BNA will hold a Webcast Nov. 16 that will include discussions on the Securities and Exchange Commission’s rule that requires companies using conflict minerals, that is, gold, tin, tungsten and tantalum in their products, to file their first disclosure reports by May 31, 2014.

These are the types of minerals used in electronic devices and the SEC has said that trade in them helps finance conflict and contributes to a humanitarian crisis in the region. 

As mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC in August issued the rule, which requires companies using conflict minerals in their products, to determine if those materials came from the Democratic Republic of Congo or an adjoining country.

Some industry groups have said the rule is burdensome, costly and ineffective.  Moreover, two business groups earlier this month filed suit against the SEC in relation to the rule.

Financial Crisis GAAP Issues.
The Webinar will also focus on GAAP by the Financial Accounting Standards Board, including updates on progress by the board on some of its high priority projects. The topics are subjects of standard-setting that have given rise to practice issues put to the board or to auditors at major accounting firms.

The new disclosures related to balance sheet offsetting, for example, are effective on Jan. 1, 2013. This standard is essential for entities dealing in derivatives as well as transactions such as sale and repurchase agreements, reverse sale and repurchase agreements, securities borrowing and securities lending arrangements.

Another standard, that simplifies the testing indefinite-lived intangible assets for impairment is already effective—it is for annual and interim impairment tests performed for fiscal years beginning after Sept. 15, 2012. Early adoption is permitted.
If a public entity’s financial statement for the most recent annual or interim period has not yet been issued, early adoption is also permitted for annual and interim impairment tests performed as of a date before July 27, 2012.

This standard would be pertinent to trademarks and brand names and the like. It simplifies how entities would test for impairment of such assets and is geared towards cost effectiveness.

Here’s a sampling of the FASB issues that will be discussed (including those mentioned):

Disclosures about Offsetting: Update No. 2011-11—Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities Balance (mentioned above). It requires entities to disclose both gross and net information about instruments and transactions that are eligible for offset in the balance sheet. In addition, entities are required to disclose both gross and net information about instruments and transactions that are subject to an agreement similar to a master netting arrangement.

Impairment of Goodwill and other Intangible Assets: Update No. 2012-02—Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (mentioned above). The guidance is expected to reduce the cost and complexity of performing an impairment test for indefinite-lived intangible assets. It simplifies how an entity tests those assets for impairment and makes impairment testing guidance among categories consistent.

It allows companies to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for making a decision about whether a quantitative test needs to be performed. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent.

Other Comprehensive Income: The panel will briefly look at Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05).
ASU 2011-12 addresses the deferral of an unpopular aspect of the planned guidance OCI guidance. Specifically, the requirement to report reclassifications from AOCI to net income by line item in the front of the financial statements. This is the famous “recycling” issue (the US allows recycling; international financial reporting standards do not.)

In addition, the panel will discuss the related draft ASU 2012-240, Comprehensive Income (Topic 220) -- Presentation of Items Reclassified Out of Accumulated Other Comprehensive Income. This guidance reflects FASB proposing to pull back from the face-of-the-financial statements presentation of the reclassification from AOCI. Instead, the board has proposed showing such recycling amounts in a single footnote to the financial statement.
ASU 2012-240 was issued Aug. 16 of this year. the comment period for it just closed – on Oct. 15. Although an effective date has not yet been set, FASB is expected to call for it to be effective for public companies in their 2012 financial statements.

Spotlight on Two Ongoing Projects.
Other discussions will focus on the ongoing financial instruments project, a joint project of the FASB and the International Accounting Standards Board. The topic is being dealt with in three segments: classification and measurement, credit impairment and hedge accounting. In adddition, the panel will discuss the disclosure framework, which is aimed at improving the effectiveness of disclosures in notes to financial statements.

There will be a question and answer segment that could help clear up some of the nitty gritty issues related to all of the above--so stop by and ask the panel. 

Details on how to Sign Up.
The hour-long audio webinar will take place from 1:30 p.m. to 2:30 p.m. on Nov. 16. Panelists are:
Steve Burkholder, Bloomberg BNA Senior Staff Correspondent & Moderator
Susan Cosper, Technical Director of the Financial Accounting Standards Board and Chairman of the Emerging Issues Task Force unit
Robert Jhl, Deloitte & Touche LLP and a member of Emerging Issues Task Force
Jackson Young, Partner at Ernst & Young, LLP and a member of the Emerging Issues Task Force.

To sign up go to the link: http://www.bna.com/timely-spotlight-financial-w17179870365/

By dlugo@bna.com (Denise Lugo)