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The SEC in March released Staff Accounting Bulletin (SAB) no. 105, Application of Accounting Principles to Loan Commitments (www.sec.gov/interps/account/sab105.htm). It adds section DD, “Loan Commitments Accounted for as Derivative Instruments,” to topic 5, “Miscellaneous Accounting,” of the commission’s codification of SABs. The new section provides interpretive guidance SEC-registered companies should consider when recognizing such commitments, and it emphasizes certain disclosure requirements that may be relevant to mortgage banking activities.

The AICPA in March continued its efforts to help CPA firms improve their audit services to clients: See “Institute Launches Employee Benefit Plan Audit Quality Center.” Additional information is available at the center’s Web site, www.aicpa.org/ebpaqc/homepage.htm, which now is accepting member applications.

The International Accounting Standards Board (IASB) in February issued International Financial Reporting Standard (IFRS) 2, Share-based Payment, on accounting for such transactions, including grants of share options to employees (www.iasb.org/news/press.asp). Until the issuance of IFRS 2, international accounting standards did not address the recognition or measurement of options-based compensation expenses.

At press time, a spokesperson for the Financial Accounting Standards Board (FASB) said it would issue an exposure draft on this subject in late March and release final stock-based compensation guidance by the end of the year. She said FASB’s position is very similar on all key points to that of the IASB in requiring companies to use a fair-value approach to recognize the cost of employee stock options at grant date as an expense on their income statements.

The Federal Accounting Standards Advisory Board published an exposure draft (ED), Presentation of Significant Assumptions for the Statement of Social Insurance: Amending SFFAS 25, in March. The ED proposes requiring disclosure of significant assumptions underlying the “statement of social insurance,” which—for federal government entities administering a social insurance program—reports the net present value of long-term cash-flow forecasts of taxes and benefits relating to the Social Security, Medicare, Black Lung and Railroad Retirement Board programs. Thus, the proposal would reclassify significant assumptions as basic information rather than as required supplementary information. The proposed disclosures are intended to help financial statement users assess uncertainty in a government entity’s long-range projections. Comments are due May 17.

The international financial reporting interpretations committee of the International Accounting Standards Board released in March draft interpretation D5, Applying IAS 29, Financial Reporting in Hyperinflationary Economies for the First Time (www.iasb.org/uploaded_files/documents/8_39_ifric-d05.pdf). The proposed interpretation contains guidance on how an entity should restate its financial statements in the first year it identifies hyperinflation in the economy of its functional currency. Comments are due May 14.

The international auditing and assurance standards board (IAASB) of the International Federation of Accountants in February issued a revised international standard on auditing (ISA) requiring auditors to be more proactive in considering the risk of fraud in financial statements (www.ifac.org/store/). The Auditor’s Responsibility to Consider Fraud in the Audit of Financial Statements builds on the audit risk standards the board issued in 2003 and requires the auditor to focus on areas where there is a risk of material misstatement due to fraud, including management fraud. The revised standard is effective for audits of financial statements for periods beginning on or after December 15, 2004.

The board also issued two quality control standards directed to both audit firms and engagement teams. The first, International Standard on Quality Control 1 (ISQC1), establishes a firm’s responsibility to set up and maintain a system of quality control for all audit and assurance engagements (www.ifac.org/store/). The second, ISA 220, Quality Control for Audits of Historical Financial Information, establishes standards for the specific responsibilities of firm personnel for an individual audit engagement, based on the quality control requirements in ISQC1 (www.ifac.org/store/). Both quality control standards are effective June 15, 2005.

The AICPA is scheduling an additional exam for CPAs interested in earning the AICPA Accredited in Business Valuation (ABV) credential. Usually administered once annually, the exam is being offered a second time this year—on July 26–31—for the benefit of interested members. Information on the credential, the exam and exam review courses is available at www.aicpa.org/abvinfo.

The Financial Accounting Foundation, which funds and oversees the Financial Accounting Standards Board (FASB) and the Government Accounting Standards Board (GASB), in February reappointed one member to each board, effective July 1. Edward W. Trott, who joined FASB in 1999, will begin a second five-year term, and Paul R. Reilly, a GASB member since 1995, will start a one-year term.

XBRL International, a nonprofit consortium of more than 200 organizations including the AICPA, in March elected Kurt Ramin chairman of its steering committee, succeeding Walter Hamscher. Ramin is director of the International Accounting Standards Committee Foundation.

The Import Administration of the Commerce Department needs CPAs with two or more years of public accounting experience to perform cost-of-production investigations of foreign manufacturers. The positions—based in Washington, D.C.—require knowledge of GAAP, GAAS and cost-accounting systems for manufacturing enterprises and require some travel to Europe, Asia and South America. Starting salaries range from $59,302 to $77,096. Candidates, who must be U.S. citizens, can send their resumes by fax to 202-482-4795 or e-mail to Accounting_Office@ita.doc.gov.

The Office of the Comptroller of the Currency is accepting applications for its Professional Accounting Fellowship program for CPAs who are employed as managers and have five or more years of bank accounting experience, a solid understanding of GAAP and strong analytical and communication skills. Application information is available on the Web at www.occ.treas.gov or by phone at 202-874-5180.

The AICPA needs CPA volunteers to serve on content subcommittees that review questions for the computerized CPA examination. Topics include audit and attestation, financial accounting and reporting, regulation, and business environment and concepts. Information is available from Linda Devonish-Mills by e-mail at lmills@aicpa.org or by phone at 201-938-3196.