Accounting and Audit Updates

2008

SFAS 157 – Fair Value Measurements (as amended)

The purpose of SFAS 157 is to provide a revised definition of fair value and to incorporate this new definition into all GAAP where fair values are required in order to improve consistency and comparability. It does not apply to fair value under SFAS 123[R], the practicability exceptions to fair value measurements in existing standards and statements that involve values that are similar to fair value, but not actual fair value, such as with valuing inventories. Read the full article for more information.

SFAS 158 – Employers’ Accounting for Defined Benefit Pension and Other Post-Retirement Plans

There are two primary changes in financial reporting as a result of FAS 158 that will affect clients:

1. The over funded / under funded status of a Defined Benefit plan must be recorded as an asset / liability on the company’s balance sheet

2. The funded status of a plan must be measured as of a company’s reporting date

Read the full article for a summary of the FAS 158 impact on financial statements.

SFAS 159 – The Fair Value Option for Financial Assets and Financial Liabilities (as amended)

The purpose of SFAS 159 is to expand the use of fair value measurements for financial instruments that are not otherwise required to be stated at fair value. The use of fair value is optional and applies to non-for-profits as well as for-profit entities. An entity’s decision to apply fair value under this statement is made at certain defined election dates on an item-by-item basis. However, once the choice is made to apply fair value under this statement, it is irrevocable – read the full article for details.

The New Risk Assessment Standards

The Auditing Standards Board the AICPA recently issued eight Statements on Auditing Standards on risk assessment in a financial statement audit. For details, read the full article to find out what effect the Risk Assessment Standards have on your audit and what your organization can do to accommodate the changes...

FIN 48  – Summary

FAS elected to delay the effective date of FIN 48 for nonpublic entities to fiscal years beginning after December 15, 2007. FIN 48 requires Companies to analyze the technical merits of their tax positions and determine the likelihood that these positions will be sustained if they were ever examined by the taxing authorities. If Companies determine that it is unlikely that their tax positions will be sustained, a corresponding liability is created and the tax benefit of such position is reduced for financial reporting purposes. Read the full article for details on tax positions you should consider including.

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