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transcript
KPMG LLP
FASB Update
Presented by:
John Lathrop, Partner KPMG LLP
September 15, 2009American Public Power Association
2009 Business & Financial Conference
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JOHN F. LATHROPPartnerKPMG LLP1000 WalnutSuite 1000Kansas City, MO 64106
Tel 816-802-5882Fax 816-817-0380jlathrop@kpmg.comFunction and SpecializationJohn is an audit partner with substantial SEC and international experience.Professional Associations
• Member, American Institute of Certified Public Accountants (AICPA)
• Member, Kansas Society of Certified Public Accountants
• Member, Missouri Society of Certified Public Accountants
Education, Licenses & Certifications• BS, University of Missouri-Columbia.• Licensed Certified Public Accountant in Missouri,
Kansas, Ohio, and Vermont.
BackgroundJohn is a partner in the Audit practice in the Kansas City office of KPMG LLP. He has more than 28 years of public accounting experience providing audit services.
Professional and Industry ExperienceJohn has served as the lead engagement partner for numerous clients in the energy, transportation, agribusiness and service industries. He has substantial SEC related experience serving as the lead engagement partner for numerous SEC registrants. This experience includes initial public offerings, debt and equity registration statements, comfort letters and responding to SEC comment letters. John has also considerable experience in accounting for business acquisitions and related purchase price allocations, income tax accounting, restructuring, derivatives and coordination and execution of complex multi-location engagements involving significant international coordination and travel. John also has experience in drafting testimony and filing testimony used in regulatory proceedings.
Technical SkillsAccounting and audit, SEC regulations, S-X rules, and FERC regulations, business combinations, and business restructurings, accounting for income taxes and derivatives.
Corporate tax provisions Publications and Speaking Engagements• Has instructed several firm-wide training sessions including:
• Rate regulated training - Rate Case School• Accounting for taxes
• Has made various presentations on accounting matters impacting utility and energy companies at various energy industry conferences.
• Co-authored training and audit used for transportation clients• Testified before the Kansas Corporation Commission.
Other Activities• Board member, Children’s Center for the Visually Impaired• Advisory Board member (1997-2002), University of Missouri School of Accounting)
John Lathrop – Résumé
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Agenda
Welcome and Introduction
FAS 141R – Business Combinations andFAS 160 – Noncontrolling Interests
FASB Projects (Shorter Term) – Guidance Expected Within the Next Year
FASB Projects (Longer Term) – Guidance Expected After One Year
Recent Accounting Developments
FAS 157 – Fair Value Measurements
Impairments
Update on IFRS
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Overview of Changes in Accounting for
Business Combinationsand Noncontrolling Interests:
The Implications of FASB No.141Rand FASB No. 160
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Significant Changes to Current Accounting
FAS 141 FAS 141R
Definition of a business
Self-sustaining and providing a return to investors
Expanded definition – only needs to be capable of generating revenue stream
Measuring equity issued
Few days before and after terms are agreed to and announced
Fair value on the acquisition date
Acquisition-related costs
Direct costs included in purchase price
Direct costs generally expensed as incurred
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Significant Changes to Current Accounting (Cont.)
FAS 141 FAS 141R
Contingent consideration
Adjustment to purchase price when contingency resolved
Fair value on the acquisition date Subsequent changes in liability recognized in earnings
Restructuring costs Recorded as a liability in purchase accounting if criteria in EITF 95-3 are met
Not recorded as a liability unless criteria in Statement 146 are met
In-process research and development (IPR&D)
Determine fair value but expensed at the acquisition date
Capitalized at fair value as indefinite-lived intangible asset not subject to amortization until completion or abandonment
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Significant Changes to Current Accounting (Cont.)
FAS 141 FAS 141R
Taxes Change in valuation allowance and tax uncertainties is adjustment to purchase price
Change in valuation allowance and tax uncertainties is recognized through earnings
Measurement period changes
Generally recognize prospectively as a change in estimate
Retrospective revision
Control obtained in stages
Apply purchase method – no gain or loss recorded
Remeasure NCI amount to FV on date control is obtained and record gain or loss
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Significant Changes to Current Accounting (Cont.)
FAS 141 FAS 160
Acquiring control, but less than 100%
Only the controlling interest is recorded at FV
Record at 100% FV
Initial measurement of noncontrolling interest (NCI)
Record NCI share at carrying value and no goodwill allocated
Record NCI at FV including its allocated share of goodwill
Balance sheet classification of NCI
Liability or mezzanine Separate component of equity
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Significant Changes to Current Accounting (Cont.)
FAS 141 FAS 160
Increase or decrease in ownership with control retained
Apply purchase method for increases; record gain or loss on sale for decreases
Record as equity transaction – no gain or loss recorded
Control is lost, but retain NCI
No remeasurement of retained interest
Retained NCI is remeasured to FV on the date control is lost
Accumulated net losses attributable to NCI
Limited to original carrying amount of NCI
NCI could have a negative carrying value
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FASB FAS 160 Scope Project
FASB project evolved from the EITF’s Issue 08-10, Selected Statement 160 Implementation IssuesProposed scope:
Decreases in ownership apply to the following:A subsidiary that is a business or nonprofit activity and is not in-substance real estate (Issue 1 of EITF 08-10)A subsidiary that is a business or nonprofit activity and is not in-substance real estate that is transferred to an equity method investee or joint venture (Issue 2 and 3 from EITF 08-10)An exchange of a group of assets that constitute a business or nonprofit activity that is not in-substance real estate for a noncontrolling interest in an entity
When an entity has a controlling financial interest in a subsidiary, apply the provisions of FAS 160 for any increases in ownership regardless of whether the subsidiary is a business, nonprofit activity, or in-substance real estate (i.e., adjustment of equity)
Effective for periods beginning after December 15, 2009, but applied retrospectively to the date FAS 160 first adopted
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Guidance Expected in the Next Year
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Going Concern
Accounting requirements previously in auditing standards Accounting requirements previously in auditing standards (AU Section 341)(AU Section 341)
Management is responsible for going concern assessmentManagement is responsible for going concern assessmentBetter alignment with IFRS (IAS 1)Better alignment with IFRS (IAS 1)
Comparison to existing auditing literatureComparison to existing auditing literatureConsistencies—definition of going concern, example conditions and events Consistencies—definition of going concern, example conditions and events that may indicate that there is substantial doubt, example considerations that may indicate that there is substantial doubt, example considerations relating to management’s plans, and disclosure requirementsrelating to management’s plans, and disclosure requirementsChanges—time period for which the assessment is required, additional Changes—time period for which the assessment is required, additional requirement for disclosure if FS not prepared on a going-concern basisrequirement for disclosure if FS not prepared on a going-concern basis
No reference to “not to exceed one year beyond FS date”No reference to “not to exceed one year beyond FS date”Time frame beyond one year is limited to a “practical time thereafter” Time frame beyond one year is limited to a “practical time thereafter”
Status – Original effective date was for interim and annual periods Status – Original effective date was for interim and annual periods ending after June 15, 2009ending after June 15, 2009
FASB currently discussing potential change to clarify the term “substantial FASB currently discussing potential change to clarify the term “substantial doubt”—could cause re-exposure of standarddoubt”—could cause re-exposure of standardNo estimated effective date for final standard—goal is 2009No estimated effective date for final standard—goal is 2009
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Proposed Statement – Disclosure of Certain Loss Contingencies
Exposure Draft issued June 2008Would expand the disclosure requirements for certain loss contingencies within the scope of Statements 5 and 141R by
Expanding the population of loss contingencies that are required to be disclosedRequiring disclosure of specific quantitative and qualitative information Requiring a tabular reconciliation of recognized loss contingenciesProviding an exemption from disclosing certain required information if “prejudicial” to an entity’s position in dispute
No disclosures would be required for loss contingencies that are assessed as remoteWould be effective no sooner than for fiscal years ending after December 15, 2009
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FSP FAS 144–d, Amending the Criteria for Reporting a Discontinued Operation
Discontinued operation defined as:Discontinued operation defined as:
An operating segment (per Statement 131) that has been An operating segment (per Statement 131) that has been disposed of or classified as held for sale, ordisposed of or classified as held for sale, or
A business as defined by Statement 141R, that meets A business as defined by Statement 141R, that meets criteria to be classified as held for sale criteria to be classified as held for sale on acquisitionon acquisition
This would be the only criteria for determining This would be the only criteria for determining whether a component is reported as whether a component is reported as discontinued operationsdiscontinued operations
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FSP FAS 144–d, Amending the Criteria for Reporting a Discontinued Operation
DisclosuresDisclosures
Objective: Enable users to assess effect of disposalObjective: Enable users to assess effect of disposal
Achieved by:Achieved by:
Disclosures required by Statement 144 paras. 47 & 48 (as amended), and Disclosures required by Statement 144 paras. 47 & 48 (as amended), and
Incremental disclosures as required by the FSPIncremental disclosures as required by the FSP
Required regardless of whether component disposed of or Required regardless of whether component disposed of or classified as held for sale is reported in disc ops or continuing opsclassified as held for sale is reported in disc ops or continuing ops
Effective for financial statements issued for FY Effective for financial statements issued for FY beginning after December 15, 2009beginning after December 15, 2009
Retrospective applicationRetrospective application
Early application permittedEarly application permitted
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FSP FAS 144–d, Amending the Criteria for Reporting a Discontinued Operation
Recent FASB WebcastAgreed that disc ops should continue to be presented on the face (users surveyed said they use the face to identify further analysis on their part)Leaning toward defining a disc op as a component of the business (separable cash flows) and including a qualitative overlay that the component disposal represents a strategic shift and an effect on trendsDid not like the notion of operating segment as it was too broad, and it would lead to very few disc ops being reportedAssuming the board can get the right level of presentation on the face, it will lead to less disclosure
16
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FASB/IASB Joint Project on Revenue
Recognition
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Background and Timetable
Joint project between the FASB and the IASB
Objective of project:Develop a single, principles-based standard to deal with all types of contracts and business sectors
Converge IFRS and U.S. GAAP
Single revenue recognition standard would replace the ~180 pieces of U.S. GAAP revenue recognition literature and IFRS revenue-related standards
Discussion Paper Issued December 19, 2008
Comments Due to FASB June 19, 2009
Exposure Draft 1H 2010
Final Standard 2011
Effective Date 2012 ?
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Scope
All contracts with customersContract – an agreement between two or more parties that creates enforceable rights and obligations, not necessarily in writingCustomer – the party that has contracted with an entity to obtain a good or a service that represents an output of the entity’s ordinary activities
Areas potentially considered for exclusion but no decisions yet
Financial instruments and some nonfinancial instrument contracts under scope of IAS 39 and related U.S. GAAP (e.g., FAS 133)Insurance contracts Leasing contracts
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Summary of Potential Changes to Current Practice
“All” performance obligations identifiedPostdelivery services separated, e.g., warrantySales incentives separatedPotentially other customer “rights,” e.g. right of return, upgrade rights, right to purchase at a discountSegmentation of a construction contract not required
More estimatesAllocation to “all” performance obligationsVSOE or other third-party evidence is not required – EITF 00-21 and SOP 97-2
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Summary of Potential Changes to Current Practice
Long-term Contract Accounting – SOP 81-1Recognition of revenue during the construction phase may not be accepted in many casesCost-to-cost method and single margin recognition may not be acceptable
Costs are expensed unless capitalizable in accordance with other standards
Revenue standards would be superseded; cost capitalization guidance could be eliminatedCurrently accepted analogies to other standards that allow for cost capitalization (e.g., FAS 91) may not be permittedContract origination costs would be expensed as incurred
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Summary of Potential Changes to Current Practice
CollectibilityConsideration of collectibility would not be a criterion for recognitionCollectibility would be considered in the measurement of rights under the contractEffect on measurement of rights is under discussion
No revenue in the absence of a contractE.g., biological assets at fair value – SOP 85-3Precious minerals – ARB 43
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FASB/IASB Joint Project on Leases
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Leases
Joint FASB/IASB Discussion Paper issued in MarchStandard expected to be exposed in first half of 2010, with final issuance mid-2011
Unlikely that accounting for existing leases would be grandfathered
Focuses on lessee accounting
Proposed changes to current practice:Right to use the leased property and obligations incurred by a lessee meet the definitions of assets and liabilities
Lease finance liability to be measured at present value of the most likely amounts to be paid over the lease term using incremental borrowing rate
Offsetting amount for right-of-use asset, plus any upfront payments
Initial measurement of uncertain cash flows for:Contingent lease payments at present value of the most likely amounts to be paid over the most likely lease term
The two boards have reached different conclusions on the measurement of contingencies
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Leases (continued)
Proposed changes to current practice, continued:
Reassessment each reporting period of most likely lease term and uncertain cash flows
Most likely lease term
No agreement on whether discount rate should change
Remeasurement offset against right-of-use asset
No immediate effect on the income statement
Uncertain cash flows
Boards have differing views when adjustments occur due to updated expectations
FASB view that adjustments recognized in P&L
IASB view that adjustments to liability recorded with offset against right-of-use asset
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Leases (continued)
Proposed changes to current practice, continued:
Subsequent accounting
Right-of-use asset amortized over the shorter of most-likely lease term or the economic life of the asset
Lease payments apportioned between interest expense and the obligation
Presentation
Liability included as financial liability on balance sheet
Differing views on whether presented separately
Right-of-use asset separately stated based upon nature (e.g., PP&E, land)
Amortization expense classified in P&L based upon nature
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Leases (continued)
Lessor-accounting issues when applying the right-to-use model
Two approaches mentioned in Discussion Paper:
Finance lease
Performance-obligation approach
Discussion paper does not address:
Sale-leaseback transactions
Subleases
Impairment model for right-of-use assets
Accounting for payments of services within the lease payments
Whether initial direct costs of lease should be capitalized
Disclosure requirements
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Recent Accounting Developments
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What is the Codification?
The Codification brings together and organizes all GAAP previously in Levels A through D of GAAP Hierarchy that was issued by a standard-setter
SFAS 168 (issued June 29, 2009) designates the Codification as the single source of authoritative U.S. GAAP for nongovernmental entities
Effective for interim and annual periods ending after September 15, 2009
SFAS 168 eliminates the previous GAAP hierarchy and designates GAAP into two levels – authoritative and nonauthoritative
Codification intended to retain existing U.S. GAAP without changing it
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Standard-Setting After Codification is Effective
New standards issued after the Codification’s release will serve to update the Codification (no longer authoritative themselves)
Will be referred to as “Accounting Standards Updates” (ASUs)ASUs will be subject to same due process procedures currently in place for new accounting pronouncements
ASUs will consist of a standard, a basis for conclusions, and Codification update instructionsASUs will be identified by year of issuance and sequence of guidance within that year
For example, the first update in 2010 would be referred to as “Accounting Standards Update No. 2010-01”
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References in Financial Statements
Financial statements for interim and annual periods ending after September 15, 2009 should use Codification references, not “legacy” GAAP references
Financial statements issued before may use legacy GAAP referencesGrandfathered guidance not included in the Codification would continue to be referenced to legacy GAAP
Acceptable referencing alternatives when those financial statements are issued after Codification is effective:
Dual-references to Codification and legacy GAAP, orCodification references only
Registrants should not use Codification references for SEC content
Refer to applicable SEC rule or regulation (for example, Regulation S-X or a Staff Accounting Bulletin)
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SFAS 165 Subsequent Events
SFAS 165 incorporated the related requirements from auditing literature into the accounting literature without significant modification
Responsibility on management; not only on auditors
Companies will be required to disclose the date through which subsequent events have been evaluated
Evaluate subsequent events through the date the financial statements are either issued or available to be issued, depending on the company’s expectation of whether it will widely distribute its financial statements to its shareholders and other financial statement users
Effective for interim or annual financial periods ending after June 15, 2009 and should be applied prospectively
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Amends Statement 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of LiabilitiesStatement 166 eliminated the following:
Qualifying Special Purpose Entity (QSPE) concept and criteria Exemption from consolidation of QSPEs in the transferor’s financial statements
ImpactAll former QSPEs are subject to consolidationMost are expected to be consolidated by transferor, servicer, or guarantor
Overview of Statement 166
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Overview of Statement 167
Amends FIN 46R, Consolidation of Variable Interest EntitiesMajor Changes
Eliminates QSPE-related scope exceptionsProvides new criteria for determining the primary beneficiary (PB) of a variable interest entity (VIE)Adds a reconsideration event for determining whether an entity is a VIEIncreases frequency of required reassessments to determine the PB of a VIERequires additional interim and annual disclosures
Objectives Address concerns raised as a result of current market conditions (e.g., primary beneficiary determination and reconsideration events)Improve financial reporting by entities involved with VIEs
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Effective as of the beginning of the first fiscal year that begins after November 15, 2009, and for interim and annual reporting periods thereafter
January 1, 2010 for calendar-year-end companiesEarly application is prohibitedFormer QSPEs will need to be evaluated for consolidation
Statements 166 and 167
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Fair ValueMeasurements
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Historical contextSFAS 157, Fair Value Measurements, issued in September 2006
Defines fair valueEstablishes a framework for measuring fair valueExpands disclosures
Statement 157 did not require any new fair value measurementsCommon fair value applications – nonfinancial
SFAS 107, SFAS 115, SFAS 133, SFAS 140, SFAS 141R, SFAS 142, SFAS 143, SFAS 144, SFAS 146
Statement 157, Fair Value Measurements
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Expiration of FSP FAS 157-2 Deferral
FASB previously granted a one-year deferral to non-recurring measurements of nonfinancial assets and liabilitiesSFAS 157 is applicable to those fair value measurements for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years
Accordingly, the deferral has now expired for many entities, including those with a calendar year-end
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Definition of Fair Value
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price)
Price in hypothetical transaction to sell an asset or transfer a liability (exit price) NOT price in actual transaction to acquire an asset or assume a liability (entry price) NOT adjusted for transaction costs
This definition applies regardless of the type of asset that is being measured at fair value, including nonfinancial items
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FSP FAS 157-4 – Scope and Overview
ScopeFair value measurements under Statement 157Does not change requirements on the use of Level 1 inputs
Provides additional guidance related to: The use of judgment in evaluating the relevance of inputs like transaction pricesEstimating fair value when the volume and level of activity for the asset or liability have significantly decreased Identifying transactions that are not orderly
Reaffirms that the measurement objective is fair value as defined in Statement 157
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions
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Proposed FSP FAS 157-f, Measuring Liabilities under SFAS 157
ScopeFair value measurements of liabilitiesComment period ended 6/1/09
Proposed Effective DateFirst reporting period (including interim periods) beginning after issuanceRedeliberations
Proposed TransitionProspective applicationChanges resulting from guidance should be accounted for as a change in accounting estimate
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Proposed FSP FAS 157-f, Measuring Liabilities under SFAS 157
Liabilities are rarely “transferred” in the marketplace; however, they may be traded as assetsIf a quoted price in an active market for an identical liability is not available, use one of following approaches:
Quoted price of identical liabilities traded as assets in active markets (Level 1 measurements)Quoted price of identical liabilities (or identical liabilities traded as assets) in inactive marketsQuoted price of similar liabilities (or similar liabilities traded as assets) in active marketsAnother valuation technique consistent with SFAS 157’s principles
Should not adjust for a restriction on transfer for the liability
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FAS 141 vs. 141RFAS 141 vs. 141R
Asset FAS 141 141R
Receivable PV of amounts to be received at appropriate current interest rates. Allowances, if necessary, are separately recognized.
FV
Raw materials Current replacement cost FV
WIP Estimated selling prices of finished goods less the sum of (a) costs to complete, (b) costs of disposal, and (c) a reasonable profit allowance for the completing and selling effort based on profit for similar finished goods
FV
Finished goods Estimated selling prices less (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity
FV
Intangibles Fair value FV
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FAS 141 vs. 141R (continued)FAS 141 vs. 141R (continued)
Asset FAS 141 141R
Other assets, including land, natural resources, and nonmarketable securities
Appraised value FV
Property, plant and equipment
To be used – current replacement cost for similar capacity unless the expected future use of the assets indicates a lower value to the acquiring entity
To be sold – at fair value less cost to sell
FV
Accounts payable, debt, accruals
PV of amounts to be paid determined at appropriate current interest rates
FSP 157-c
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FAS 141 vs. 141R (continued)FAS 141 vs. 141R (continued)
Asset FAS 141 141R
IPR&D FV as part of purchase price allocation (expensed Day 2)
FV
Defensive asset Generally, not recognized in practice EITF 08-7
Contingent Consideration
Generally, when contingency is resolved, and consideration is issued or issuable.
FV
Preacquisition contingencies
Two Steps:(1) FV – If fair value can be determined, or(2) FAS 5 – If fair value cannot be determined
FSP 141R-1
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Impairment Considerations
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Annual Goodwill Impairment Test – Step #1
Multiple reporting units –
Various valuation techniques may be used
Market capitalization, if RU is publicly traded
Income approach
Market approach
Combination
Implications of current environment:
Appropriate assumptions and sensitivity of changes in assumptions
Decline in projected cash flows compared to previous years (or year end)
Increase in discount rate to give effect to increased risk and uncertaintiesof economy, industry, business
Consider implications of restructuring plans, closures, sales of businesson goodwill allocation to RUs
Reconciliation of adjusted market capitalization to aggregate of FV of RUs
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Annual Goodwill Impairment Test – Step #2
Compare the implied FV of the reporting unit goodwill with the carrying amount of that reporting unit
Measurement of residual goodwill as a result of Bus Com purchase price allocation
Items with an effect on amount of implied goodwillUnrecognized intangiblesFair value of long-lived assets where carrying value is > than fair value, but passes undiscounted cash flows of testUnrecorded liabilities
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Current Valuation Trends
Calculating fair value of RU and intangible assets more frequently, not necessarily just on an annual basis
FAS 144 – Step 2FAS 142 – Step 2
Increasing discount ratesHigher cost of equityHigher cost of debt
Lower long-term growth rates
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Long-Lived Assets
Trigger-based test – examples:Significant decrease in market price of a LL assetSignificant adverse change in extent or manner in which LL asset is being used or in physical conditionSignificant adverse change in legal factors, business climate or adverse action by regulatorSignificant costs in excess of amount originally expected for acquisition or construction of LL assetCurrent and historical cash flow losses or projection of continuing losses associated with use of LL assetMore likely than not expectation that LL asset will be sold or disposed of significantly before end of its useful life
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Long-Lived Assets (continued)
Impairment test – Long-lived assets (asset groups) to be held and usedLL assets are grouped at the lowest level for which cash flows can be identified that are largely independent of cash flows of other asset groupsDetermine recoverability by estimating future cash flows of LL asset group
Cash flows incorporate company’s own assumptions about use of LL asset (asset group)
Compare undiscounted cash flows to carrying amountIf carrying amount exceeds undiscounted cash flows, must determine the fair value of the LL asset (asset group)
Fair value determined using FAS 157 principles
Impairment loss is measured as the amount by which the carrying amount of LL asset (asset group) exceeds its fair value
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Long-Lived Assets (continued)
Impairment test – Long-lived assets (disposal groups) classified as held-for-sale
A fair value measurement is performed every reporting period (to measure at lower of carrying amount or fair value less cost to sell)
Long-lived assets (disposal groups) classified as held-for-sale are not depreciated or amortized; they are measured at the lower of
Carrying amount, or Fair value less cost to sell
FAS 157 applies to fair value measurements of long-lived assets (disposal groups) classified as held-for-sale
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Long-Lived Assets – Challenges
Interaction of FAS 142 and FAS 144Timing/order of testing
Completion of FAS 144 test
Impairment triggers
Projected cash flowsUseful life vs. terminal value
Corporate costs
Interim review considerations
Carrying value considerationsInclusion/exclusion of liabilities
Goodwill
Corporate assets and liabilities
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Indefinite-Lived Intangible Assets
Intangibles with an indefinite useful life are not amortized under FAS 142
Each reporting period, evaluate whether the intangible continues to have an indefinite useful life
Indefinite-lived intangibles are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired
Refer to impairment indicators in FAS 144Impairment loss recognized if carrying amount exceeds fair value
FAS 157 applies to these fair value measurements
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IFRS Adoption and SEC Roadmap
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Next Steps
2009:Potential adoption of IFRS by limited number of companies meeting the “screens”Potential study by the SEC
2009–2011:SEC staff monitor progress against milestones
2011 or earlier:SEC to consider whether to require use of IFRS by all U.S. public companies
2014–2016:Potential phased-in implementation requirements
2014 for large accelerated filers
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Potential Scenarios for U.S. Issuers
1) Maintain U.S. GAAP and not allow IFRS
2) Maintain U.S. GAAP and continue convergence
3) Choice between U.S. GAAP and IFRS with reconciliation
4) IFRS plus an SEC overlay that provides additional guidance and disclosure requirements
5) Unrestricted free choice between U.S. GAAP and IFRS
6) Date-certain timetable to fully adopt IFRS
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