance sheet of financial statements.

The AICPA has established a page where you can learn more about the FASB-IASB Convergence Project at the Financial Reporting Center on AICPA.org.

Accounting and Review Services Committee Revises Interpretation 30 to SSARS No. 1

December 6, 2010

The Accounting and Review Services Committee has revised Interpretation No. 30 to Statements on Standards for Accounting and Review Services No. 1, in order to provide guidance when the accountant reports on compiled or reviewed financial statements prepared in accordance with International Financial Reporting Standards and the required comparative financial information is not provided.

G-20 Directs Accounting Standards Boards to Converge Rules

November 17, 2010

Via Reuters

In their recent meeting, the Group of 20 top economies last week agreed that the International Accounting Standards Board and the US Financial Accounting Standards Board should converge their accounting rules by the end of 2011.

AICPA Panel Explains Private Company Financial Reporting Recommendations

October 25, 2010

At the AICPA’s Fall Meeting of Council, members of the Blue Ribbon Panel on Private Company Financial Reporting, discussed the recommendations of the panel’s members who supported a financial-reporting model of U.S. GAAP with modifications for private companies and a separate standards board.

You can read further detail about the explanations can be found on the Journal of Accountancy here.

AICPA Private Companies Practice Section has Issued Video to Support Implementation of Newly Issued SSARS No. 19

September 20, 2010

http://link.brightcove.com/services/player/bcpid586641293001?bclid=587238645001&bctid=590073128001