Small Business Accounting Update

• Chapter 1 - The U.S. GAAP Hierarchy and FASB Accounting Standards Codification™
  • Learning Objectives
  • Introduction
  • The Hierarchy of Generally Accepted Accounting Principles
    • Introduction
    • U.S. GAAP Hierarchy
    • Effective Date
    • Proposed Statement of Financial Accounting Standards, The Hierarchy of Generally Accepted Accounting Principles–a replacement of FASB Statement No. 162
  • The FASB Accounting Standards Codification™
    • Key Items Regarding the FASB ASC
    • Population of FASB ASC
    • Essential and Nonessential Content
    • Topical Structure
    • Referencing the FASB ASC
    • A Helpful Tool
  • Questions
• Chapter 2 - Compilation and Review Update
  • Learning Objectives
  • Introduction
  • Overview of New Statements on Standards for Accounting and Review Services
    • SSARS No. 15, Elimination of Certain References to Statements on Auditing Standards and Incorporation of Appropriate Guidance Into Statements on Standards for Accounting and Review Services
    • SSARS No. 16, Defining Professional Requirements in Statements on Standards for Accounting and Review Services
    • SSARS No. 17, Omnibus Statement on Standards for Accounting and Review Services – 2008
    • SSARS No. 18, Applicability of Statements on Standards for Accounting and Review Services
  • New SSARS Interpretation and Revised Appendices
    • Interpretation No. 24: “Reference to the Country of Origin in a Review or Compilation Report” (AR 9100)
    • Interpretation No. 30: “Considerations Related to Financial Statements Prepared in Accordance with International Financial Reporting Standards and Compilations and Reviews Performed in Accordance with International Standards” (AR 9100)
    • Interpretation No. 31: “Preparation of Financial Statements for Use by an Entity’s Auditors” (AR 9100)
  • Recently Issued Technical Practice Aid
    • TIS 9150.25 – Determining Whether Financial Statements Have Been Prepared by the Accountant (Issued December 2008)
  • On the ARSC Horizon
    • Reliability Project
  • Overview of Compilation and Review Alerts
    • Consideration of Fraud in Compilation and Review Engagements
    • Generating Monthly Financial Statements Efficiently
    • Online Accounting Services
    • Different Levels of Assurance on a Single Set of Financial Statements (Split-Level Reporting)
    • Applicability of the SSARSs to Financial Statements Included in Consulting Reports
    • Independence and Client Services
    • Distribution of Draft Financial Statements
    • Documentation
    • Management Representation Letters in Review Engagements
    • Representation Letters for the Compilation of Personal Financial Statements
    • Deciding When to Use OCBOA Financial Statements
  • Recurring Deficiencies Noted in Compilation and Review Engagements
  • Summary
  • Questions
• Chapter 3 - Recent FASB Pronouncements
  • Learning Objectives
  • Introduction
  • Business Combinations
    • Introduction
    • Scope
    • Key Terms
    • Identifying a Business Combination
    • The Acquisition Method
    • Disclosures
    • Effective Date and Transition
  • Noncontrolling Interests in Consolidated Financial Statements
    • Scope
    • FASB ASC 810, Consolidation (SFAS No. 160)
    • Noncontrolling Interest in a Subsidiary
    • Deconsolidation of a Subsidiary
    • Disclosures
    • Effective Date and Transition
  • Fair Value Measurements
    • Introduction
    • Scope
    • Measurement
    • Valuation Techniques
    • Fair Value Hierarchy
    • Disclosures
    • Effective Date and Transition
  • FASB Staff Positions Relating to Fair Value Measurements
    • FSP FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13
    • FSP FAS 157-2, Effective Date of FASB Statement No. 157
    • FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active
    • Proposed FSP No. FAS 157-e, Determining Whether a Market Is Not Active and a Transaction Is Not Distressed
    • Proposed FSP FAS 115-a, FAS 124-a, and EITF 99-20-b – Recognition and Presentation of Other-Than-Temporary Impairments
  • Accounting for Uncertainty in Income Taxes
    • Interpretation
    • Effective Date and Transition
  • FSPs Related to Accounting for Uncertainty in Income Taxes
    • FSP FIN 48-1, Definition of Settlement in FASB Interpretation No. 48
    • FSP FIN 48-3, Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises
    • Disclosures
    • Deferral of the Effective Date
  • Questions
• Chapter 4 - FASB Exposure Drafts and Projects
  • Learning Objectives
  • Introduction
  • Proposed SFAS – Going Concern
    • Summary
  • Proposed SFAS – Subsequent Events
    • Summary
  • Proposed FAS – Consolidated Financial Statements: Purpose and Policy
    • Introduction
    • Definition of Control
    • Implementation Guidance
    • Next Steps
  • Proposed FAS – Disclosure of Certain Loss Contingencies
    • Introduction
    • Required Disclosures
    • Tabular Reconciliation and Related Disclosures
    • Subsequent Events
    • Exemption from Disclosing Prejudicial Information
    • Effective Date
  • Proposed FAS – Amendments to FASB ASC 810, Consolidation [FIN No. 46(R)]
    • Reasons for Issuance
  • Major Project – Conceptual Framework
    • Introduction
    • Summary
  • Preliminary Views – Conceptual Framework for Financial Reporting: The Reporting Entity
    • Summary
  • Convergence Project – Financial Statement Presentation
    • Objective
    • Phase A
    • Phase B
    • Phase C
    • Immediate Plans
  • Discussion Paper – Preliminary Views on Revenue Recognition in Contracts with Customers (December 19, 2008)
    • Introduction
    • Scope
    • Recognition
    • Measurement
    • Potential Effects on Present Practice
    • Next Steps
  • Convergence Project – Accounting for Leases
    • Status
    • Summary of Decisions to Date
  • Invitation to Comment – Selected Issues Related to Assets and Liabilities with Uncertainties
    • Introduction
    • Probability and Contingencies
    • Contingent Assets
    • Contingent Liabilities
    • Probability Recognition Criterion
    • Measurement
  • FASB Project – FIN 48 Applicability to Private Entities
  • FASB Project – Technical Corrections to FASB Statements and Other U.S. GAAP Literature
  • FASB Project – Recoveries of Other-Than-Temporary Impairments (Reversals)
    • Summary
  • International Convergence Project – Earnings per Share
  • Income Tax Convergence Project
    • Objective
    • Topics Included
    • Next Steps
  • Valuation Resource Group
  • Questions
• Chapter 5 - U.S. GAAP and IFRS Convergence
  • Learning Objectives
  • Introduction
  • The International Accounting Standards
    • The Standards Advisory Council
    • International Accounting Standards Board
    • IASB Standards
    • International Financial Reporting Interpretations Committee
    • Memorandum of Understanding
    • IASB Work Plan – Projected Timetable as of January 2009
    • IASB Projects
  • SEC’s Major Convergence Related Activities
    • Acceptance of IFRS Financial Statements
    • FASB/FAF Response to the SEC’s Proposed Rule
    • SEC’s Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers
    • Recent Changes in the IASC Foundation and IASB to Enhance Public Accountability
    • New SEC Chairperson
  • Questions
• Chapter 6 - Latest Developments
• Value Aid AICPA’s Audit Risk Alert

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Chapter 0 - Overview

This course will provide you with an update of the following topics and issues

• Compilation and review engagements.
• New standards in accounting, compilation and review and other professional guidance that may affect small businesses and their accountants.
• Practical applications of recent standards.
• Insights on problems of financial statement fraud and professional ethics activities.

Contents
The course is divided into the following chapters and includes an appendix covering additional material that may not specifically be small-business related but is included for reference purposes. The course is not intended to include large public company SEC or PCAOB activities.

• Chapter 1 - Compilation and Review Update
• Chapter 2 - Business Combinations and Noncontrolling Interests
• Chapter 3 - Other Recent FASB Standards
• Chapter 4 - FASB Exposure Drafts and Projects Update
• Chapter 5 - U.S. GAAP and IFRS Convergence

Appendix
The course appendix includes the following material provided for supplemental purposes only and is not required reading for this course or earning the related CPE credits.

• Other Recent FASB Standards
  • SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities - an amendment of FAS 133 (issued March 2008)
  • SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities
  • SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)
• FASB FSPs, Derivative and EITF Issues
• FASB Exposure Drafts - Proposed SFAS, Not-for-Profit Organizations: Mergers and Acquisitions
  • Proposed SFAS, Not-for-Profit Organizations: Goodwill and Other Intangible Assets Acquired in a Merger or Acquisition - an amendment of SFAS No. 142
  • Proposed SFAS, Earnings per Share - an amendment of SFAS No. 128
  • Proposed SFAS, Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No. 60
  • Proposed SFAS, Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140
• FASB Projects - Preliminary Views, Financial Instruments with Characteristics of Equity
  • Research Projects
    • Financial Instruments
    • Accounting for Insurance Contracts
    • Consolidations: Policy and Procedures
  • Invitation to Comment, Selected Issues Related to Assets and Liabilities with Uncertainties

Chapter 1 - Compilation and Review Update

Learning Objectives
Upon completing this chapter, you should be able to

• Describe the changes resulting from the issuance of SSARS No. 15 through SSARS No. 17, and two SSARS Interpretations.
• Outline implications related to the Sarbanes-Oxley Act of 2002 for compilations and review services engagements.
• Identify responsibilities for considering fraud in compilation and review engagements.
• Define "submission" of financial statements and describe management-use-only financial statements.
• Address common practice questions related to the performance of compilation and review services.
• Recognize issues of concern noted in recent peer reviews of compilation and review engagements.

Introduction
This chapter highlights recently issued changes to the Statement on Standards for Accounting and Review Services (SSARS) issued by the Accounting and Review Services Committee (ARSC). ARSC recently issued three new SSARS and two SSARS interpretations. This chapter overviews the key provisions contained in those new standards.

This chapter also provides discussion of critical issues affecting the applicability of SSARS standards to client engagements. First, this chapter discusses the impact of the Sarbanes-Oxley Act on compilation and review engagements. Second, it describes the consideration of fraud in SSARS-related engagements. Third, this chapter reminds participants about the SSARS definition of the term "submission" as it relates to submitting financial statements to the client. It also highlights the "management-use-only financial statements."

In a continuing effort to help CPAs stay abreast of factors that may affect risks that exist when professional services are rendered, the AICPA annually issues "risk alerts." These alerts provide a list of many factors that should be considered in professional service engagements. The AICPA's Compilation and Review Alerts clarify existing professional standards for compilation and review services and discuss practice problems commonly noted. This chapter contains an overview of matters discussed in recent Compilation and Review Alerts.

Overview of New Statements on Standards for Accounting and Review Services

ARSC recently issued three new Statements on Standards for Accounting and Review Services (SSARS). This next section provides an overview of the key components of these new standards.

SSARS No. 15, Elimination of Certain References to Statements on Auditing Standards and Incorporation of Appropriate Guidance Into Statements on Standards for Accounting and Review Services

How it Effects Existing Standards

SSARS No. 15 amends existing SSARS to eliminate references to Statements on Auditing Standards (SASs) in SSARS.

Key Components of the New Standard

In many instances, the SSARS included references to SASs for practitioners who perform compilation and review services to consider. For many of those practitioners, the highest level service they perform for clients is compilation and review services. As a result, many of those practitioners might be less familiar with specific auditing standards. ARSC decided that it would be in the best interest of practitioners who perform compilation and review services if certain references to the auditing standards were eliminated from SSARS. Thus, SSARS No. 15 was issued to accomplish that objective. SSARS No. 15 eliminates the references to the auditing literature, but replaces those references with guidance similar to that originally referenced.

SSARS No. 15 provides new or enhanced guidance by

• Providing a definition of other comprehensive basis of accounting (OCBOA);
• Providing examples of appropriate OCBOA financial statement titles;
• Providing reporting examples for compilations and reviews of OCBOA financial statements;
• Providing guidance on emphasizing a matter when reporting on compiled or reviewed financial statements;
• Clarifying the accountant's responsibility with respect to facts discovered subsequent to the date of the accountant's compilation or review report;

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