MBA ZoNe - MBA BulletPoint

Interpreting IFRS @AICPA_JofA

"With the increasing acceptance of IFRS in the global economy and its possible adoption in the U.S., CPAs are keenly interested in developing a broader understanding of international standards. A major goal of both the International Accounting Standards Board (IASB) and the SEC is for IFRS to be consistently and appropriately interpreted and applied. However, for many in the U.S. it is unclear how consistent interpretation and application can be achieved in the principles-based environment of IFRS. The reality is that the IASB has a well-established process for developing official interpretations of IFRS. This article introduces the International Financial Reporting Interpretations Committee (IFRIC) and discusses its organization, process and role in the authoritative interpretation of IFRS. The article also explains how IFRIC differs from FASB’s Emerging Issues Task Force (EITF)..."
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Source: AICPA Journal of Accountancy

AICPA Video on GAAP Codification

"On July 1, 2009, FASB’s Accounting Standards Codification (ASC) is expected to be authoritative..."
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Reader Poll: Reader Survey: Are you aware of the FASB Accounting Standards Codification (which changes the presentation of GAAP) that is slated to become authoritative on July 1, 2009?
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Source: AICPA

U.S. "Will Be The Outlier" Without IFRS

"IASB member John Smith tells a European audience that "it is in the interest of the United States to adopt IFRSs in the next five years...

The United States will pay a high price for failing to adopt International Financial Reporting Standards within the next five years, an international accounting rulemaker told a European Commission conference audience last Thursday. "I believe it is in the interest of the United States to adopt IFRSs in the next five years," International Accounting Standards Board member John Smith told attendees at a conference in Brussels last week organized by the European Commission. Noting that Brazil, Canada, China, India, Japan and Korea are committed to adopting IFRS, and the European Union already using IFRS, Smith said "the cost to the United States of failing to adopt IFRSs will be high"..."
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Source: CFO

Using Operating Cash Flow to Detect Earnings Problems

"The relationship between earnings growth, more specifically,growth in income from continuing operations, and increases in operating cash flow is important and can provide meaningful insight into a company’s financial health. Over extended periods, the rate of growth in earnings should be commensurate with the rate of growth in operating cash flow.A lasting discrepancy in their rates of growth should be investigated in order to gain an understanding of its causes and implications..."
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Source: Accounting, Financial & Taxation Blog

Regulators Eye "Going Concern" Concerns

"With the economic crisis deepening, auditors and their clients get testy with each other about companies’ ability to survive.

In the midst of an increase in the number of going-concern qualms stamped on company financials, standard-setters are working on changing how managers and auditors determine whether a business will stay viable in the foreseeable future.
It’s the one area of financial reporting where auditors are required to play forecaster. Here, they must go beyond their more comfortable role of reviewer and retrospectively of past financial performance..."
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Source: CFO

Guessing the Costs of IFRS Conversion

"U.S. companies believe they will spend more than European ones did to adopt the global rules, according to an Accenture survey...

U.S. executives expect to pay more than their European counterparts did to convert to International Financial Reporting Standards. Depending on company size, they estimate they’ll spend between 0.1% and 0.7% of annual revenue to move from U.S. GAAP to the global rules, an endeavor publicly traded companies in Europe undertook four years ago at an average cost of 0.05% of revenue..."
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Source: CFO

Oust the SEC as Sole Accounting Watchdog?

"Are you ready for the FAOB? New House bill would install instead a five-member oversight board made up of heads of Treasury, the Fed, FDIC, and PCAOB, along with the SEC chair...

Politics are creeping into accounting once again. This time it’s through a proposed law that would replace the Securites and Exchange Commission as the sole overseer of accounting standards, and turn that role over to a high-level group that would let bank regulators have a say in approving accounting rules..."
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Source: CFO.com

Former SEC Chief Accountant Blames FASB for Meltdown

"He credits auditors and financial statement preparers for successfully fighting fraud...

Former Securities and Exchange Commission chief accountant Lynn Turner says accounting standards-setters "deserve an F" for allowing companies to incorrectly move assets off their balance sheets and for caving into political pressure to alter rules..."
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Source: CFO.com

AICPA Launches Economic Crisis Resource Center

"In this time of global economic turmoil, individuals and businesses alike are in desperate need of guidance and reliable information.  CPAs are increasingly being called upon by employers and clients - as well as family and friends - for help in navigating current and future financial challenges.

To ensure CPAs have the essential information needed to serve as leaders at work, at home and in their communities, we have created the Economic Crisis Resource Center at www.aicpa.org/economy, the premiere online resource for the profession during these challenging times. This site was developed by the AICPA, in partnership with CPA2Biz, its marketing and technology subsidiary. With more than 200 items, the breadth and depth of content addresses the concerns of every member segment and includes:

- Tools for minimizing the effects of a recession on your firm or company
- Webcasts on credit and financing impacts
- Articles on strategic planning, budgeting and forecasting
- CPE courses on fraud detection and maintaining the public trust
- Professional development resources, including job postings

We will continue to develop and add new resources to this centralized hub in order to help you, your employers, clients and family get on sounder fiscal footing.

The AICPA, with approximately 350,000 members, is the national professional organization for certified public accountants in the United States. Its mission is to provide members with the resources, information, and leadership that enable them to provide valuable services in the highest professional manner to benefit the public as well as employers and clients.

To learn more about the AICPA, see www.aicpa.org. To learn more about the AICPA’s marketing and technology subsidiary, CPA2Biz, see www.cpa2biz.com..."

Source: About Us: AICPA Economic Crisis Resource Center

Huge Changes in Store for Financial Statements

"A balance sheet that doesn’t balance?  Financing and operating classifications that depend on your company type?  A (gulp) cash-basis income statement?  Well, not quite. But accounting standards-setters are online and on the road urging investors and companies to weigh in now on a proposal to radically alter financial statements. And while accrual accounting isn’t going away, preparers of financial statements might be surprised to find that the above descriptions do accurately describe the look and feel that financial statements might have just two years from now..."
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Source: CFO