AICPA Audit and Accounting Guide, Audits of Savings Institutions

Statement 115 lists several changes in circumstances that may cause an entity to change its intent to hold a security to maturity without calling into question ("tainting") its future intent to hold other debt securities to maturity. The sale or transfer of a held-to-maturity security as a result of one of those changes in circumstances is not deemed to be inconsistent with a previously stated intent to hold a security to maturity. Sales of heldto-maturity securities with the intent to reacquire the same or substantially the same securities at some future date (for example, wash sales) or exchanges of substantially the same debt securities (for example, bond swaps) generally are not reported as sales for accounting purposes. However, those types of transactions are not specifically included Copyright © 2010, Financial Accounting Standards Board Not for redistribution Page 1in the exceptions cited in Statement 115 that would not call into question the entity’s intent to hold other debt securities to maturity. The issue is whether certain transactions involving held-to-maturity securities that are not accounted for as sales, such as wash sales and bond swaps, contradict the entity’s stated intent to hold a security to maturity and, therefore, call into question ("taint") the entity’s intent to hold other debt securities to maturity

Acquisitions ISSUE

1. Statement 142 requires goodwill to be tested for impairment at the reporting unit level at least annually using a two-step impairment test. Step 1 of the test is a screen used to identify whether a goodwill impairment may exist. In Step 1, an entity compares the fair value of a reporting unit with its carrying amount. If a reporting unit’s carrying amount exceeds its fair value, a goodwill impairment may exist. Step 2 of the test must then be performed to measure the amount of impairment, if any. In Step 2, an entity compares the implied fair value of goodwill with its carrying amount. An impairment loss is measured by the excess of the carrying amount of goodwill over its implied fair value. The implied fair value of goodwill should be determined in the same manner that goodwill is measured in a business combination under Statement 141(R) (or in an acquisition of a business or nonprofit activity by a not-for-profit entity under Statement 164). That is, an entity must allocate the fair value of a reporting unit to the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination or in an acquisition of a business or Copyright © 2010, Financial Accounting Standards Boar

for Guarantees, Including Indirect Guarantees of Indebtedness of Others

A company (lessee) enters into a lease that has been designed to qualify as an operating lease under Statement 13, as amended; however, certain characteristics of the lease have raised questions as to whether operating lease classification is appropriate: 1. Lessee residual value guarantees and participations in both risks and rewards associated with ownership of the leased property Copyright © 2001, Financial Accounting Standards Board Not for redistribution Page 12. Purchase options 3. Special-purpose entity (SPE) lessor that lacks economic substance 4. Property constructed to lessee's specifications 5. Lease payments adjusted for final construction costs

involving Stock Compensation

Contractual arrangements between entities that are in business to practice and dispense medicine (physician practices) and entities that are in business to manage the operations of those physician practices (physician practice management entities, or “PPMs”) are becoming increasingly common. The structure of those arrangements takes various forms, provides for varying degrees of participation in the management of the physician practice by the PPM, and provides for various financial arrangements. Copyright © 2010, Financial Accounting Standards Board Not for redistribution Page 1Many of the arrangements between physician practices and PPMs arise when the PPM seeks to acquire the physician practice. Legal or business reasons often preclude the PPM from acquiring the physician practice’s outstanding equity instruments and, if that is the case, then, as an alternative, the PPM often will acquire some or all of the net assets of the physician practice, assume some or all of the contractual rights and responsibilities of th

APB Opinion No. 26, Early Extinguishment of Debt ISSUE

1. This Issue addresses the accounting for preexisting relationships between the parties to a business combination. 2. The issues are: Issue 1—Whether a business combination between two parties that have a preexisting relationship should be evaluated to determine if a settlement of a preexisting relationship exists, thus requiring accounting separate from the business combination Issue 2—How the effective settlement of an executory contract in a business combination should be measured Copyright © 2008, Financial Accounting Standards Board Not for redistribution Page 1Issue 3—Whether the acquisition of a right that the acquirer had previously granted to the acquired entity to use the acquirer’s recognized or unrecognized intangible assets should be included in the measurement of the settlement amount or included as part of the business combinatio

the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions

ISSUE Company A acquires Company B in a business combination accounted for as a purchase. In connection with the acquisition, Company A intends to incur costs to exit activities at both Company A and Company B. Furthermore, in order to combine the operations of the two companies, Company A plans to incur integration costs, such as trainin

Engaged or to be Engaged in Significant Mining Operations

1. When testing mining assets for impairment under Statement 144, some mining entities exclude estimated cash flows associated with the economic value of a mining asset1 beyond that asset's proven and probable reserves, and those estimated cash flows may also exclude the effects of anticipated fluctuations in the future market price of minerals over the period of cash flows. As a result, some mining entities also disregard those factors when allocating the purchase price of a business combination to acquired mining assets. The primary concern is that an acquired mining asset may be subject to a 1 Mining assets include mineral properties and rights. Copyright © 2008, Financial Accounting Standards Board Not for redistribution Page 1day-two impairment if the value beyond proven and probable reserves (VBPP) and anticipated future market price increases are considered in the purchase price allocation but subsequently excluded in cash flow analyses used in an impairment test under Statement 144. The fair value of a mining asset generally includes both VBPP and a

ISSUE

An entity enters into forward contracts to acquire securities that will be accounted for under Statement 115 or purchases options to acquire those securities. The forward contracts and options are not covered by Statement 115. The forward contracts, purchased options, and underlying securities are denominated in the same currency as the entity's functional currency and there is a period of time between the date the forward contracts are entered into or the options are purchased and the date the underlying securities are acquired. This Issue addresses only the accounting for forward contracts and purchased options whose terms require physical settlement of the securities. The issue is how to account for forward contracts and purchased options with no intrinsic value at acquisition that are entered into to purchase securities that will be accounted for under Statement 115 during the period that the forward or option is outstanding and when the securities are acquired. EITF DISCUSSION Copyright © 2006, Financial Accounting Standards Board Not for redistributio

SEC Staff Accounting Bulletin No. 82, Certain Transfers of Nonperforming Assets ISSUE

A savings institution (Thrift) is acquired pursuant to an assistance agreement (Agreement) between the acquiror and the Federal Savings and Loan Insurance Corporation (FSLIC). Under the Agreement, the acquiror may receive a note receivable from the FSLIC, which typically equals the amount by which the fair value of the Thrift's liabilities exceeds the fair value of its assets. In addition, the acquiror may infuse additional capital into the Thrift that, with the FSLIC assistance, is expected to make the Thrift a viable entity. The assistance provided by the FSLIC under the Agreement may include (1) yield maintenance assistance (which guarantees additional interest on specified interest-bearing assets, a level of return on specified non-interest-bearing assets, reimbursement if covered assets are ultimately collected or sold for amounts that are less than a specified amount, or any combination thereof), (2) indemnification against certain loss contingencies, and (3) the purchase by the FSLIC of Copyright © 2008, Financial Accounting Standards Board Not for redistribution Page 1equity securities issued by the Thrift for cash or a note receivable from the FSLIC. Under the terms of the Agreement, the FSLIC may be entitled to share in certain tax benefits that may b

FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities

enterprise purchases for cash the credit card portfolio, including the cardholder relationships, of a financial institution. The amount paid exceeds the sum of the amounts due under the credit card receivables. [Note: See STATUS section.] The issues are: 1. Whether the difference between the amount paid and the sum of the balances of the credit card loans at the date of purchase (the premium) should be allocated between the loans acquired and any identifiable intangible assets acquired 2. Over what periods the amounts allocated to the loans acquired and the identifiable intangible assets acquired should be amortized. EITF DISCUSSION The Task Force reached a consensus on the first issue that when an enterprise purchases a credit card portfolio including the cardholder relationships, the difference between the amount paid and the sum of the balances of the credit card loans at the date of purchase (the premium) should be Copyright © 2010, Financial Accounting Standards Board Not for redistributio