In this section, we provide brief updates on regulatory developments in auditing and accounting that may impact Japanese companies in the United States. Further discussion of the issues can be found in KPMG's Department of Professional Practice's Defining Issues.
Please contact Hideo Takada (404-222-3316；firstname.lastname@example.org) or Shin Kusanagi (404-222-7611；email@example.com) in the Atlanta office, or Terry Nagamine (213-955-8612; firstname.lastname@example.org) in the Los Angeles office, with questions.
On February 24, the SEC reaffirmed its continuing support for a single set of high-quality, globally accepted accounting standards and for the convergence of U.S. GAAP and IFRS; described the issues that need additional consideration before that goal is achieved; and released an SEC staff work plan to evaluate the effect that using IFRS would have on the U.S. financial reporting system. In 2011, after the SEC staff’s fact-gathering is done as outlined in the work plan and the convergence projects identified in the IASB/FASB Memorandum of Understanding are successfully completed, the SEC will determine whether, and if so, how to incorporate IFRS into the U.S. financial reporting system.
FASB ASU No. 2010-09, Subsequent Events (Topic 855) – Amendments to Certain Recognition and Disclosure Requirements amends FASB ASC Topic 855, Subsequent Events (originally issued as FASB Statement No. 165, Subsequent Events), so that SEC filers, as defined in the ASU, no longer are required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. SEC filers and conduit bond obligors for conduit debt securities that are traded in a public market continue to be required to evaluate subsequent events through the date the financial statements are issued. Entities that are neither SEC filers nor conduit bond obligors are required to evaluate subsequent events through the date the financial statements are available to be issued. Non-SEC filers continue to be required to disclose the date through which subsequent events have been evaluated, including situations in which the financial statements are revised for a correction of an error or retrospective application of U.S. GAAP.
The ASU is effective immediately, except for the use of the issued date for evaluating subsequent events by conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010.
At the FASB meeting on April 14, the Board decided to revise the quantitative and qualitative disclosure requirements in its original Exposure Draft on Loss-Contingency Disclosures and to issue a revised Exposure Draft in May based on its latest decisions. The proposal would amend the disclosure requirements in FASB ASC Subtopic 450-20, Contingencies—Loss Contingencies. The FASB will limit the comment period to 30 days.
The Board’s revisions address concerns raised by many constituents that the original proposal would have impacted attorney-client privilege and caused defendants in litigation to disclose information that would be prejudicial to their case. While some of the revised disclosure requirements are expected to be controversial, the Board believes that the revised proposal would not require entities to disclose prejudicial information and decided to eliminate the prejudicial exemption in the original Exposure Draft.
It is anticipated that, for public entities, the final ASU would be effective for fiscal years ending after December 15, 2010 (December 31, 2010 for calendar-year entities), and interim and annual periods in subsequent fiscal years. For nonpublic entities, the new requirements would be effective for the first annual period beginning after December 15, 2010, and for interim periods of fiscal years subsequent to the first annual period.