Pershing Yoakley & Associates, P.C. is pleased to present the December 2010 Audit & Accounting Update. This publication is designed to provide direct access to current audit and accounting information that is most relevant to you.
FASB Activities
Recently Completed Projects
The FASB released three Accounting Standards Updates (ASU’s) in the month of December 2010. To view any of the Accounting Standards Updates listed below, please click here.
ASU 2010-27 – Other Expenses (Topic 720): Fees Paid to the Federal Government by Pharmaceutical Manufacturers
This ASU specifies how pharmaceutical manufacturers should recognize and classify in their income statements fees mandated by the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act. The ASU is effective for calendar years beginning after December 31, 2010, when the fee initially becomes effective.
ASU 2010-28 – Intangibles – Goodwill and Other (Topic 350): When to Perform Step 2 of the of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts
This ASU specifies that when entities have reporting units with zero or negative carrying amounts they should still calculate the amount of an impairment if it has been determined that an impairment exists. The ASU is effective for public entities with fiscal years beginning after December 15, 2010. Early adoption is not permitted for public entities. For nonpublic entities, the ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Nonpublic companies may early adopt using the effective date for public entities.
ASU 2010-29 – Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations
This ASU specifies that in business combinations, a public entity presenting comparative financial statements,should disclose the revenue and earnings of the combined entity as though the combination occurring in the current year occurred as of the beginning of the comparable prior annual reporting period. The ASU is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.
Exposure Drafts in the News
The FASB released two Proposed Accounting Standards Updates (PASU) in the month of December 2010. To view the Proposed Accounting Standards Updates listed below, please click here.
PASU – Health Care Entities (Topic 954): Presentation and Disclosure of Net Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts
The amendments in this PASU would require health care entities to change the presentation of its statement of operations by reclassifying the provision for bad debts from an operating expense to a reduction from revenue (net of contractual allowances and discounts) and would mandate enhanced disclosure requirements relating to patient revenue and bad debts. This PASU would be applied retrospectively to all prior periods presented for classification of bad debt expense. The disclosures required by the amendments in the proposed update would be provided for the period of adoption and subsequent periods. The deadline for comment is February 15, 2011.
PASU – Other Expenses (Topic 720): Fees Paid to the Federal Government by Health Insurers
This PASU addresses questions on how health insurers should recognize and classify in their income statements fees mandated by the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act. This PASU would be effective for calendar years beginning after December 31, 2013, when the fee initially becomes effective. The deadline for comment is April 18, 2011.
FDIC Activities
On December 2, 2010 the Federal Deposit Insurance Corporation (FDIC) issued Interagency Appraisal and Evaluation Guidelines. The guidelines explain the federal financial regulatory agencies’ minimum regulatory standards for appraisals. The guidelines incorporate the agencies’ recent supervisory issuances on appraisal practices, address advancements in information technology used in collateral valuation practices, and clarify standards for the use of analytical methods.
Financial institutions should review their appraisal and evaluation program to ensure they are consistent with the new guidelines. To view the FDIC’s press release regarding this rule with a link to the guidelines, please click here.
GASB Activities
Recently Completed Projects
The GASB released one Statement in the month of December 2010. To view the Statement listed below, please click here.
GASB 62 – Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989, FASB and AICPA Pronouncements
This statement specifically identifies provisions in Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board Opinions, Accounting Research Bulletins of the AICPA Committee on Accounting Procedure and AICPA Accounting Interpretations, issued on or before November 30, 1989 that do not conflict with or contradict GASB pronouncements and incorporates those provisions into the GASB’s literature.
For more information, please contact the experts listed below at (800) 270-9629.
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