Highlights


  

 
 

The Consulting Services Executive Committee of the AICPA issued in June a new professional standard on valuation services, Statement on Standards for Valuation Services no. 1, Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset. The standard provides guidelines to CPAs for developing estimates of value and reporting on the results. It applies to AICPA members who perform an engagement that estimates the value of a business, business interest, security or intangible asset for numerous purposes, including sales transactions, financing, taxation, financial reporting, mergers and acquisitions, management and financial planning, and litigation. SSVS1 is effective for engagements accepted on or after Jan. 1, 2008. A copy of the standard is available at www.aicpa.org .

The SEC voted to propose a rule that would allow foreign companies that trade on U.S. exchanges to report financial results using International Financial Reporting Standards (IFRS) without reconciling to U.S. GAAP. Companies based outside the U.S. would have the choice of IFRS or GAAP. Those opting to use IFRS when filing with the SEC would have to prepare their financial statements in accordance with the English version of IFRS. The proposal will be available at www.sec.gov/rules/proposed.shtml . Comments are due 75 days after publication of the proposed rule change in the Federal Register.

The AICPA Board of Examiners is updating the Uniform CPA Examination. The 2008 Practice Analysis study is an essential process to maintaining the CPA Examination’s validity, legal defensibility and relevance to the profession. Changes since the exam was last updated in 2001 include the advent of SOX and the PCAOB.

Study data will help determine the exam content and skills to be measured and identify workplace responsibilities for entry-level CPAs as well as the knowledge and skills needed to protect the public interest. The final report is expected to be issued in December 2008.

The 2008 Practice Analysis study is being conducted by AICPA staff under the direction of the Practice Analysis Oversight Group. PAOG membership and other practice analysis information is available on the CPA Examination Web site at www.cpa-exam.org/cpa/practice_analysis.html .

Questions about the practice analysis may be directed to PracticeAnalysis@aicpa.org .

AICPA’s Accounting Standards Executive Committee issued Statement of Position 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies. The SOP includes, among other guidance, certain disclosure requirements for parent companies and equity method investors in investment companies and addresses whether the specialized industry accounting principles of the AICPA Audit and Accounting Guide, Investment Companies , should be retained by a parent company in consolidation or by an equity method investor. The SOP is effective for fiscal years beginning on or after Dec. 15, 2007, with early adoption encouraged. The document is available at www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/ .

The Federal Reserve, FDIC and Office of the Comptroller of the Currency released new host state loan-to-deposit ratios. The agencies will use the ratios, effective June 20, to assess compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994.

Section 109 prohibits a bank from establishing or acquiring a branch or branches outside of its home state for the primary purpose of deposit production. Likewise, it prohibits branches of banks controlled by out-of-state bank holding companies from operating primarily for the purpose of deposit production. The ratios measure compliance with these mandates. The updated ratios are available at www.fdic.gov/news/news/press/2007/pr07048a.html .

The SEC’s Office of Compliance Inspections and Examinations launched a newsletter to help chief compliance officers of SEC-registered firms learn more about common deficiencies and weaknesses that SEC examiners are finding during compliance examinations. The ComplianceAlert newsletter, which is written for registered investment advisers, investment companies, broker-dealers and transfer agents, is available at www.sec.gov/about/offices/ocie/complialert.htm .

FASAB’s Accounting and Auditing Policy Committee issued an exposure draft of a new Federal Financial Accounting Technical Release. Implementation Guide for Statement of Federal Financial Accounting Standards 29: Heritage Assets and Stewardship Land proposes guidance for federal entities on materiality, identification, categorization, quantification, assessing and reporting condition, and government-wide reporting. Comments on the ED, available at www.fasab.gov/pdffiles/slguide_tred061107.pdf , are due by Aug. 13.

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