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The AICPA accounting standards executive committee (AcSEC) issues Statement of Position (SOP) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer (www.aicpa.org). It addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investment in loans or debt securities acquired in a transfer. The SOP applies to deteriorated loans acquired in transfers, including business combinations, and to all nongovernmental entities, including not-for-profit organizations, but not to loans the entity itself originates or to higher quality purchased loans. The statement contains a transition provision that applies to certain aspects of loans currently within the scope of Practice Bulletin no. 6, Amortization of Discounts on Certain Acquired Loans. The SOP is effective for loans acquired in fiscal years beginning after December 15, 2004, with early adoption encouraged. Copies of the statement (product no. 014938JA) are available in the accounting and auditing literature section of www.cpa2biz.com/store or by phone at 888-777-7077.

The Securities and Exchange Commission releases Staff Accounting Bulletin (SAB) no. 104, Revenue Recognition (www.sec.gov/interps/account/sab104.pdf), which updates portions of the interpretative guidance included in topic 13 of the SEC’s codification of staff accounting bulletins (www.sec.gov/interps/account/sab103.htm) to make it consistent with current authoritative accounting guidance. The SAB’s principal revisions relate to the rescission of material no longer necessary because of private-sector developments in U.S. GAAP.

The AICPA’s accounting and review services committee has issued two exposure drafts (ED) for comment. One, Performance of Review Engagements, would revise various provisions in Statement on Standards for Accounting and Review Services (SSARS) no. 1, Compilation and Review of Financial Statements. The proposed statement would be effective for reviews of financial statements for periods ending on or after December 15, 2004. The other ED, Standards for Accounting and Review Services, establishes a SSARS hierarchy and revises guidance in several earlier statements. It would take effect upon issuance as final. The EDs are available online at www.aicpa.org/members/div/auditstd eds.asp. Comments are due April 11.

The Department of Labor’s Employee Benefits Security Administration (EBSA) released a series of questions and answers about audit waiver requirements under its October 2000 Small Pension Plan Security Amendments. The publication (www.dol.gov/ebsa/faqs/faq_auditwaiver.html) explains how small pension plans can determine whether they qualify for an audit waiver under the amended regulations. Additional information is available by phone at 866-463-3278.

The Institute publishes the AICPA Audit Committee Toolkit to help audit committees recognize and satisfy their oversight responsibilities under the Sarbanes-Oxley Act of 2002 (www.aicpa.org/audcommctr/). This guide provides advice on meeting duties such as agenda setting, conducting executive sessions and evaluating the effectiveness of auditors and of the audit committee itself. Other topics covered include basic information on internal controls, antifraud accountability and off-balance-sheet transactions. The toolkit is one of several resources available at the AICPA’s Audit Committee Effectiveness Center (www.aicpa.org/audcommctr/), which can help audit committees fulfill their corporate governance responsibilities.

The SEC issues an interpretive release, Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations (www.sec.gov/rules/interp/33-8350.htm). Commonly called MD&A, such information is included in public companies’ disclosure documents. The guidance emphasizes the MD&A should not be merely a recitation of financial statements in narrative form or otherwise uninformative technical responses, neither of which provides the important management perspective an MD&A should offer. Instead, the release encourages top-level management to participate in drafting the MD&A and provides guidance regarding the overall presentation and focus of MD&A; emphasis on analysis of financial information; known material trends and uncertainties; key performance indicators, including those that are nonfinancial in nature; liquidity and capital resources and critical accounting estimates. The release neither creates new—nor modifies existing—legal requirements.

AICPA Chairman S. Scott Voynich appoints a task force, led by past chairman James G. Castellano, to study financial reporting by privately held businesses. To provide members in business and industry with information they can use to meet their evolving reporting responsibilities, the group will speak with, for example, investors, credit rating agencies and other stakeholders in the financial reporting process. Voynich said the task force’s strategy will be to identify any informational deficiencies in private companies’ traditional GAAP-based financial statements and propose appropriate solutions on behalf of the profession.

GASB issues a proposed Technical Bulletin, Tobacco Settlement Recognition and Financial Reporting Entity Issues, which addresses accounting treatment by state or local governments in connection with settlements made by U.S. tobacco companies (www.gasb.org/exp/tb2003-b.pdf). The proposal also clarifies asset and revenue recognition guidance for such transactions by the settling governments and the settlement authorities. Comments are due March 2.

The International Accounting Standards Board (IASB) publishes 13 revised international accounting standards (IASs) to address concerns, questions and criticisms raised by securities regulators and other interested parties about the existing set of IASs (www.iasb.org.uk). The revised standards are IAS 1, Presentation of Financial Statements; IAS 2, Inventories; IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors; IAS 10, Events after the Balance Sheet Date; IAS 16, Property, Plant and Equipment; IAS 17, Leases; IAS 21, The Effects of Changes in Foreign Exchange Rates; IAS 24, Related Party Disclosures; IAS 27, Consolidated and Separate Financial Statements; IAS 28, Investments in Associates; IAS 31, Interests in Joint Ventures; IAS 33, Earnings per Share and IAS 40, Investment Property. The IASB also withdrew IAS 15, Information Reflecting the Effects of Changing Prices.

The Federal Deposit Insurance Corp. requests comments on a proposed rule it issued in conjunction with the Federal Reserve Board, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, the Securities and Exchange Commission, the Federal Trade Commission and the Commodities Futures Trading Commission (www.sec.gov/rules/concept/34-48966.htm). Under the Gramm-Leach-Bliley Act of 1999, financial institutions must give customers written notice of their privacy policies and practices, including information on how to request that personal information not be shared with other organizations or individuals. The proposed rule’s purpose is to simplify—without unnecessarily burdening banks—the language in such notices so that customers will be better able to understand and to manage the ways these organizations use confidential data. Comments are due March 29.

The AICPA professional issues task force issues Practice Alert 2003-3, Acceptance and Continuance of Clients and Engagements, to give practitioners and their firms guidance on establishing policies and procedures for deciding whether to accept or continue a client relationship and whether to perform a specific engagement for that client (www.aicpa.org/download/secps/pralert_03_03.pdf). The alert discusses the following elements of an effective client acceptance program: availability of competent personnel; communication with predecessor accountants, including auditors; assessment of management’s commitment to the appropriate application of GAAP and implementing and maintaining effective internal controls; assessment of the entity’s financial viability; auditor independence and objectivity; inquiries of third parties and background investigations. The task force encourages AICPA member firms to incorporate the alert’s guidance as soon as practicable.

XBRL International, a global consortium of more than 200 accounting, technology and financial service organizations, releases version 2.1 of extensible business reporting language (XBRL), a protocol for electronic financial reporting (www.xbrl.org/newsandevents/index.asp?sid=4). The new implementation will make it easier for software developers to create XBRL tools that work without major modifications to operating systems.

The AICPA has developed comprehensive guidelines to assist colleges and universities in designing, implementing and administering meaningful internship programs and other forms of experiential learning (www.aicpa.org/members/div/career/edu/internships.htm). The guidance classifies various programs, provides examples of program administration and evaluation forms and refers to the AICPA core competency framework (www.aicpa.org/edu/corecomp.htm).

FASB begins presenting its meetings via audio webcast for free (www.fasb.org). Users must have Windows Media Player to connect to the webcasts. FASB continues to offer telephone recordings of its meetings at 800-846-4717.