Download - MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework
![Page 1: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/1.jpg)
MHM Executive Education Series: What Private Companies Need to Know about the AICPA’s Proposed Framework
Presented by: Mike Loritz, Keith Peterka
April 18, 2013
![Page 2: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/2.jpg)
‹#›
To view this webinar in full screen mode, click on view options in the upper right hand corner.
Click the Support tab for technical assistance.
If you have a question during the presentation, please use the Q&A feature at the bottom of your screen.
#MHMWebinar
Before We Get Started…
![Page 3: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/3.jpg)
‹#›
This webinar is eligible for CPE credit. To receive credit, you will need to answer periodic polling questions throughout the webinar.
External participants will receive their CPE certificate via email immediately following the webinar.
#MHMWebinar
CPE Credit
![Page 4: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/4.jpg)
Mike Loritz, CPA Shareholder 913.234.1226 | [email protected] Mike has 17 years of experience in public accounting with diversified financial companies and other service based companies, including banking, broker/dealer, investment companies, and other diversified companies ranging from audits of public entities in the Fortune 100 to small private entities. He is a member of MHM's Professional Standards Group, providing accounting knowledge leadership in the areas of derivative financial instruments, investment securities, share-based compensation, fair value, revenue recognition and others.
‹#› #MHMWebinar
Today’s Presenters
Keith Peterka, CPA Shareholder 610.866.2274 | [email protected] With more than 18 years of experience in public accounting, Keith performs national firm responsibilities for IFRS, fair value accounting and auditing, revenue recognition and business combinations. He is a member of the MHM SEC taskforce in charge of updating the Firm’s SEC Audit Methodology. Additionally, he is a subject matter expert for IFRS, SEC reporting and fair value accounting in MHM’s Professional Standards Group. He also is a member on the IFRS Foundation's Small & Medium-sized Entities (SMEs) Implementation Group.
![Page 5: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/5.jpg)
‹#› #MHMWebinar
Today’s Agenda
1
2
3
4
Point/Counterpoint – What is the issue?
Private Company Financial Reporting – Background & Status
AICPA Financial Reporting Framework for SMEs – FRF for SMEs
Significant Concepts & Differences with GAAP
![Page 6: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/6.jpg)
WHAT IS THE ISSUE?
![Page 7: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/7.jpg)
The Standard-Setting Dilemma
15,000 issuers vs. 28.5 million private companies but GAAP driven by public company investor issues.
Small businesses employ more than half of all private sector workers.
Private companies and their financial statement users generally have information needs different from public companies.
![Page 8: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/8.jpg)
Not Just a US Problem
Canadian Accounting Standards Board decided one size does not fit all and published Accounting Standards for Private Enterprises in Dec. 2009.
UK Accounting Standards Board proposing three-tier system of financial reporting.
Germany has become the first major country to have two standard setters.
![Page 9: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/9.jpg)
Not Just a US Problem
Council on Accounting for Unlisted Companies formed in Japan to determine if changes should be made to standard-setting process for unlisted companies
IFRS for SMEs – being used in many areas of the world and being considered in some others
![Page 10: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/10.jpg)
What US Constituents Say about GAAP for Private Company Financial Reporting
Too many GAAP-specific requirements not useful or relevant for private companies’ financial statement users
Greater FASB emphasis on equity/public company investors
Most important problem: relevance
Increased complexity is burdensome, time-consuming
![Page 11: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/11.jpg)
Private companies incurring significant unnecessary cost for financial statement preparation and audit, review or compilation services.
Private companies are increasingly taking GAAP exceptions.
What This Means for GAAP in Practice Today
Current system is not attuned to the needs of private company financial statement preparers and users
![Page 12: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/12.jpg)
PRIVATE COMPANY FINANCIAL REPORTING – BACKGROUND & STATUS
![Page 13: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/13.jpg)
Key Events for Standard Setting for Private Companies
Private Company Financial Reporting Committee (PCFRC)
In 2006, the FASB created the PCFRC in an effort to further improve its ability to incorporate the views of private company constituents in its standard-setting process. The mission of the PCFRC was to provide recommendations to the FASB on issues related to standard setting for private companies and to focus on how standard setting affects day-to-day technical activities at private companies.
![Page 14: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/14.jpg)
Key Events For Standard-setting For Private Companies In 2009 the FAF Board of Trustees undertook a nationwide “listening tour.”
–Many constituents continued to be concerned about the cost and complexity of standards for private companies and not-for-profit organizations and were not satisfied with the results of the collaboration between the FASB and the PCFRC.
A major issue cited by constituents was that the FASB and the PCFRC did not develop and agree upon a framework for considering exceptions or modifications to U.S. GAAP for private companies.
Financial Accounting Foundation — Listening Tour
![Page 15: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/15.jpg)
Key Events for Standard-Setting for Private Companies
Blue -Ribbon Panel on Standard Setting for Private Companies
The FAF Trustees collaborated with the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) to create the Blue-Ribbon Panel on Standard Setting for Private Companies. The panel was charged with studying the needs of users of private company financial statements and making recommendations about how the standard setting process can best meet those needs.
![Page 16: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/16.jpg)
Private Company Council
The PCC has two principal responsibilities: 1. The PCC will determine whether exceptions or
modifications to existing non-governmental U.S. Generally Accepted Accounting Principles (U.S. GAAP) are required to address the needs of users of private company financial statements.
2. The PCC will serve as the primary advisory body to the Financial Accounting Standards Board (FASB) on the appropriate treatment for private companies for items under active consideration on the FASB’s technical agenda.
![Page 17: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/17.jpg)
The PCC will conduct a review of existing U.S. GAAP and identify standards that it will consider for possible exceptions or modifications. The PCC will develop, deliberate, and vote on proposed exceptions or modifications, which must be approved by a two-thirds vote of all PCC members (super majority).
PCC Agenda Setting and Due Process for Existing U.S. GAAP
Proposed modifications or exceptions to U.S. GAAP approved by the PCC will be provided to the FASB for a decision on endorsement. If endorsed by a simple majority of FASB members, the proposed modifications will be exposed for public comment.
![Page 18: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/18.jpg)
AICPA FINANCIAL REPORTING FRAMEWORK FOR SMES —
FRF FOR SMES
![Page 19: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/19.jpg)
AICPA Framework for SMEs
A less complicated and less costly system of accounting for SMEs that are not required to produce U.S. GAAP-based financial statements.
A cost-beneficial solution for owner-managers and others who need financial statements that are prepared in a consistent and reliable manner in accordance with a framework that has undergone public comment and professional scrutiny.
Principles based framework is intended to be responsive to the issues and concerns stakeholders currently encounter when preparing financial statements for SMEs.
![Page 20: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/20.jpg)
AICPA Framework for SMEs
The FRF for SMEs draws upon a blend of traditional methods of accounting with some accrual income tax methods.
The framework is being developed by a working group of CPA professionals and AICPA staff with experience serving smaller-to-medium-sized private entities.
Comments received during the open comment period were mixed while users expressed both support as well as certain concerns in the Framework Implementation concerns Auditibility concerns NASBA recommended that the AICPA drop the project
![Page 21: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/21.jpg)
Learning Center S lide No. 37
Who are FRF or SMEs for?
Small and medium-sized entities
Owner-managed/for-profit
Many industry groups
Incorporated and unincorporated
No entity precluded
![Page 22: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/22.jpg)
Learning Center S lide No. 38
Who are FRF or SMEs for?
Owners Owner-managers in need of reliable financial statements Confirm assessments of performance What they owe/own Understand cash flow
Users External financial statement users who have direct access to
management Non-Issuers No intent of going public Not intended for non-profits
![Page 23: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/23.jpg)
Not Authoritative
The FRF-SME will not be approved, disapproved or otherwise acted upon by any senior technical committee of the AICPA and will have no official or authoritative status.
![Page 24: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/24.jpg)
5 6
1
2 3
4
Features of FRF for SMEs
1) Traditional accounting methods with accrual income tax methods
2) Reduced adjustments from book to tax
3) Relevant
4) Simplified/straight-forward principles
5) Stable yet nimble
6) Reduced disclosures
![Page 25: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/25.jpg)
Approximately 250 pages Self-contained Excess narrative avoided Avoidance of bright lines Use of professional judgment
Principles-based, Standalone, Compact
Principles-based
Standalone
Compact
![Page 26: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/26.jpg)
AICPA Framework for SMEs
Developed for smaller- to medium-sized, owner-managed, for-profit entities where internal or external users have direct access to the owner-manager and GAAP financial statements are not required.
The AICPA has no authority to require the use of the FRF for SMEs for any entity. Therefore: The FRF for SMEs will have no effective date An owner-manager can decide to use the FRF for SMEs once it is
released. An owner-manager should make that decision in conjunction
with those who may use the entity’s financial statements.
![Page 27: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/27.jpg)
Concepts & Principles Transition Risks and Uncertainties Accounting Changes,
Estimates, Errors Measurement Uncertainty Current assets/liabilities Statement of Income Balance Sheet Statement of Cash Flows Business Combinations Subsidiaries
Consolidation and NCI Joint Ventures Push-Down Accounting FX Translation Nonmonetary Transactions Inventories Investments Property, Plant & Equipment Intangible Assets Leases Equity Subsequent Events
Comprehensive and Relevant Framework
![Page 28: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/28.jpg)
Commitments Contingencies Revenue Retirement and Other
Postemployment Benefits Income Taxes
Long-Lived Assets & Disc Ops
Related Party Financial Instruments and
Long Term Debt
Comprehensive and Relevant Framework (cont.)
![Page 29: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/29.jpg)
Does not include: Earnings per share guidance Segment reporting Other comprehensive income Interim reporting Stock compensation Many of the complex issues associated with debt/equity
Comprehensive and Relevant Framework
![Page 30: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/30.jpg)
SIGNIFICANT CONCEPTS & DIFFERENCES
![Page 31: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/31.jpg)
Chapter 1 introduces the financial statement concepts Similar to the FASB Concept Statements
Discusses concepts including the following: Benefit vs Cost Materiality Measurement Qualitative Characteristics
Understandability Relevance Reliability Comparability
Financial Statement Concepts
![Page 32: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/32.jpg)
Historical cost is the measurement basis primarily utilized
Departs from increased use of fair value for many instruments required by GAAP
Only equity securities held-for-sale measured at fair value
Reduction in Fair Value Measurements
![Page 33: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/33.jpg)
Inventories are measured at the lower of cost or market, with market defined as net realizable value. Market is defined differently than US GAAP
The cost of inventories should be assigned by using the first-in, first-out (FIFO), last-in, first-out (LIFO), or weighted average cost formula. No disclosure of the difference between FIFO and LIFO
pools or inventory basis differences for entities which utilize LIFO is required
Allows for previously recorded inventory impairment losses to be reversed
Inventories
![Page 34: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/34.jpg)
Less than 20% ownership Presumed investor does not have significant influence
Greater than 20% ownership Rebuttable presumption that significant influence exists
If significant influence exists = equity method Equity method accounting is similar to the existing
GAAP guidance However, allows the reversal of previously recognized
impairments
Equity Method Investments (Investments)
![Page 35: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/35.jpg)
No Concept of Variable Interest Entities (VIEs)
Consolidation is not appropriate when an entity has a limited right and ability to determine or influence the strategic policies of another entity but does not control it.
A holding of an interest in an entity that is not a subsidiary qualifies as an investment. Either equity method or cost basis
Subsidiaries & Consolidation
![Page 36: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/36.jpg)
Recognition and Presentation Does not require consolidation An entity should make an accounting policy choice to
either: a. Consolidate its subsidiaries or b. Account for its subsidiaries using the equity method
Parent-only (unconsolidated) financial statements are permitted.
Subsidiaries & Consolidation
![Page 37: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/37.jpg)
Depreciation should be recognized in a rational and systematic manner appropriate to the nature of the item with a limited life and its use by the entity. Depreciation recognized is the greater of: the cost, less salvage value over the life of the asset or the cost, less residual value over the useful life of the asset
Allows for the subsequent reversal of impairments Analysis is still performed using undiscounted cash flows Asset group concept is the same as GAAP
Allows capitalization of finance costs
Property, Plant & Equipment — Depreciation
![Page 38: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/38.jpg)
Straight-line method Constant charge as a function over time
Variable charge method An increasing charge method may be used when an entity
can obtain a constant rate of return on the investment in the asset.
A decreasing charge method may be appropriate when the operating efficiency of the asset declines over time.
PP&E – Different Depreciation Methods
![Page 39: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/39.jpg)
Goodwill is not tested for impairment. Goodwill should be amortized: the same period as that used for federal income tax
purposes or if not amortized for federal income tax purposes then a
period of 10 years.
Goodwill
![Page 40: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/40.jpg)
Closely aligned with requirements of U.S. Income Tax Code
Criteria for capitalizing a lease for tax purposes generally matches criteria in FRF for SMEs
Evaluation of capital vs. operating leases are the same as US GAAP Retains “rules” based approach
Lease Accounting
![Page 41: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/41.jpg)
Lease Accounting
22.09 A lease that transfers substantially all the benefits and risks of ownership related to the leased property from the lessor to the lessee should be accounted for as a capital lease by the lessee and as a sales-type of direct financing lease by the lessor
22.10 A lease in which the benefits and risks of ownership related to the leased property are substantially retained by the lessor should be accounted for as an operating lease by the lessee and lessor
![Page 42: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/42.jpg)
Revenue
27.04 Revenue from sales and service transaction s should be recognized when the requirements regarding performance…are satisfied, provided that at the time of performance, ultimate collection is reasonably assured.
Recognition
The seller of the goods has transferred to the buyer the significant risks and rewards of ownership… Reasonable assurance exists regarding the measurement of the consideration…
Performance
![Page 43: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/43.jpg)
In the case of rendering of services and long-term contracts and modifications to those contracts, performance should be determined using either the percentage of completion method or the completed contract method, whichever relates the revenue to the work accomplished.
Very limited discussion of multiple element deliverables
Limited, but similar, guidance on gross vs net reporting of revenues
Revenue
![Page 44: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/44.jpg)
Accounting Policy Election An entity should make a policy election to account for
defined benefit plans Current contribution payable method One of the accrued benefit obligation methods
Current Contribution Payable Method Only the contribution attributable to the current year is
expensed
Accrued Benefit Obligation Methods More to come
Defined Benefit Plans
![Page 45: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/45.jpg)
Accounting Policy Election An entity should make an accounting policy election to account
for income taxes using either the taxes payable method or the deferred income taxes method
Taxes Payable Method Under the taxes payable method, only current income tax assets
and liabilities are recognized Current income taxes, to the extent unpaid or refundable, should
be recognized as a liability or asset The liability for current income taxes included in the balance
sheet is the cost (benefit) or current income taxes for current and prior periods less amounts already paid in respect of these income taxes
Income Taxes
![Page 46: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/46.jpg)
Financial Instruments & L-T Debt
At each reporting date, an entity should measure: a. Investments in equity
instruments at cost, less any reduction for impairment,
b. All other financial assets at amortized cost; and
c. Financial liabilities at amortized cost
• An entity should measure investments in equity instruments held for sale at fair value.
• Changes in fair value should be recognized in net income in the period incurred.
• Impairments may be reversed.
![Page 47: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/47.jpg)
Derivatives Accounting is unclear – Cash basis? Much more broad definition Disclosures Face or contract amount (or notional principal amount if there is
no face or contract amount) The nature and terms — including a discussion of the credit and
market risk of those instruments The cash requirements of those instruments
In addition, an entity should provide a description of
the entity’s objectives for holding derivative financial instruments.
Financial Instruments
![Page 48: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/48.jpg)
When preparing financial statements, management should make an assessment of whether the going concern basis of accounting is appropriate. Management should take into account all known and
available information about the future, which is limited to twelve months from the balance sheet date.
If applicable, the entity should disclose those uncertainties along with its plans for dealing with the adverse effects of the conditions and events.
Going Concern Assessment
![Page 49: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/49.jpg)
Comment period ended January 30, 2013
2.Your text here
3.Your text here
Remaining Timetable
AICPA staff/task force address comments/input received
Final FRF for SMEs released first half of 2013
![Page 50: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/50.jpg)
‹#› #MHMWebinar
Questions?
![Page 51: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/51.jpg)
‹#›
Join us for these related EES courses: July 25: Is a Simpler Accounting Framework in the Future
for Private Companies August 22: Private Company Framework - Comparing
AICPA vs. IFRS Standards
Read these related MHM Messengers 6-13: AICPA's Special-Purpose Framework Proves
Controversial 5-13: Progress on Standard-Setting for Private Companies
#MHMWebinar
If You Enjoyed This Webinar…
![Page 52: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/52.jpg)
Mike Loritz, CPA Shareholder 913.234.1226 | [email protected] Mike has 17 years of experience in public accounting with diversified financial companies and other service based companies, including banking, broker/dealer, investment companies, and other diversified companies ranging from audits of public entities in the Fortune 100 to small private entities. He is a member of MHM's Professional Standards Group, providing accounting knowledge leadership in the areas of derivative financial instruments, investment securities, share-based compensation, fair value, revenue recognition and others.
‹#› #MHMWebinar
Today’s Presenters
Keith Peterka, CPA Shareholder 610.866.2274 | [email protected] With more than 18 years of experience in public accounting, Keith performs national firm responsibilities for IFRS, fair value accounting and auditing, revenue recognition and business combinations. He is a member of the MHM SEC taskforce in charge of updating the Firm’s SEC Audit Methodology. Additionally, he is a subject matter expert for IFRS, SEC reporting and fair value accounting in MHM’s Professional Standards Group. He also is a member on the IFRS Foundation's Small & Medium-sized Entities (SMEs) Implementation Group.
![Page 53: MHM Webinar Slides: What Private Companies Need to Know about the AICPA's Proposed Framework](https://reader034.vdocuments.net/reader034/viewer/2022051816/546cb26baf795976298b50d9/html5/thumbnails/53.jpg)
‹#› #MHMWebinar
Connect with Mayer Hoffman McCann
linkedin.com/company/ mayer-hoffman-mccann-p.c.
@mhm_pc
youtube.com/ mayerhoffmanmccann
gplus.to/mhmpc
blog.mhm-pc.com
slideshare.net/mhmpc
facebook.com/mhmpc