Securities & Exchange Committee

-established by Securities & Exchange Act of 1934

-all issuers are subject to SEC

-legal authority to establish GAAP

-issued: Regulation S-X, Financial Reporting Releases (FRR), Accounting Series Releases (ASR), Interpretive release (IR), Staff Accounting Bulletins (SAB), and EITF Topic D and SEC Observer comments

-CAP part-time committee of AICPA

-promulgated Accounting Research Bulletings (ARB)

-determined GAAP from 1939 - 1959

-APB part-time committee of AICPA

-issued Accounting Principles Board Opinions (APBO) and APB Interpretations

-determined GAAP from 1959 - 1973

-FASB independent full time organization established in 1973

-issued Statements of Financial Accounting Standards (SFAS), FASB Interpretations (FIN), FASB Technical Bulletins (FTB), Emerging Issues Task Force Statements (EITF), FASB Staff Positions, FASB Implementation Guides and Statements of Financial Accounting Concepts (SFAC)

-7 full time members serve 5 year terms and may be reappointed for 1 additional term, must sever all ties with businesses

-effective 07/01/09

-single source of authoritative nongovernmental US GAAP

-include following literature: FASB SFAS, Interpretations, Technical Bulletins, Staff Positions, Staff Implementations Guides, Statement No. 138; EITF Abstracts & Topic D; Derivative Implementation Group Issues; APBO; ARB; Accounting Interpretations; AICPA Statement of Position, Auditing & Accounting Guides, Practice Bulletins, Technical Inquiry Service; SEC S-X, FRR, ASR, IR, SAB & EITF Topic D

-IASB established in 2001 as part of International Accounting Standards Committee (IASC) foundation

-purpose is to develop a single set of high quality global accounting standards

-12 full time members 2 part time members

-issues International Financial Reporting Standards (IFRS)

-replaced SFAC No. 1 & 2

-Chapter 1: Objective of General Purpose FInancial Reporting

-Chapter 3: Qualitative Characteristics of Useful Financial Information

-Relevance: Predictive value, Materiality, Confirming Value

-Faithful Representation: Freedom of error, Completeness, Neutrality

-Comparability

-Understandability

-Timeliness

-Verifiability

-recognize revenues/gains when the earnings process is complete or virtually complete

-recognize expenses/losses immediately

-Using Cash Flow Information and Present Value in Accounting Measurements (more objective than I/S)

-only applies to measurement issues for assets and liabilities that are determined using future cash flows only

-estimate of future cash flow

-expectations about timing variations of future cash flows

-time value of money (risk-free rate of interest)

-the price for bearing uncertainty

-other factors (liquidity issues & market imperfactions)

-performance for period of time

-purpose is to provide information about the uses of funds in the income process (expenses), the uses of funds that will never be used to earn income (losses), the sources of funds created by those expenses (revenues), and the sources of funds not associated with the earnings process (gains)

-useful in determining profitability, value for investment purposes, and credit worthiness

-IDE (I/S) A (R/E)

-Income (loss) from continuing operations

-income (loss) from Discontinued operations

-Extraordinary items

-Accounting principle change cumulative effect

-I of IDEA

-includes: operating activites, non-operating activites and income taxes

-D of IDEA

-includes: impairment loss, G/L from actual operations from component, & G/L on disposal of component

-included in the period incurred

-net of tax

-E of IDEA

-material, unusual & infrequent

-natural disasters may or may not qualify

- examples: expropriation of plant by the government; prohibition of a product line by newly enacted law/regulation; certain unusual & infrequent G/L from extinguishment of debt

-A of IDEA

-include: changes in estimate (prospective); changes in accounting principles (retrospective); changes in accounting entity (restate)

-non-owner transactions

-includes all changes in equity during a period except those resulting from investments by owners and distributions to owners

= Net Income + Other Comprehensive Income

- Income from continuing operations

- Discontinued operations

- Extraordinary Items

-direct to equity

-P: pension adjustments

-U: unrealized G/L (available fos sale securities)

-F: foreign currency items

-E: effective portion cash flow hedges

-R: revaluation surplus (IFRS only)

-prohibited by IFRS

-comprehensive income may be displayed as a separate column in the statement of owners' equity

-integral part of F/S as 1st or 2nd note required by IFRS & GAAP

-identifies/deacribes: measurement bases; accounting principles/methods; criteria; policies; pricing

-common policies included: basis of consolidation; depreciation methods; amortization of intangibles; inventory pricing

-items not included: composition & amounts of accounts; details of changes in accounting principles; dates of maturiy & amounts; yearly computation of depreciation/amortization/depletion

-changes in stockholders' equity

-required marketable securities disclosure

-contingency losses

-contractual obligations (including restrictions on specific assets/liabilities)

- pension plan description

-not required by GAAP or IFRS

-generally concerned with quarterly reports

-match revenues and expenses by quarter

-timeliness is emphasized over reliabilty

-viewed as integral part of financial statements

-objective is to provide information on the business activities and the economic environment of a company to help users of the financial statements: better understand performance; better assess prospects for future net cash flows; and make more informed judgments about the enterprise as a whole

-use same accounting principles as main F/S

-no elimination of intercompany transactions

-component that engages in business activities from which it may earn revenues and incure expenses

-results are regularly reviewed by cheif operating decision maker

-discrete financial information is available

-corporate headquarters and pension plan not considered operating segments

-10%: revenue, profit/loss, or assets

-75%: additional operating segments need to be identified as reportable segments until 75% of external revenue is included in reportable segments

Revenues (for that segment)

less: directly traceable costs

less: allocated costs (by the CFO)

=operating profit/loss (for that segment EBIT)

excludes: general corporate revenues/expenses, interest expense, income taxes, extraordinary items, G/L from discontinued operations

-principal operations have not commenced

-principal operations have generated insignificant amount of revenue

-start up, organizational costs are expensed immediately under GAAP

-price to sell an asset or transfer a liabilty in an orderly transaction between market participants at the measurement date

-use principal market: market with greatest volume

-if no principal market, use most advantageous market: market with best price after considering transaction costs

-market approach: uses prices from market transactions involving identical/comparable assets/liabilities

-income approach: converts future amounts to a single discounted amount

-cost approach: uses current replacement cost

-level 1: most relieable, quited prices in active markets of identical assets/liabilities

-level 2: other than quoted market prices that are directly or indirectly observable for the asset/liabilty

-level 3: management estimates, unobservable inputs for asset/liability

-requires at least 3 B/S and 2 of each of all other F/S

-date of transition is date of opening B/S (beginning of prior period)

-use same accounting policies in its opening IFRS B/S & in all periods presented in the first IFRS F/S

-entity should disclose how the transition affected the F/S (use reconciliations of equity and comprehensive income)

-required by SEC when a company issues new securities

-includes: disclosures about securities; relationship of new securities to old securities; audited F/S; description of business risk

-filed annualy by issuers

-deadline is 60 days after fiscal year end for large accelerated filers, 75 days for accelerated filers, and 90 days for all other filers

-contains: financial disclosures, summary of financial data, MD&A, and audited F/S

-filed quarterly by issuers

-deadline is 40 days after fiscal quarter end for laarge accelerated and accelerated filers, and 45 days for all others

-contains: unaudited F/S, interim MD&A, & certain disclosures

-filed annually by foreign private issuers

-40: Canadian companies registered with SEC

-20: other non- US registrants

-similar to 10-K

-contain: financial disclosures, summary of financial data, MD&A, and audited F/S (using GAAP/IFRS/or other with a reconciliation to GAAP)

-semi-annually by foreign private issuers

-similar to 10-Q

-contains: unaudited F/S, MD&A, and certain disclosures

-form & content of and requirements for interim and annual F/S to be filed with the SEC

-interim: condensed F/S are allowed; may omit summary of significant policies

-annual: must be audited and include BS of 2 most recent years and 3 years of all others