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SEC Trends & Developments - Winter 2012 - Accounting Standards Update

Entertainment—Films (Topic 926): Accounting for Fair Value Information That Arises after the Measurement Date and Its Inclusion in the Impairment Analysis of Unamortized Film Costs (a consensus of the FASB Emerging Issues Task Force) (ASU 2012-07) 

The objective of this Accounting Standards Update ("ASU") is to align the guidance on fair value measurements in the impairment test of unamortized film costs with the guidance on fair value measurements in other instances within U.S. GAAP. The amendments eliminate certain requirements related to an impairment assessment of unamortized film costs for all entities that follow Topic 926 and clarify when unamortized film costs should be assessed for impairment. For SEC filers, the amendments are effective for impairment assessments performed on or after December 15, 2012. For all other entities, the amendments are effective for impairment assessments performed on or after December 15, 2013.

Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution (a consensus of the FASB Emerging Issues Task Force) (ASU 2012-06) 

This ASU aims to resolve current diversity in practice about how to interpret the terms on the same basis and contractual limitations when subsequently measuring an indemnification asset recognized in a government-assisted (Federal Deposit Insurance Corporation or National Credit Union Administration) acquisition of a financial institution that includes a loss-sharing agreement (indemnification agreement). For public and nonpublic entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted.

Statement of Cash Flows (Topic 230): Not-for-Profit Entities: Classification of the Sale Proceeds of Donated Financial Assets in the Statement of Cash Flows (a consensus of the FASB Emerging Issues Task Force) (ASU 2012-05) 

The amendments in this ASU require a not-for-profit to classify cash receipts from the sale of donated financial assets consistently with cash donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon receipt were directed without any not-for-profit-imposed limitations for sale and were converted nearly immediately into cash. Accordingly, the cash receipts from the sale of those financial assets should be classified as cash inflows from operating activities, unless the donor restricted the use of the contributed resources to long-term purposes, in which case those cash receipts should be classified as cash flows from financing activities. Otherwise, cash receipts from the sale of donated financial assets should be classified as cash flows from investing activities by the not-for-profit. The amendments in this ASU are effective prospectively for fiscal years, and interim periods within those years, beginning after June 15, 2013. Retrospective application to all prior periods presented upon the date of adoption is permitted. Early adoption from the beginning of the fiscal year of adoption is permitted. 

Technical Amendments and Improvments (ASU 2012-04) 

In October 2012, the FASB issued ASU No. 2012-04, Technical Corrections and Improvements, to provide various minor corrections and clarifications based on feedback received from constituents on the Codification.  

Technical Amendments and Corrections to SEC Sections (ASU 2012-03) 

In August 2012, the FASB issued ASU No. 2012-03 on amendments to SEC Paragraphs pursuant to SEC Staff Accounting Bulletin No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22. There are no amendments to the XBRL taxonomy as a result of the amendments in this ASU. 

Impairment of Indefinite-Lived Intangible Assets (ASU 2012-02) 

In July 2012, the FASB issued ASU No. 2012-02, Intangibles – Goodwill and Other (Topic 350): Test Indefinite-Lived Intangible Assets for Impairment.  The primary objective of this ASU is to simplify how an entity tests indefinite-lived intangible assets other than goodwill for impairment and to improve consistency in impairment testing guidance among long-lived assets. The new guidance offers an option to assess qualitative factors when testing indefinite-lived intangible assets annually to determine whether it is more likely than not that the asset is not impaired. This amendment is similar to the goodwill impairment testing guidance introduced in ASU No. 2011-08. An entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test or resume performing the qualitative assessment in any subsequent period. If, after assessing the totality of events and circumstances, an entity concludes that it is more likely than not that the indefinite-lived intangible asset is impaired, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Subtopic 350-30. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.

Health Care Entities (ASU 2012-01) 

The amendments in ASU No. 2012-01, Health Care Entities (Topic 954): Continuing Care Retirement Communities – Refundable Advance Fees, clarify when to recognize  refundable advance fees as deferred revenue and therefore eliminate diversity in practice in the continuing care retirement communities. An entity should classify an advance fee as deferred revenue when a continuing care retirement community has a resident contract that provides for payment of the refundable advance fee upon reoccupancy by a subsequent resident, which is limited to the proceeds of reoccupancy. Refundable advance fees that are contingent upon reoccupancy by a subsequent resident but are not limited to the proceeds of reoccupancy should be accounted for and reported as a liability. For public entities, the amendments in this Update are effective for fiscal periods beginning after December 15, 2012. Nonpublic entities will apply the amendments in this Update for fiscal periods beginning after December 15, 2013. Early adoption is permitted.

SEC Trends & Developments - Winter 2012 Issue

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