FASB News
Alignment Sought for Asset Acquisition, Business Combinations Guidance
FASB is considering beginning a project to reduce the differences between business combinations and acquisition accounting. The board wants to focus on three areas in the asset acquisition guidance that differ significantly from business combinations accounting—transaction costs, in process research and development (IPR&D), and contingent consideration. “I do think those are the three biggest areas that create the most significant differences and the most material differences,” FASB member Marc Siegel said. Siegel cautioned, however, that delving into accounting for transaction costs may be a large undertaking. In addition, any changes to the business combinations guidance in U.S. GAAP could depart from the IASB’s IFRS 3, Business Combinations. “There might be more practical answers that could lead to divergence with IFRS 3, which we worked hard to get to a mostly converged answer on,” Siegel said. “Those are the kind of things that are going to be in my head.”
AICPA News
Comment Deadlines Approaching for Audit, Ethics Guidance
Some AICPA proposals have comment deadlines coming up in the next few months, one of which addresses the auditor’s responsibility for issuing a report for a benefit plan’s financial statements. According to the proposed guidance, the report should discuss the limits a plan’s executives or administrator may have imposed on the auditor. Section 103(a)(3)(C) of the Employee Retirement Income Security Act of 1974 (ERISA) lets management or an administrator exclude assets held by a bank, trust company, or insurer from the audit; the Department of Labor found that many plan beneficiaries do not understand the financial statements or the limits imposed on examinations by external auditors. The proposal was released in April with an August 21 comment deadline.
IFAC News
Reference for Accounting Regulation Released
On August 7, the International Federation of Accountants (IFAC) released a reference guide for accounting organizations that are developing or reforming their regulations. The guide is based on the overall set of principles the IFAC developed in 2011 and explains the various regulatory approaches countries use. “The sustainability of the accountancy profession depends on the quality of the services its members provide and on the profession’s capacity to respond effectively and efficiently to the demands of a jurisdiction’s economy and society,” the guide says. “Regulation seeks to ensure high quality and, where appropriate, consistency in the quality of accountancy services.” The guide also says that regulation is often used to ensure compliance with a minimum degree of professional, technical, and ethical standards; to address what it calls “knowledge imbalances” between accountants and
