Accounting


 


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ACCOUNTING

Following its July decision to ban the pooling-of-interests method of accounting, FASB issues Statement no. 141, Business Combinations, which requires that companies use only the purchase method to account for business combinations initiated after June 30 of this year. At the same time, the board issues Statement no. 142, Goodwill and Other Intangible Assets, which substitutes impairment testing for the amortization method of accounting for goodwill. The effective date for companies reporting on a calendar-year basis is January 1, 2002 ( www.fasb.org/news/nr070501.html ; www.fasb.org/news/nr072001.html ). (See also “Say Good-Bye to Pooling and Goodwill Amortization,” page 31, and Official Releases, page 115.)

An AcSEC exposure draft of a proposed statement of position, Accounting for Certain Costs and Activities Related to Property, Plant, and Equipment, addresses the variety of accounting methods applied to expenditures related to PP&E. A related FASB exposure draft of a proposed statement of financial accounting standards, Accounting in Interim and Annual Financial Statements for Certain Costs and Activities Related to Property, Plant and Equipment, discusses the same topic. Comments on both proposals are due by October 15 ( www.aicpa.org/members/div/acctstd/edo/index.htm ).

A FASB technical bulletin, Effective Date for Certain Financial Institutions of Certain Provisions of Statement 140 Related to the Isolation of Transferred Financial Assets, defers application of the isolation standards until 2002 ( www.fasb.org/news/nr072301.html ).

The SEC issues staff accounting bulletin no. 102, Loan Loss Allowance Methodology and Documentation Issues, which offers views on the development, documentation and application of a systematic loan-loss allowance methodology, but does not change existing rules on accounting for loan-loss provisions or allowances ( www.sec.gov/news/press/2001-67.txt ).

A new FASB standard, Statement no. 143, Accounting for Asset Retirement Obligations, requires entities to record the fair value of a liability for such an obligation in the period in which it is incurred. The statement is effective for fiscal years beginning after June 15, 2002 ( www.fasb.org/news/nr070501A.html ).

SPONSORED REPORT

How the election may affect taxation of business income

This report summarizes recent proposals to reform the U.S. business income tax system and considers the path to enactment of any such legislation.

VIDEO

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QUIZ

Did you follow 2016’s biggest accounting news?

CPAs will remember 2016 as a year of new standards and new faces. How well did you follow the biggest accounting events? The 7 questions in this quiz will help you find out