Introduction

What is US GAAP

Generally Accepted Accounting principles is a technical term in financial accounting. Generally accepted
accounting principles encompass the conventions, rules and procedures necessary to define accepted
accounting practice at a particular time. The standard of “generally accepted accounting principles” includes
not only broad guidelines of general application, but also detailed practices and procedures.

Generally accepted accounting principles are conventional – that is, they become generally accepted by
agreement (often tacit agreement) rather than by formal derivation from a set of postulates or basic concepts.
The principles have developed on the basis of experience, reason, custom, usage and to a significant extent,
practical necessity.
Accounting principles are usually directed towards solutions that are objective, conservative and verifiable.
There are two broad categories of accounting principles:
 Measurement
 Disclosure
Measurement principles determine the timing and basis of items, which enter the accounting, cycle and
impact the financial statements. These are quantitative standards, which require numerically precise answers
to problems and activities subject to large amounts of uncertainty.
Disclosure principles deal with factors that are not always numerical. Such disclosures involve qualitative
features that are essential ingredients of a full set of financial statements. Disclosure principles complement
measurement standards by explaining these standards and giving other information on accounting policies,
contingencies, uncertainties, etc., which are essential ingredients in the analytical process of accounting.
Financial statements are prepared and presented for external users by many enterprises around the world.
Although such financial statements may appear similar from country to country, there are differences, which
have probably been caused by a variety of social, economic and legal circumstances and by different countries
having in mind the needs of different users of financial statements when setting national requirements.
These different circumstances have led to the use of a variety of definitions of the elements of financial
statements; that is, for example, assets, liabilities, equity, income and expenses. They have also resulted in
the use of different criteria for the recognition of items in the financial statements and in a preference for
different bases of measurement. The scope of the financial statements and the disclosures made in them has
also been affected. However, the basic accounting assumptions and concepts envisaged by the various
accounting standards,

Whilst the International Accounting Standards Committee (IASC) is committed to narrowing these differences
by seeking to harmonise regulations, accounting standards and procedures relating to the preparation and
presentation of financial statements, countries round the world continue to follow the Accounting Standards
issued by their local Accounting bodies.

Mandatory and Preferable GAAP

Category (A) specified by SAS 69 (discussed under Chapter III) constitutes mandatory GAAP. Any deviation
from accounting principles specified by the designated rule-making body would require an auditor to either
qualify the opinion or explain in the body of the report the reasons and effects of the departures. Independent
auditors agree on the existence of generally accepted accounting principles, but the determination that a
particular accounting principle is generally accepted may be difficult because no single reference source exists
for all such principles.

Departures from positions given by publications in the second and third categories would require auditors to
document and justify their conclusions. Although the positions constitute GAAP, they represent preferable
viewpoints, not mandatory ones. Preferable accounting principles have historically been specialized
principles of particular industries, which may not be transferable to other industries or to general business
accounting policies.

Certain preferable accounting principles in the past have become mandatory principles by the actions of the
FASB. In Statement 32, the Board indicated that accounting principles and practices in certain AICPA

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Introduction

Statements of Position and Accounting and Auditing Guides were preferable accounting principles. This
recognition by the Board raised the status of these pronouncements which at that time

Materiality

Materiality as a concept has great significance in understanding, researching, and implementing GAAP. Each
Statement of Financial Accounting Standards (SFAS) issued by the FASB concludes by stating that the
provisions of the statement are not applicable to immaterial items.

Materiality is both a qualitative and quantitative concept. Certain events or transactions are material because
of the nature of the item regardless of the dollar amounts involved. The enactment of prohibition outlawing
the sale of most alcoholic beverages was a significant event to companies that produce and sell such products.
Offers to buy or sell assets for more or less than book value, litigation proceedings against the company for
price fixing or antitrust allegations, and active negotiations involving future profitability are all examples of
items not capable of being evaluated for materiality based upon numerical calculations.

Quantitatively, materiality has been defined in many accounting standards. For example, in SFAS 131,
Disclosures about Segments of an Enterprise and Related Information, a material segment or customer is
defined as 10% or more of revenues.

The Securities and Exchange Commission has in several of its pronouncements defined materiality as 1% of
total assets for receivables from officers and stockholders, 5% of total assets for separate balance sheet
disclosure of items, and 10% of total revenues for disclosure of oil and gas producing activities.

Research of GAAP

The search for written GAAP consists primarily of analysis of the publications of various organizations
concerned with accounting principles and practices. Accounting policies are established by these authorities
in order to limit discretion and create uniformity, to the extent practical, for information and reporting
purposes.

The FASB publishes two sets of books (both loose-leaf and bound), which can assist in researching accounting
issues. The Current Text integrates all of the currently recognized standards in alphabetical order. The
AICPA Research Bulletins, APB Opinions, and FASB Standards and Interpretations, and Emerging Issues
Task Force Abstracts are combined in topical order. Supplemental guidance from the AICPA Accounting
Interpretations and FASB Technical Bulletins are also incorporated. The materials have been edited down
from the original pronouncements and may lack the clarity that can be obtained only from the unedited
version. Descriptive material including reasons for conclusions are missing. Each paragraph in the current
text is indexed back to the original pronouncement for research or follow-up referencing. The first volume of
the Current Text deals with general standards while the second volume contains industry standards for
specialized industries.

The Original Pronouncements contains all of the AICPA Accounting Research Bulletins, Interpretations and
Terminology Bulletins, the APB Opinions, Statements and Interpretations, the FASB Standards,
Interpretations, Concepts, Technical Bulletins, and Exposure Drafts. These are in two volumes in the order of
their issuance. Paragraphs containing accounting principles that have been superseded or dropped are shaded
in order to make the user aware. Such changes are identified in detail by a status page placed at the beginning
of each pronouncement which can reference the user to other areas and pronouncements.

The Securities and Exchange Commission issues Staff Accounting Bulletins and makes rulings on individual
cases that come before it, which create and impose accounting standards on those whose financial statements
are submitted to the Commission. The SEC, through acts passed by Congress, has broad powers to pre scribe
accounting practices and methods for all statements filed with it. Although it has usually preferred to
encourage the development of standards in the private sector by deferring to the AICPA and FASB, the SEC
has occasionally adopted policies that conflict with established standards. In each case, the result has been a
veto b the SEC of the standard, as the AICPA or FASB has withdrawn or amended the standard to conform to
SEC policy. Usually SEC disclosure standards require more information. However, the history of the SEC is
one of cooperative assistance in the formulation of accounting standards. Congressional committees have bee
critical of the SEC in instances where they felt that too much power was ceded to the profession itself without
adequate oversight by the Commission.

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Development of US GAAP

1920 - Widespread growth in the activities of the New York Stock Exchange
US GAAP is not governed by any Federal Companies Act. American Institute of Certified Public Accountants
(AICPA) created a committee in 1930 to cooperate with the New York Stock Exchange in creating standards
for accounting procedures. The widespread growth in the activities of the Exchange led to expanded
ownership and trading activities by an underinformed public. This lack of information caused the accounting
profession to become involved in the concept of Generally Accepted Accounting principles. This special
committee recommended five rules to the Exchange, which later in 1938 was published as Accounting
Research Bulletin (ARB 1) of the Committee on Accounting Procedure. The Committee published 51 such
Bulletins, including Accounting Research Bulletin 43, which consolidated and restated Bulletins 1 – 41.

1950 – Formation of Accounting Principle Board

During the late 1950s, the Committee was substituted by the Accounting Principle Board (APB) to promulgate
principles based primarily on the research of the Accounting Research Division. The Division was to
undertake extensive research, publish the results, and allow the Board to lead the discussions, which would
ensue concerning accounting principles and practices. The Board’s authority was enforced primarily through
prestige and Rule 203 of the Code of Professional Ethics. However, approval by the Securities and Exchange
Commission (SEC) of Board issuances gave additional support to its activities. During the entire time period
of the accounting profession’s development of accounting principles, the SEC has often taken an active role,
including its own pronouncements, where it feels the public interest demands action. The SEC has statutory
authority to establish GAAP for publicly held entities, but has relied on the accounting profession for self-
regulation.
During the 14 years of the Board, 31 opinions and 4 statements were issued. These dealt with amendments of
Accounting Research Bulletins, opinions on the form and content of the financial statements, and issuance’s
requiring changes in both the measurement and disclosure policies of the profession. However, the Board did
not utilise the Accounting Research Division, which published 15 research studies during its lifetime. Both the
Board and the Division acted independently in selecting topics for their respective agendas. The Board issued
pronouncements in areas where little research had been done, and the division performed research studies
without seeking to be all-inclusive or exhaustive in analysis.
1972 – Birth of Financial Accounting Board
Financial Accounting Standard Board (FASB) was formed in 1972. The Board consists of seven full time
members; they have diverse backgrounds with three coming from public accounting, two from private
industry and one each from academia and government.
The FASB has issued six pronouncements called Statement of Financial Accounting Concepts (SFAC) in a
series designed to constitute a foundation of financial accounting standards. The framework is designed to
prescribe the nature, function, and limits of financial accounting to be used as a guideline that will lead to
consistent standards. These conceptual statements do not establish accounting standards or disclosure
practices for a particular item. They are not enforceable under the Rules of Conduct of the Code of
Professional Ethics.

To date the FASB has issued 150 statements on Financial Accounting Standards, various Interpretations and
Technical Bulletins, and devoted substantial time and resources towards developing a Conceptual Framework
for Financial Accounting.

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 Hierarchy of US GAAP

The Auditing Standard Board (ASB) is the senior authoritative organisation in the promulgation of generally
accepted auditing standards. These standards include a phrase “present fairly in conformity with generally
accepted accounting principles”. With this responsibility and authority, the ASB has undertaken to define the
meaning of the above phrase and to delineate the sources of GAAP. The determination of which accounting
principle is applicable under a particular set of conditions may be difficult or even impossible without such a
determination of the hierarchy of GAAP by an authoritative body. The determination of which accounting
principle is applicable under a particular set of conditions may be difficult or impossible without such a
determination of the hierarchy of GAAP by authoritative body.
SAS 69, identifies the following as the hierarchy of established generally accepted accounting principles:

Authority Nongovernmental Entities State and Local Governments

Level
Highest FASB Statements and Interpretations,
APB Opinions, and AICPA Accounting
Research Bulletins.
FASB Technical Bulletins AICPA
Industry Audit and Accounting Guides,
and AICPA Statements of Position
Consensus positions of the FASB
Emerging Issues Task Force and AICPA
Practice Bulletins
GASB Statements and Interpretations plus AICPA
and FASB pronouncements if made applicable to
state and local governments by a GASB Statement
or Interpretation
GASB Technical Bulletins and the following
pronouncements if specifically made applicable to
state and local governments by the AICPA:
AICPA Industry Audit and Accounting Guides and
AICPA Statements of Position
Consensus positions of the GASB Emerging Issues
Task Force and AICPA Practice Bulletins if
specifically made applicable to state and local
governments by the AICPA

AICPA accounting interpretations, "Qs "Qs and As" published by the GASB staff, as well
and As" published by the FASB staff, as as industry practices widely recognized and
well as industry practices widely prevalent
recognized and prevalent

Other accounting literature, including Other accounting literature, including GASB

FASB Concepts Statements; AICPA
Issues Papers; International Accounting
Standards Committee Statements; GASB
Statements, Interpretations and Technical
Bulletins; pronouncements of other
professional associations or regulatory
agencies; AICPA Technical Practice Aids,
and accounting textbooks, handbooks, and
articles
Lowest
Concepts Statements; pronouncements in
categories (a) through (d) of the hierarchy for
nongovernmental entities when not specifically
made applicable to state and local governments;
FASB Concepts Statements; AICPA Issues Papers;
International Accounting Standards Committee
Statements; pronouncements of other
professional associations or regulatory agencies;
AICPA Technical Practice Aids; and accounting
textbooks, handbooks, and articles.

Detailed discussion on the Hierarchy

In SAS 69, the ASB prescribed that an independent auditor's unqualified opinion on the financial
statements depends upon the financial statements being within the framework of generally accepted
accounting principles. Without that framework, the auditor would have no uniform standard for judging
the presentation of financial position, results of operations, and cash flows in financial statements.

The auditor's opinion that financial statements present fairly an entity's financial position, results of
operations, and cash flows in conformity with generally accepted accounting principles should be based on
his or her judgment as to whether:

(a) the accounting principles selected and applied have general acceptance;

(b) the accounting principles are appropriate in the circumstances;

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Hierarchy of US GAAP

(c) the financial statements, including the related notes, are informative of matters that may affect their
use, understanding, and interpretation

(d) the information presented in the financial statements is classified and summarized in a reasonable
manner, that is, neither too detailed nor too condensed; and

(e) the financial statements reflect the underlying transactions and events in a manner that presents the
financial position, results of operations, and cash flows stated within a range of acceptable limits, that
is, limits that are reasonable and practicable to attain in financial statements.

Generally accepted accounting principles recognize the importance of reporting transactions and events in
accordance with their substance. The auditor should consider whether the substance of transactions or
events differs materially from their form. If the accounting treatment of a transaction or event is not
specified by a pronouncement covered by rule 203, the auditor should consider whether the accounting
treatment is specified by another source of established accounting principles. If an established accounting
principle from one or more sources in category (b), (c), or (d) is relevant to the circumstances, the auditor
should be prepared to justify a conclusion that another treatment is generally accepted. If there is a conflict
between accounting principles relevant to the circumstances from one or more sources in category (b), (c),
or (d), the auditor should follow the treatment specified by the source in the higher category—for example,
follow category (b) treatment over category (c)—or be prepared to justify a conclusion that a treatment
specified by a source in the lower category better presents the substance of the transaction in the
circumstances.

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Generic Issues in Applying US GAAP

Substance over form

This is one of the fundamental concepts for measurement and presentation of accounting information in the
U.S. Though the concept is not wholly alien to Indian GAAP, its application is still limited, resulting in the
legal form of a transaction often determining its measurement and presentation in the Indian financial
statements.

Pre-requisites for financial statements

While under the Indian Regulatory requirements, compliance with Companies Act, 1956 and the Accounting
Standards issued by the Institute of Chartered Accountants of India is mandatory; US Companies with
registered securities must comply with US GAAP and various filing requirements of the Securities and
Exchange Commission (“SEC”). Non-US companies with registered securities in the US may issue financial
statements under US GAAP or another comprehensive basis of accounting principles (such as IAS) provided
reconciliation to US GAAP is given in the notes. There is no federal reporting requirement for non-public
companies.

Contents of financial statements

Whilst the contents of financial statements under the Indian GAAP and the US GAAP are broadly similar,
there are significant differences in the presentation/ disclosure requirements (subsequently discussed).

True and fair override

Under Indian as well as US GAAP, entities may not depart from a standard (and from company law in the
case of India). Disclosures are required of the nature of and reason for the departure and its financial impact.

Accounting convention
Historical cost is the main accounting convention adopted by both frameworks. However, the Indian GAAP
permits revaluation, notably for property, plant and equipment. US GAAP generally prohibits revaluation but
does require certain securities (investments) and derivatives to be carried at fair value. The basic assumptions
of going concern and accrual are presumed to underlie financial statements prepared under each framework,
with understandability, relevance, reliability and comparability as the main attributes to be considered in
selecting accounting policies.

Earnings Per Share

Till very recently, there was no requirement to disclose the Earnings Per Share (EPS) under the Indian GAAP.
The Institute of Chartered Accountants of India has come out with an Accounting Standard on EPS, which
prescribes disclosure of basic and diluted EPS for public quoted companies. The US GAAP also requires the
publicly quoted companies to show primary and fully diluted earnings per share on the face of the income
statement.

Industry specific standards

US GAAP encompasses Accounting Standards for specific industries. These Standards specify the standards
of financial accounting and reporting for these industries. The industries covered by these standards are:

〉 Broadcasting Industry
〉 Banking And Thrift Industries
〉 Cable Television Industry
〉 Computer Software To Be Sold, Leased, Or Otherwise Marketed
〉 Contractor Accounting: Construction-Type Contracts
〉 Contractor Accounting: Government Contracts
〉 Development Stage Enterprises
〉 Finance Companies
〉 Franchising: Accounting By Franchisers
〉 Insurance Industry
〉 Investment Companies
〉 Mortgage Banking Activities

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Generic Issues in Applying US GAAP

〉 Motion Picture Industry

〉 Not-For-Profit Organizations
〉 Oil And Gas Producing Activities
〉 Pension Funds: Accounting And Reporting By Defined Benefit Pension Plans
〉 Real Estate: Sales
〉 Real Estate: Accounting For Costs And Initial Rental Operations Of Real Estate Projects
〉 Record And Music Industry
〉 Regulated Operations
〉 Title Plant

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Typical US GAAP issues

CONSOLIDATION
The Indian Accounting standard requires an entity presenting consolidated financial statements to consolidate
all its subsidiaries. While, the standard is not mandatory for all the Companies, Securities Exchange Board of
India requires all the listed companies to present Consolidated financial statements. Where the standard on
consolidation is not applied, the investments in subsidiary are accounted for on the basis of Accounting
Standard 13 “Accounting for Investments”
US GAAP requires consolidation where the investment held in an entity results in a parent subsidiary
relationship.
Definition of Control

U.S. Position: The usual condition for a controlling financial interest is ownership of a majority voting
interest, and, therefore, as a general rule ownership by one company, directly or indirectly, of over fifty
percent of the outstanding voting shares of another company is a condition pointing toward consolidation.

In cases where the minority shareholder has substantive rights (rights that provide the minority shareholder
with the right to effectively participate in significant decisions that would be expected to be related to the
investee's ordinary course of business), such rights should overcome the presumption that the investor with a
majority voting interest should consolidate its investee.

Indian Position: Control is evidenced by (a) the ownership, directly or indirectly through subsidiary (ies), of
more than one-half of the voting power of an enterprise; or (b) control of the composition of the board of
directors in the case of a company or of the composition of the corresponding governing body in case of any
other enterprise so as to obtain economic benefits from its activities

Exclusion

U.S. Position: A majority-owned subsidiary where control is likely to be temporary or if it does not rest with
the majority owner should not be consolidated (as, for instance, if the subsidiary is in legal reorganization or
in bankruptcy or operates under foreign exchange restrictions, controls, or other governmentally imposed
uncertainties so severe that they cast significant doubt on the parent's ability to control the subsidiary).

Indian Position: Similar to the US Position

Difference in fiscal periods

U.S. Position :It ordinarily is feasible for the subsidiary to prepare, for consolidation purposes, statements for
a period, which corresponds with or closely approaches the fiscal period of the parent. However, where the
difference is not more than three months, it usually is acceptable to use, for consolidation purposes, the
subsidiary's statements for its fiscal period. When this is done, recognition should be given by disclosure or
otherwise to the effect of intervening events which materially affect the financial position or results of
operations.

Indian Position: While similar to the US Position, the Indian Accounting Standard permits a difference of six
months.

Uniform Accounting Policies

U.S. Position: Consolidated financial statements should be prepared using uniform accounting policies for like
transactions and other events in similar circumstances. If it is not practicable to use uniform accounting
policies in preparing the consolidated financial statements, that fact should be disclosed together with the
proportions of the items in the consolidated financial statements to which the different accounting policies
have been applied
Indian Position: Similar to the US Position

Elimination of Intra-group balances and transactions

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Typical US GAAP issues

U.S. Position: Intra-group balances and intra-group transactions and resulting unrealized profits should be
eliminated in full. Unrealized losses resulting from intra-group transactions should also be eliminated unless
cost cannot be recovered.

Indian Position: Similar to the US Position

Elimination of Investment

U.S. Position: The cost to the parent of the investment are compared with the parent's equity in the
subsidiary's net assets at the date of acquisition, as determined on fair value basis. The resultant difference
being either Goodwill or negative goodwill is recognized.

Indian Position: While the cost to the parent of the investment are compared with the parent's equity in the
subsidiary's net assets at the date of acquisition, net assets as per the financial statements are considered
instead of the fair values.

Minority Interest

U.S. Position: Minority interest is disclosed separately in the Income Statement and Balance Sheet. In the
unusual case in which losses applicable to the minority interest in a subsidiary exceed the minority interest in
the equity capital of the subsidiary, such excess and any further losses applicable to the minority interest is
charged against the majority interest, unless the minority has an obligation to make good such losses.
However, if future earnings do materialize, the majority interest is credited to the extent of such losses
previously absorbed .

Indian Position: Similar to the US Position

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Typical US GAAP issues

Deferred Taxation
US. Position

The objectives of accounting for income taxes are to recognize

(a) the amount of taxes payable or refundable for the current year and
(b) deferred tax liabilities and assets for the future tax consequences of events that have been recognized in
an enterprise's financial statements or tax returns.

Basic Principles of Accounting for Income Taxes

The following basic principles are applied in accounting for income taxes at the date of the financial
statements:

a. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax
returns for the current year.
b. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to
temporary differences and carry forwards.
c. The measurement of current and deferred tax liabilities and assets is based on provisions of the
enacted tax law; the effects of future changes in tax laws or rates are not anticipated.
d. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits
that, based on available evidence, are not expected to be realized.

Temporary Differences

The tax consequences of most events recognized in the financial statements for a year are included in
determining income taxes currently payable. However, tax laws often differ from the recognition and
measurement requirements of financial accounting standards, and differences can arise between (a) the
amount of taxable income and pretax financial income for a year and (b) the tax bases of assets or liabilities
and their reported amounts in financial statements.

APB Opinion No. 11, Accounting for Income Taxes, used the term timing differences for differences between
the years in which transactions affect taxable income and the years in which they enter into the determination
of pretax financial income. Timing differences create differences (sometimes accumulating over more than
one year) between the tax basis of an asset or liability and its reported amount in financial statements. Other
events such as business combinations may also create differences between the tax basis of an asset or liability
and its reported amount in financial statements. All such differences collectively are referred to as temporary
differences in this Statement.

Deferred Tax Consequences of Temporary Differences

Temporary differences ordinarily become taxable or deductible when the related asset is recovered or the
related liability is settled. A deferred tax liability or asset represents the increase or decrease in taxes payable
or refundable in future years as a result of temporary differences and carry forwards at the end of the current
year.

Deferred Tax Liabilities

A deferred tax liability is recognized for temporary differences that will result in taxable amounts in
future years. For example, a temporary difference is created between the reported amount and the tax
basis of an installment sale receivable if, for tax purposes, some or all of the gain on the installment sale
will be included in the determination of taxable income in future years. Because amounts received upon
recovery of that receivable will be taxable, a deferred tax liability is recognized in the current year for
the related taxes payable in future years.

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Typical US GAAP issues

Deferred Tax Assets

A deferred tax asset is recognized for temporary differences that will result in deductible amounts in
future years and for carry forwards. For example, a temporary difference is created between the reported
amount and the tax basis of a liability for estimated expenses if, for tax purposes, those estimated
expenses are not deductible until a future year. Settlement of that liability will result in tax deductions
in future years, and a deferred tax asset is recognized in the current year for the reduction in taxes
payable in future years. A valuation allowance is recognized if, based on the weight of available
evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Measurement of a Deferred Tax Liability or Asset

US GAAP establishes procedures to (a) measure deferred tax liabilities and assets using a tax rate convention
and (b) assess whether a valuation allowance should be established for deferred tax assets. Enacted tax laws
and rates are considered in determining the applicable tax rate and in assessing the need for a valuation
allowance. .

A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not
that some portion or all of the deferred tax asset will not be realized

Changes in Tax Laws or Rates

US GAAP requires that deferred tax liabilities and assets be adjusted in the period of enactment for the effect
of an enacted change in tax laws or rates. The effect is included in income from continuing operations.

Indian Position

The Indian Position is primarily similar to US position. However, while the US GAAP prescribes recognizing
deferred tax asset/liability on the basis of temporary differences (liability method), the Indian accounting
standard does not provides a definite approach as it uses a hybrid concept of both the deferral method and
liability method.

Further, deferred tax asset is recognized only to the extent it is certain that the temporary differences will
reverse. Such unrecognized assets are re-assessed at each balance sheet date and recognized as deferred tax
assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available against which such deferred tax assets can be realized.

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Typical US GAAP issues

Accounting for Leases

US. Position (Lessee Perspective)

The accounting for leases, under US GAAP, is derived from the view that a lease that transfers substantially
all of the benefits and risks of ownership should be accounted for as the acquisition of an asset and the
incurrence of an obligation by the lessee (a capital lease) and as a sale or financing by the lessor (a sales-type,
direct financing, or leveraged lease). Other leases should be accounted for as operating leases, that is, the
rental of property.

A lessee classifies a lease as either a capital lease or an operating lease. If a particular lease meets any one of
the following classification criteria, it is a capital lease:

a. The lease transfers ownership of the property to the lessee by the end of the lease term.
b. The lease contains an option to purchase the leased property at a bargain price.
c. The lease term is equal to or greater than 75 percent of the estimated economic life of the leased
property.
d. The present value of rental and other minimum lease payments equals or exceeds 90 percent of the
fair value of the leased property less any investment tax credit retained by the lessor.

The last 2 criteria are not applicable when the beginning of the lease term falls within the last 25 percent of
the total estimated economic life of the leased property.

The amount to be recorded by the lessee as an asset and an obligation under a capital lease is the lesser of the
present value of the rental and other minimum lease payments or the fair value of the leased property. Leased
property under a capital lease is amortized in a manner consistent with the lessee's normal depreciation policy
for owned assets; the amortization period is restricted to the lease term, rather than the life of the asset, unless
the lease provides for transfer of title or includes a bargain purchase option. The periodic rental payments are
treated as payments of the lease obligation and interest is recorded on the remaining balance of the obligation.

If none of the criteria is met, a lessee classifies the lease as an operating lease. Neither an asset nor an
obligation is recorded for operating leases. Rental payments are recorded as rental expense in the income
statement in a systematic manner, which is usually straight-line.

Indian Position (Lessee Perspective)

The Indian Position is primarily similar to US. While US GAAP provides stringent considerations for lease
classification, the Indian Accounting Standard only includes various illustrations defining a finance lease.

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Typical US GAAP issues

Accounting for Stock Based Compensation

US. Position

US GAAP establishes financial accounting and reporting standards for stock-based employee compensation
plans. Those plans include all arrangements by which employees receive shares of stock or other equity
instruments of the employer or the employer incurs liabilities to employees in amounts based on the price of
the employer's stock. Examples are stock purchase plans, stock options, restricted stock, and stock
appreciation rights.

FAS 123, defines a fair value based method of accounting for an employee stock option or similar equity
instrument and encourages all entities to adopt that method of accounting for all of their employee stock
compensation plans. However, it also allows an entity to continue to measure compensation cost for those
plans using the intrinsic value based method of accounting prescribed by APB 25. Entities electing to remain
with the accounting in APB 25 must make pro forma disclosures of net income and, if presented, earnings per
share, as if the fair value based method of accounting defined in FAS 123 had been applied.

Under the fair value based method, compensation cost is measured at the grant date based on the value of the
award and is recognized over the service period, which is usually the vesting period. Under the intrinsic value
based method, compensation cost is the excess, if any, of the quoted market price of the stock at grant date or
other measurement date over the amount an employee must pay to acquire the stock. Most fixed stock option
plans--the most common type of stock compensation plan--have no intrinsic value at grant date, and under the
provisions of APB 25, no compensation cost is recognized for them. Compensation cost is recognized for
other types of stock-based compensation plans under the provisions of APB 25, including plans with variable,
usually performance-based, features.

For stock options, fair value is determined using an option-pricing model that takes into account the stock
price at the grant date, the exercise price, the expected life of the option, the volatility of the underlying stock
and the expected dividends on it, and the risk-free interest rate over the expected life of the option. Nonpublic
entities are permitted to exclude the volatility factor in estimating the value of their stock options, which
results in measurement at minimum value. The fair value of an option estimated at the grant date is not
subsequently adjusted for changes in the price of the underlying stock or its volatility, the life of the option,
dividends on the stock, or the risk-free interest rate.

The fair value of a share of nonvested stock (usually referred to as restricted stock) awarded to an employee is
measured at the market price of a share of a nonrestricted stock on the grant date unless a restriction will be
imposed after the employee has a vested right to it, in which case fair value is estimated taking that restriction
into account.

The pro forma amounts required to be disclosed by an employer that continues to apply the accounting
provisions of APB 25, will reflect the difference between compensation cost, if any, included in net income
and the related cost measured by the fair value based method defined in FAS 123, including tax effects, if any,
that would have been recognized in the income statement if the fair value based method had been used. The
required pro forma amounts will not reflect any other adjustments to reported net income or, if presented,
earnings per share.

Indian Position

While there is no pronouncement for accounting of stock based compensation, all Listed companies are
required to comply with the SEBI (Employee Stock Option and Employee Stock Purchase Scheme)
Guidelines, 1999. This scheme defines two types of stock based compensation

Employee stock option scheme {(ESOS): a scheme under which a company grants option to employees} and
Employee stock purchase scheme {(ESPS): a scheme under which the company offers shares to employees as
part of a public issue or otherwise}

Accounting for ESOS prescribed by SEBI is similar to US GAAP, compensation cost is measured at the grant
date based on the fair value of the award and is amortized on straight-line basis over the vesting period. Fair
value is computed on the basis of excess of market price over exercise price or by using the value of the
option using the Black Scholes formula or other similar valuation method.

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Typical US GAAP issues

In case of ESPS, excess of the market price of the shares at the date of issue over the price at which they are
issued is considered as cost of the period in which granted.

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Typical US GAAP issues

Impairment
US. Position

US GAAP require a three-step approach for recognizing and measuring the impairment of assets to be held
and used. Under that three-step approach, a company needs to:

(a) consider whether indicators of impairment of long-lived assets are present,

(b) if indicators of impairment are present, determine whether the sum of undiscounted cash flows
attributable to the assets in question is less than the assets’ carrying amount, and

(c) if the sum of the undiscounted cash flows is less than the assets’ carrying amount, recognize an
impairment loss based on the excess of the carrying amount of the assets over their respective fair
values.

Assets to be held and used by an entity are required to be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In performing
the review for recoverability, the entity should estimate the future cash flows expected to result from the use
of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and
without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized.
Otherwise, an impairment loss is not recognized. Measurement of an impairment loss should be based on the
fair value of the asset.

Indian Position

Conceptually, in line with US GAAP.

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Typical US GAAP issues

Derivatives
US. Position

FAS 133, establishes accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, (collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. If certain conditions are met, a derivative may
be specifically designated as

(a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized
firm commitment,
(b) a hedge of the exposure to variable cash flows of a forecasted transaction, or
(c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm
commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction.

The accounting for changes in the fair value of a derivative (that is, gains and losses) depends on the intended
use of the derivative and the resulting designation.

For a derivative designated as hedging the exposure to changes in the fair value of a recognized asset or
liability or a firm commitment (referred to as a fair value hedge), the gain or loss is recognized in earnings in
the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being
hedged. The effect of that accounting is to reflect in earnings the extent to which the hedge is not effective in
achieving offsetting changes in fair value.

For a derivative designated as hedging the exposure to variable cash flows of a forecasted transaction (referred
to as a cash flow hedge), the effective portion of the derivative’s gain or loss is initially reported as a
component of other comprehensive income (outside earnings) and subsequently reclassified into earnings
when the forecasted transaction affects earnings. The ineffective portion of the gain or loss is reported in
earnings immediately.

For a derivative designated as hedging the foreign currency exposure of a net investment in a foreign
operation, the gain or loss is reported in other comprehensive income (outside earnings) as part of the
cumulative translation adjustment. The accounting for a fair value hedge described above applies to a
derivative designated as a hedge of the foreign currency exposure of an unrecognized firm commitment or an
available-for-sale security. Similarly, the accounting for a cash flow hedge described above applies to a
derivative designated as a hedge of the foreign currency exposure of a foreign-currency-denominated
forecasted transaction.

For a derivative not designated as a hedging instrument, the gain or loss is recognized in earnings in the
period of change.

Under this FAS, an entity that elects to apply hedge accounting is required to establish at the inception of the
hedge the method it will use for assessing the effectiveness of the hedging derivative and the measurement
approach for determining the ineffective aspect of the hedge. Those methods must be consistent with the
entity’s approach to managing risk.

Indian Position

No pronouncement on Derivatives

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Typical US GAAP issues

Disclosure of Accounting Policies

Indian Position

All significant accounting policies adopted in the preparation and presentation of financial statements should
be disclosed.

The disclosure of the significant accounting policies as such should form part of the financial statements and
the significant accounting policies should normally be disclosed in one place.

Any change in the accounting policies which has a material effect in the current period or which is reasonably
expected to have a material effect in later periods should be disclosed. In the case of a change in accounting
policies that has a material effect in the current period, the amount by which any item in the financial
statements is affected by such change should also be disclosed to the extent ascertainable. Where such amount
is not ascertainable, wholly or in part, the fact should be indicated.

If the fundamental accounting assumptions, viz. Going Concern, Consistency and Accrual are followed in
financial statements, specific disclosure is not required. If a fundamental accounting assumption is not
followed, the fact should be disclosed.

US. Position

The accounting policies of a reporting enterprise are the specific accounting principles and the methods of
applying those principles that are judged by the management of the enterprise to be the most appropriate in
the circumstances to present fairly financial position, cash flows, and results of operations in accordance with
generally accepted accounting principles and that accordingly have been adopted for preparing the financial
statements.

All significant accounting policies followed by an enterprise shall be disclosed in its financial statements.
The format and the location of the disclosure are flexible, although preference is given to the use of a separate
summary preceding the notes to the financial statements or to presentation as the first note.

Information about the accounting policies adopted by a reporting enterprise is essential for financial statement
users. When financial statements are issued purporting to present fairly financial position, cash flows, and
results of operations in accordance with generally accepted accounting principles, a description of all
significant accounting policies of the reporting enterprise shall be included as an integral part of the financial
statements. If one or more of the basic financial statements [are issued] without the others and purport to
present fairly the information given in accordance with generally accepted accounting principles, the
statements so presented shall also include disclosure of the pertinent accounting policies.

All business enterprises are required to provide disclosures about significant accounting policies used to
prepare financial statements that are intended to be in conformity with generally accepted accounting
principles.

Disclosure of accounting policies shall identify and describe the accounting principles followed by the
reporting enterprise and the methods of applying those principles that materially affect the determination of
financial position, cash flows, or results of operations. In general, the disclosure shall encompass important
judgments as to appropriateness of principles relating to recognition of revenue and allocation of asset costs to
current and future periods; in particular, it shall encompass those accounting principles and methods that
involve any of the following:

a. A selection from existing acceptable alternatives;

b. Principles and methods peculiar to the industry in which the reporting enterprise operates, even if such
principles and methods are predominantly followed in that industry;
c. Unusual or innovative applications of generally accepted accounting principles (and, as applicable, of
principles and methods peculiar to the industry in which the reporting enterprise operates).

Financial statement disclosure of accounting policies shall not duplicate details (for example, composition of
inventories or of plant assets) presented elsewhere as part of the financial statements. In some cases, the
disclosure of accounting policies shall refer to related details presented elsewhere as part of the financial
statements; for example, changes in accounting policies during the period shall be described with cross-

1e page 17
Typical US GAAP issues

reference to the disclosure required by, "Accounting Changes," of the current effect of the change and of the
pro forma effect of retroactive application.

Whilst the Indian Standard lays much emphasis on the fundamental accounting assumptions, US GAAP
envisages the financial statements to be in accordance with generally accepted accounting principles.

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Typical US GAAP issues

Valuation of Inventories
Indian Position

Inventories are (a) assets held for sale in the ordinary course of business, (b) in the process of production for
such sale, or (c) in the form of materials or supplies to be consumed in the production process or in the
rendering of services and are valued at the lower of cost and net realisable value. The cost of inventories
should comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories
to their present location and condition. The costs of conversion of inventories include costs directly related to
the units of production, such as direct labour. They also include a systematic allocation of fixed and variable
production overheads that are incurred in converting materials into finished goods.

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and
segregated for specific projects should be assigned by specific identification of their individual costs. The cost
of other inventories should be assigned by using the first-in, first-out (FIFO), or weighted average cost
formula. The formula used should reflect the fairest possible approximation to the cost incurred in bringing
the items of inventory to their present location and condition.

US. Position

Inventory is the aggregate of those items of tangible personal property that (a) are held for sale in the ordinary
course of business [(finished goods)], (b) are in process of production for such sale [(work in process)], or (c)
are to be currently consumed either directly or indirectly in the production of goods or services to be available
for sale [(raw materials and supplies)] and are valued at the lower of cost or market except in certain
exceptional cases when it may be stated above cost. Cost is defined as the sum of the applicable expenditures
and charges directly or indirectly incurred in bringing inventories to their existing condition and location.
Cost for inventory purposes may be determined under any one of several assumptions as to the flow of cost
factors (such as first-in, first-out; average; and last-in, first-out). While US GAAP prescribes the last in first
out method, it has been under challenge with SEC registrants.

General and Administrative expenses shall be included as period charges, except for the portion of such
expenses that [are] clearly related to production and thus constitute a part of inventory costs (product charges).
Selling expenses [are not] part of inventory costs. Exclusion of all overheads from inventory costs does not
constitute an accepted accounting procedure.

Except for specified cost formula for the cost of inventories of items that are not ordinarily interchangeable
FIFO and weighted average cost formulae are permitted under the Indian GAAP. Under the US GAAP, the
cost is determined under any one of several assumptions as to the flow of cost factors (such as first-in, first-
out; average; and last-in, first-out). Further, US GAAP also permits to value inventory at higher than cost in
specific cases. (For example, precious metals having a fixed monetary value with no substantial cost of
marketing may be stated at such monetary value). Any other exceptions must be justifiable by inability to
determine appropriate approximate costs, immediate marketability at quoted market price, and the
characteristic of unit interchangeability.

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Typical US GAAP issues

Cash Flow Statement

Indian Position

The cash flow statement should report cash flows during the period classified by operating, investing and
financing activities. An enterprise presents its cash flows from operating, investing and financing activities in
a manner which is most appropriate to its business. An enterprise should report cash flows from operating
activities using either (a) the direct method, whereby major classes of gross cash receipts and gross cash
payments are disclosed; or (b) the indirect method, whereby net profit or loss is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments, and items of income or expense associated with investing or financing cash flows.

US. Position

A statement of cash flows is required as part of a full set of financial statements for all business enterprises
and not-for-profit organizations other than defined benefit pension plans and certain other employee benefit
plans and highly liquid investment companies that meet specified conditions.

A statement of cash flows shall classify cash receipts and payments according to whether they stem from
operating, investing, or financing activities. Enterprises are encouraged to report cash flows from operating
activities directly by showing major classes of operating cash receipts and payments (the direct method).
Enterprises that choose not to show operating cash receipts and payments are required to report the same
amount of net cash flow from operating activities indirectly by adjusting net income of a business enterprise
or change in net assets of a not-for-profit organization to reconcile it to net cash flow from operating activities
(the indirect or reconciliation method). If the direct method is used, a reconciliation of net income of a
business enterprise or change in net assets of a not-for-profit organization and net cash flow from operating
activities is required to be provided in a separate schedule.

Whilst the Accounting Standard on Cash Flow in India is mandatory only for entities achieving turnover of
more than Rs. 500 million, under the US GAAP, cash flow forms a part of full set of financial statements for
all business enterprises.

Note:(As per the SEBI guidelines, Publishing of Cash Flow statement is mandatory for all the listed Indian
Companies)

1e page 20
Typical US GAAP issues

Segmental Information
Indian position

All public quoted companies and non-quoted enterprises with turnover exceeding Rs 500 million are required
to provide disclosure about its reportable segments. The standard requires disclosure relating to business
segment and geographical segment. A segment (business and geographical) is a distinguishable component
that is subject to risks and returns that are different from those of other segments. The segment information
should be prepared in conformity with the accounting policies adopted for preparing and presenting the
financial statements of the enterprise as a whole.

US. Position

Under US GAAP public quoted companies are required to provide disclosure about its operating segments.
Such segments are to be determined on the basis used by the internal management to measure the
performance. Further, if a segment contributes to more than 10% of the combined total results, it should be
disclosed separately. The standard does not prescribe the accounting policies to be used and, thus, permits
alternative bases of accounting for segments, as long as the basis used for reporting segment information is the
same basis which the internal management uses for making decisions about allocating resources to the
segment and assessing its performance.

1e page 21
Typical US GAAP issues

Contingencies

Indian Position

The term "contingencies" used in this Statement is restricted to conditions or situations at the balance sheet
date, the financial effect of which is to be determined by future events which may or may not occur.

The accounting treatment of a contingent loss is determined by the expected outcome of the contingency. If it
is likely that a contingency will result in a loss to the enterprise, then it is prudent to provide for that loss in
the financial statements. If there is conflicting or insufficient evidence for estimating the amount of a
contingent loss, then disclosure is made of the existence and nature of the contingency. The existence and
amount of guarantees, obligations arising from discounted bills of exchange and similar obligations
undertaken by an enterprise are generally disclosed in financial statements by way of note, even though the
possibility that a loss to the enterprise will occur is remote. Provisions for contingencies are not made in
respect of general or unspecified business risks since they do not relate to conditions or situations existing at
the balance sheet date.

Contingent gains are not recognised in financial statements since their recognition may result in the
recognition of revenue which may never be realised. However, when the realisation of a gain is virtually
certain, then such gain is not a contingency and accounting for the gain is appropriate.

US. Position

An estimated loss from a loss contingency shall be charged to income if (a) it is probable that an asset had
been impaired or a liability had been incurred at the date of the financial statements and (b) the amount of the
loss can be reasonably estimated. Disclosure is required for loss contingencies not meeting both those
conditions if there is a reasonable possibility that a loss may have been incurred. Gain contingencies shall not
be credited to income because to do so would recognize income prior to realization.
Whilst under the US GAAP the contingent events are classified into probable, possible and remote and
accounted for accordingly, no such classification is specified under the Indian GAAP. Institute of Chartered
Accountants of India has recently introduced Accounting Standard 29 on Provisions, Contingent Liabilities
and Contingent Liabilities, which is applicable from accounting periods commencing on or after April 1,2004.
This standard is in line with the US Position and requires contingencies to be classified into probable,
possible and remote and accounted for accordingly.

1e page 22
Typical US GAAP issues

Depreciation
Indian Position

The depreciable amount of a depreciable asset should be allocated on a systematic basis to each accounting
period during the useful life of the asset. The depreciation method selected should be applied consistently
from period to period. A change from one method of providing depreciation to another should be made only if
the adoption of the new method is required by statute or for compliance with an accounting standard or if it is
considered that the change would result in a more appropriate preparation or presentation of the financial
statements of the enterprise. When such a change in the method of depreciation is made, depreciation should
be recalculated in accordance with the new method from the date of the asset coming into use. The deficiency
or surplus arising from retrospective recomputation of depreciation in accordance with the new method should
be adjusted in the accounts in the year in which the method of depreciation is changed. In case the change in
the method results in deficiency in depreciation in respect of past years, the deficiency should be charged in
the statement of profit and loss. In case the change in the method results in surplus, the surplus should be
credited to the statement of profit and loss. Such a change should be treated as a change in accounting policy
and its effect should be quantified and disclosed.

Where the historical cost of a depreciable asset has undergone a change due to increase or decrease in long
term liability on account of exchange fluctuations, price adjustments, changes in duties or similar factors, the
depreciation on the revised unamortised depreciable amount should be provided prospectively over the
residual useful life of the asset.

Where the depreciable assets are revalued, the provision for depreciation should be based on the revalued
amount and on the estimate of the remaining useful lives of such assets. In case the revaluation has a material
effect on the amount of depreciation, the same should be disclosed separately in the year in which revaluation
is carried out.

US. Position

Depreciation is the method of allocating the cost of a tangible capital asset, less salvage (if any), over the
estimated useful life of the asset in a systematic and rational manner. Except when an enterprise is
undergoing reorganization, capital assets shall not be depreciated at appraisal, market, or current values that
are above cost to the enterprise.

Property, plant, and equipment shall not be written up by an enterprise to reflect appraisal, market, or current
values which are above cost to the enterprise. However, when the accounts of an enterprise with foreign
operations are translated into U.S. currency for consolidation, such write-ups normally are eliminated.
Whenever appreciation has been recorded on the books, income shall be charged with depreciation computed
on the written-up amounts.

Change in method of depreciation should be accounted for as change in accounting principles, which suggests
that for all changes in accounting principle (a) Financial statements for prior periods included for comparative
purposes shall be presented as previously reported. (b)The cumulative effect of changing to a new accounting
principle on the amount of retained earnings at the beginning of the period in which the change is made shall
be included in net income of the period of the change (c) The effect of adopting the new accounting principle
on income before extraordinary items and on net income (and on the related per share amounts) of the period
of the change shall be disclosed. (d) Income before extraordinary items and net income computed on a pro
forma basis shall be shown on the face of the income statements for all periods presented as if the newly
adopted accounting principle had been applied during all periods affected

Whilst Schedule VI to the Companies Act, 1956 prescribes the depreciation rates for Indian companies, under
the US GAAP, depreciation is provided on the cost of a tangible capital asset, less salvage (if any), over the
estimated useful life of the asset in a systematic and rational manner. The US GAAP does not permits
revaluation of assets, thus there is no concept of providing depreciation on the same. The effect of change in
method is to be applied retroactively under both the frameworks and is to be shown in the net income for the
current year.

1e page 23
 Typical US GAAP issues

Accounting for Research and Development Cost

Indian Position

Research is original and planned investigation undertaken with the hope of gaining new scientific or technical
knowledge and understanding. Development is the translation of research findings or other knowledge into a
plan or design for the production of new or substantially improved materials, devices, products, processes,
systems or services prior to the commencement of commercial production.

The allocation of the costs of research and development activities to accounting periods is determined by their
relationship to the expected future benefits to be derived from these activities. In most cases there is little, if
any, direct relationship between the amount of current research and development costs and future benefits
because the amount of such benefits, and the periods over which they will be received, are usually too
uncertain. Research and development costs are therefore usually charged to expense in the period in which
they are incurred.

If it can be demonstrated, however, that the product or process is technically and commercially feasible and
that the enterprise has adequate resources to enable the product or process to be marketed, it may be
appropriate to defer the costs of related research and development to future periods. Research and
development costs previously written off are not reinstated because they were incurred at a time when the
technical and commercial feasibility of the project was too uncertain to establish a relationship with future
benefits and they were therefore proper charges to those past periods.

Deferred research and development costs are amortised on a systematic basis, either by reference to the sale or
use of the product or process or by reference to a reasonable time period. However, technological and
economic obsolescence create uncertainties that restrict the number of units and time period over which
deferred costs are to be amortised.

US. Position

Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that
such knowledge will be useful in developing a new product or service (hereinafter product) or a new process
or technique (hereinafter process) or in bringing about a significant improvement to an existing product or
process. Development is the translation of research findings or other knowledge into a plan or design for a
new product or process or for a significant improvement to an existing product or process whether intended
for sale or use. It includes the conceptual formulation, design, and testing of product alternatives,
construction of prototypes, and operation of pilot plants. It does not include routine or periodic alterations to
existing products, production lines, manufacturing processes, and other ongoing operations, even though those
alterations may represent improvements, and it does not include market research or market-testing activities.

All research and development costs encompassed shall be charged to expense when incurred.

Under the Indian GAAP, Research and Development (R&D) costs are expensed as incurred, except for plant
and equipment, which are capitalised and depreciated if they have alternative future uses, or amortised over
the estimated term of the R&D project, if they have no alternative future use. US GAAP, requires a similar
accounting except for that the expense on plant and equipment is charged to expenses.

1e page 24
Typical US GAAP issues

Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting
Policies

Indian Position

Ordinary activities are any activities which are undertaken by an enterprise as part of its business and such
related activities in which the enterprise engages in furtherance of, incidental to, or arising from, these
activities. All items of income and expense which are recognised in a period should be included in the
determination of net profit or loss for the period unless an Accounting Standard requires or permits otherwise.
Normally, all items of income and expense which are recognised in a period are included in the determination
of the net profit or loss for the period. This includes extraordinary items and the effects of changes in
accounting estimates.

Extraordinary items are income or expenses that arise from events or transactions that are clearly distinct from
the ordinary activities of the enterprise and, therefore, are not expected to recur frequently or regularly.
Extraordinary items should be disclosed in the statement of profit and loss as a part of net profit or loss for the
period. The nature and the amount of each extraordinary item should be separately disclosed in the statement
of profit and loss in a manner that its impact on current profit or loss can be perceived. Virtually all items of
income and expense included in the determination of net profit or loss for the period arise in the course of the
ordinary activities of the enterprise. Therefore, only on rare occasions does an event or transaction give rise to
an extraordinary item.

Prior period items are income or expenses which arise in the current period as a result of errors or omissions
in the preparation of the financial statements of one or more prior periods. The nature and amount of prior
period items should be separately disclosed in the statement of profit and loss in a manner that their impact on
the current profit or loss can be perceived. Errors in the preparation of the financial statements of one or more
prior periods may be discovered in the current period. Errors may occur as a result of mathematical mistakes,
mistakes in applying accounting policies, misinterpretation of facts, or oversight. Prior period items are
normally included in the determination of net profit or loss for the current period. An alternative approach is
to show such items in the statement of profit and loss after determination of current net profit or loss. In either
case, the objective is to indicate the effect of such items on the current profit or loss.

Accounting policies are the specific accounting principles and the methods of applying those principles
adopted by an enterprise in the preparation and presentation of financial statements. A change in an
accounting policy should be made only if the adoption of a different accounting policy is required by statute
or for compliance with an accounting standard or if it is considered that the change would result in a more
appropriate presentation of the financial statements of the enterprise.

The effect of a change in an accounting estimate should be included in the determination of net profit or loss
in:

(a) the period of the change, if the change affects the period only; or
(b) the period of the change and future periods, if the change affects both.

A change in an accounting estimate may affect the current period only or both the current period and future
periods. For example, a change in the estimate of the amount of bad debts is recognised immediately and
therefore affects only the current period. However, a change in the estimated useful life of a depreciable asset
affects the depreciation in the current period and in each period during the remaining useful life of the asset.
In both cases, the effect of the change relating to the current period is recognised as income or expense in the
current period. The effect, if any, on future periods, is recognised in future periods.

US. Position

1e page 25
Typical US GAAP issues

The term accounting change means a change in

(a) an accounting principle,

(b) an accounting estimate, or
(c) the reporting enterprise (which is a special type of change in accounting principle)

The correction of an error in previously issued financial statements is not deemed to be an accounting change.
. If prior period adjustments are recorded, the resulting effects (both gross and net of applicable income tax)
on the net income of prior periods shall be disclosed in the annual report for the year in which the adjustments
are made. If financial statements for a single period only are presented, this disclosure shall indicate the
effects of such restatement on the balance of retained earnings at the beginning of the period and on the net
income of the immediately preceding period. If financial statements for more than one period are presented,
which is ordinarily the preferable procedure, the disclosure shall include the effects for each of the periods
included in the statements. Such disclosures shall include the amounts of income tax applicable to the prior
period adjustments. Disclosure of restatements in annual reports issued subsequent to the first such post
revision disclosure would ordinarily not be required.

A change in accounting principle results from adoption of a generally accepted accounting principle different
from the one used previously for reporting purposes. The term accounting principle includes not only
accounting principles and practices but also the methods of applying them. A characteristic of a change in
accounting principle is that it concerns a choice from among two or more generally accepted accounting
principles. The nature of and justification for a change in accounting principle and its effect on income shall
be disclosed in the financial statements of the period in which the change is made. The justification for the
change shall explain clearly why the newly adopted accounting principle is preferable.

Most changes in accounting shall be recognized by including the cumulative effect, based on a retroactive
computation, of changing to a new accounting principle in net income of the period of the change but a few
specific changes in accounting principles shall be reported by restating the financial statements of prior
periods

For all changes in accounting principle except for few specific cases (discussed below), regarding a change in
entity:

a. Financial statements for prior periods included for comparative purposes shall be presented as previously
reported.
b. The cumulative effect of changing to a new accounting principle on the amount of retained earnings at
the beginning of the period in which the change is made shall be included in net income of the period of
the change
c. The effect of adopting the new accounting principle on income before extraordinary items and on net
income (and on the related per share amounts) of the period of the change shall be disclosed.
d. Income before extraordinary items and net income computed on a pro forma basis shall be shown on the
face of the income statements for all periods presented as if the newly adopted accounting principle had
been applied during all periods affected

Thus, income before extraordinary items and net income (exclusive of the cumulative adjustment) for the
period of the change shall be reported on the basis of the newly adopted accounting principle.

As mentioned above, certain changes in the accounting policies are such that the advantages of the retroactive
treatment in prior period reports outweighs the disadvantages. Accordingly, for those few changes the
financial statements of all prior periods presented shall be restated. The changes that shall be accorded that
treatment are:

a. a change from the LIFO method of inventory policy to another policy.

b. a change in the method of accounting for long term construction type contracts, and,
c. a change from the retirement - replacement - betterment accounting to depreciation accounting.

The nature of and justification for a change in accounting principle along with the effect of the change on
income before extraordinary items, net income and the earning per share amounts shall be disclosed for all
periods presented. That the disclosure may be on the face of the income statement or in the notes. Financial
statements of the subsequent periods need not repeat the disclosure.

1e page 26
Typical US GAAP issues

Changes in estimates used in accounting are necessary consequences of periodic presentations of financial
statements. Preparing financial statements requires estimating the effects of future events. Examples of items
for which estimates are necessary are uncollectible receivables, inventory obsolescence, service lives and
salvage values of depreciable assets, warranty costs, periods benefited by a deferred cost, and recoverable
mineral reserves. Future events and their effects cannot be perceived with certainty; estimating, therefore,
requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more
experience is acquired, or as additional information is obtained. The effect of a change in accounting estimate
shall be accounted for in (a) the period of change if the change affects that period only or (b) the period of
change and future periods if the change affects both. A change in an estimate shall not be accounted for by
restating amounts reported in financial statements of prior periods or by reporting pro forma amounts for prior
periods.

Whilst under both the frameworks the accounting for changes is to be done in the year of change, US GAAP
has some exceptions and permits for disclosing such changes as changes in the opening retained earnings.
Further, the prior period error corrections are disclosed separately in the current statement of profit and loss
under the Indian GAAP, whereas under the US GAAP, prior period error corrections are excluded from the
current statements of profit and loss account and reflected as adjustments to the opening balance of retained
earnings in single period statements

1e page 27
Typical US GAAP issues

Revenue Recognition

Indian Position

Revenue from sales or service transactions should be recognised when the requirements as to performance set
are satisfied, provided that at the time of performance it is not unreasonable to expect ultimate collection. If at
the time of raising of any claim it is unreasonable to expect ultimate collection, revenue recognition should be
postponed.

In a transaction involving the sale of goods, performance should be regarded as being achieved when the
following conditions have been fulfilled:

(i) the seller of goods has transferred to the buyer the property in the goods for a price or all significant
risks and rewards of ownership have been transferred to the buyer and the seller retains no effective
control of the goods transferred to a degree usually associated with ownership; and
(ii) no significant uncertainty exists regarding the amount of the consideration that will be derived from
the sale of the goods.

In a transaction involving the rendering of services, performance should be measured either under the
completed service contract method or under the proportionate completion method, whichever relates the
revenue to the work accomplished. Such performance should be regarded as being achieved when no
significant uncertainty exists regarding the amount of the consideration that will be derived from rendering the
service.

Revenue arising from the use by others of enterprise resources yielding interest, royalties and dividends
should only be recognised when no significant uncertainty as to measurability or collectability exists. These
revenues are recognised on the following bases:
(i) Interest : on a time proportion basis taking into account the amount outstanding and the rate
applicable.
(ii) Royalties: on an accrual basis in accordance with the terms of the relevant agreement.
(iii) Dividends from investments in shares: when the owner's right to receive payment is established.

US. Position

Profit ordinarily shall be recognized at the time a sale in the ordinary course of business is effected.
Accordingly, revenues ordinarily shall be recognized at the time a transaction is completed, with appropriate
provision for uncollectible accounts.

Revenue from the sale of separately priced extended warranty and product maintenance contracts should be
deferred and generally recognized in income on a straight-line basis. Costs that are directly related to the
acquisition of those contracts are deferred and charged to expense in proportion to the revenue recognized.
All other costs are charged to expense as incurred.

Revenue from sales transactions in which the buyer has a right to return the product shall be recognized at
time of sale only if the following conditions are met.

a. The seller's price to the buyer is substantially fixed or determinable at the date of sale.
b. The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not
contingent on resale of the product.
c. The buyer's obligation to the seller would not be changed in the event of theft or physical destruction
or damage of the product.
d. The buyer acquiring the product for resale has economic substance apart from that provided by the
seller.
e. The seller does not have significant obligations for future performance to directly bring about resale
of the product by the buyer.
f. The amount of future returns can be reasonably estimated

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Typical US GAAP issues

Sales revenue and cost of sales that are not recognized at time of sale because the foregoing conditions are not
met shall be recognized either when the return privilege has substantially expired or if those conditions
subsequently are met, whichever occurs first.

If sales revenue is recognized because the conditions above are met, any costs or losses that may be expected
in connection with any returns shall be accrued in accordance with "Contingencies." Sales revenue and cost
of sales reported in the income statement shall be reduced to reflect estimated returns.

In addition to above there are other pronouncements covering specifically the following:

〉 Software Revenue Recognition

〉 Revenue Recognition on Options to Purchase Stock of Another Entity
〉 Distribution Fees by Distributors of Mutual Funds That Do Not Have a Front-End Sales Charge
〉 Revenue Recognition by Television 'Barter' Syndicators
〉 Revenue Recognition of Long-Term Power Sales Contracts
〉 Revenue and Expense Recognition for Freight Services in Process
〉 Revenue Recognition on Sales with a Guaranteed Minimum Resale Value
〉 Revenue Recognition on Equipment Sold and Subsequently Repurchased Subject to an Operating Lease
〉 Revenue Recognition under Long-Term Power Sales Contracts That Contain both Fixed and Variable
Pricing Terms”]

In essence, the basic principles of Revenue Recognition are similar under the two frameworks. However, US
GAAP has elaborate guidance under Revenue Recognition

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Typical US GAAP issues

Accounting for the Effects of Changes in Foreign Exchange Rates

Indian Position

Exchange differences arising on foreign currency transactions should be recognised as income or as expense
in the period in which they arise, except that the exchange differences arising on repayment of liabilities
incurred for the purpose of acquiring fixed assets, which are carried in terms of historical cost, should be
adjusted in the carrying amount of the respective fixed assets. The carrying amount of such fixed assets
should, to the extent not already so adjusted or otherwise accounted for, also be adjusted to account for any
increase or decrease in the liability of the enterprise, as expressed in the reporting currency by applying the
closing rate, for making payment towards the whole or a part of the cost of the assets or for repayment of the
whole or a part of the monies borrowed by the enterprise from any person, directly or indirectly, in foreign
currency specifically for the purpose of acquiring those assets.

The carrying amount of fixed assets which are carried in terms of revalued amounts should also be adjusted in
the manner described above. However, such adjustment should not result in the net book value of a class of
revalued fixed assets exceeding the recoverable amount of assets of that class, the remaining amount of the
increase in liability, if any, being debited to the revaluation reserve, or to the profit and loss statement in the
event of inadequacy or absence of the revaluation reserve.

The difference between the forward rate and the exchange rate at date of the transaction should be recognised
as income or expense over the life of the contract, except in respect of liabilities incurred for acquiring fixed
assets, in which case, such difference should be adjusted in the carrying amount of the respective fixed assets.

The difference between the forward rate and the exchange rate at the inception of a forward exchange contract
is recognised as income or expense over the life of the contract. The only exception is in respect of forward
exchange contracts related to liabilities in foreign currency incurred for acquisition of fixed assets.

Any profit or loss arising on cancellation or renewal of a forward exchange contract should be recognised as
income or as expense for the period, except in case of a forward exchange contract relating to liabilities
incurred for acquiring fixed assets, in which case, such profit or loss should be adjusted in the carrying
amount of the respective fixed assets.

US. Position

Foreign currency transactions are transactions denominated in a currency other than the entity's functional
currency. Foreign currency transactions may produce receivables or payables that are fixed in terms of the
amount of foreign currency that will be received or paid. A change in exchange rates between the functional
currency and the currency in which a transaction is denominated increases or decreases the expected amount
of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected
functional currency cash flows is a foreign currency transaction gain or loss that generally shall be included in
determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or
loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later)
realized upon settlement of a foreign currency transaction generally shall be included in determining net
income for the period in which the transaction is settled. The exceptions to this requirement for inclusion in
net income of transaction gains and losses are (a) Foreign currency transactions that are designated as, and are
effective as, economic hedges of a net investment in a foreign entity, (b) Intercompany foreign currency
transactions that are of a long-term-investment nature (that is, settlement is not planned or anticipated in the
foreseeable future), when the entities to the transaction are consolidated, combined, or accounted for by the
equity method in the reporting enterprise's financial statements

The accounting for a gain or loss on a foreign currency transaction that is intended to hedge an identifiable
foreign currency commitment is addressed by the Statement on Derivatives, FAS - 133.

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Typical US GAAP issues

Whilst the Indian Accounting Standards requires that the exchange differences on repayment/restatement of
liabilities incurred for the purpose of acquiring fixed assets, which are carried in terms of historical cost,
should be adjusted in the carrying amount of the respective fixed assets, US GAAP requires that all the
exchange difference be charged to expense. Institute of Chartered Accountants of India has recently
introduced revised Accounting Standard 11 on Accounting for the effects of changes in Foreign Exchange
Rates, which is applicable from accounting periods commencing on or after April 1,2004. The key difference
from the earlier AS11 is that the revised AS11requires exchange differences on repayment/restatement of
liabilities incurred for the purpose of acquiring fixed assets, which are carried in terms of historical cost to be
charged to revenue. Further, the revised standard also discussed the accounting treatment of foreign
subsidiaries.

Under the Indian GAAP, there is specific guidance on accounting for exchange differences on forward
contract, however US GAAP classifies a forward cover as hedge under FAS 133 and requires to disclose the
same on the fair value.

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Typical US GAAP issues

Accounting for Investments

Indian Position

An enterprise should disclose current investments and long-term investments distinctly in its financial
statements. Further classification of current and long-term investments should be as specified in the statute
governing the enterprise. In the absence of a statutory requirement, such further classification should disclose,
where applicable, investments in:

(a) Government or Trust securities

(b) Shares, debentures or bonds
(c) Investment properties
(d) Others—specifying nature.

The cost of an investment should include acquisition charges such as brokerage, fees and duties. If an
investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost should
be the fair value of the securities issued (which in appropriate cases may be indicated by the issue price as
determined by statutory authorities). The fair value may not necessarily be equal to the nominal or par value
of the securities issued. If an investment is acquired in exchange for another asset, the acquisition cost of the
investment should be determined by reference to the fair value of the asset given up. Alternatively, the
acquisition cost of the investment may be determined with reference to the fair value of the investment
acquired if it is more clearly evident.

An enterprise holding investment properties should account for them as long-term investments.

Investments classified as current investments should be carried in the financial statements at the lower of cost
and fair value determined either on an individual investment basis or by category of investment, but not on an
overall (or global) basis.

Investments classified as long-term investments should be carried in the financial statements at cost. However,
provision for diminution shall be made to recognise a decline, other than temporary, in the value of the
investments, such reduction being determined and made for each investment individually.

Any reduction in the carrying amount and any reversals of such reductions should be charged or credited to
the profit and loss statement.

US. Position

US GAAP addresses the accounting and reporting for investments in equity securities that have readily
determinable fair values and for all investments in debt securities. Those investments are to be classified in
three categories and accounted for as follows:

〉 Debt securities that the enterprise has the positive intent and ability to hold to maturity are classified as
held-to-maturity securities and reported at amortized cost.
〉 Debt and equity securities that are bought and held principally for the purpose of selling them in the near
term are classified as trading securities and reported at fair value, with unrealized gains and losses
included in earnings.
〉 Debt and equity securities not classified as either held-to-maturity securities or trading securities are
classified as available-for-sale securities and reported at fair value, with unrealized gains and losses
excluded from earnings and reported in other comprehensive income.

At acquisition, an enterprise shall classify debt and equity securities into one of three categories: held-to-
maturity, available-for-sale, or trading. At each reporting date, the appropriateness of the classification shall
be reassessed.

Investments in debt securities shall be classified as held-to-maturity and measured at amortized cost in the
statement of financial position only if the reporting enterprise has the positive intent and ability to hold those
securities to maturity. A security may not be classified as held-to-maturity if that security can contractually be
prepaid or otherwise settled in such a way that the holder of the security would not recover substantially all of

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Typical US GAAP issues

its recorded investment. A debt security with those characteristics should be classified in one of the following
categories and measured at fair value in the statement of financial position:

a. Trading securities. Securities that are bought and held principally for the purpose of selling them in
the near term (thus held for only a short period of time) shall be classified as trading securities.
Trading generally reflects active and frequent buying and selling, and trading securities are generally
used with the objective of generating profits on short-term differences in price.
b. Available-for-sale securities. Investments not classified as trading securities (nor as held-to-maturity
securities) shall be classified as available-for-sale securities.

Unrealized holding gains and losses for trading securities shall be included in earnings. Unrealized holding
gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded
from earnings and reported in other comprehensive income until realized except as indicated in the following
sentence. All or a portion of the unrealized holding gain and loss of an available-for-sale security that is
designated as being hedged in a fair value hedge shall be recognized in earnings during the period of the
hedge, pursuant to FAS133.

Dividend and interest income, including amortization of the premium and discount arising at acquisition, for
all three categories of investments in securities shall continue to be included in earnings.

Whilst the Indian GAAP defines and mentions the accounting principles for short term and long-term
investments, US GAAP envisages debt securities, trading securities and available-for-sale securities.

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Typical US GAAP issues

Accounting for Amalgamations /Business Combination

Basic Principles

US Position: The accounting for a business combination follows the concepts normally applicable to the
initial recognition and measurement of assets acquired, liabilities assumed or incurred, and equity shares
issued, as well as to the subsequent accounting for those items.

Indian Position: Similar to US. Combinations are referred to as Amalgamation under the Indian framework.

Types of Combinations

US Position: A business combination occurs when an entity acquires net assets that constitute a business or
acquires equity interests of one or more other entities and obtains control over that entity or entities. It
excludes transactions in which control is obtained through means other than an acquisition of net assets or
equity interests. The provisions of the standard on business combination apply equally to a business
combination in which (a) one or more entities are merged or become subsidiaries, (b) one entity transfers net
assets or its owners transfer their equity interests to another, or (c) all entities transfer net assets or the owners
of those entities transfer their equity interests to a newly formed entity (some of which are referred to as roll-
up or put-together transactions). All those transactions are business combinations regardless of whether the
form of consideration given is cash, other assets, a business or a subsidiary of the entity, debt, common or
preferred shares or other equity interests, or a combination of those forms and regardless of whether the
former owners of one of the combining entities as a group retain or receive a majority of the voting rights of
the combined entity.

Indian Position: Generally, amalgamations fall into two broad categories. In the first category are those
amalgamations where there is a genuine pooling not merely of the assets and liabilities of the amalgamating
companies but also of the shareholders' interests and of the businesses of these companies. Such
amalgamations are amalgamations which are in the nature of 'merger' and the accounting treatment of such
amalgamations should ensure that the resultant figures of assets, liabilities, capital and reserves more or less
represent the sum of the relevant figures of the amalgamating companies. In the second category are those
amalgamations which are in effect a mode by which one company acquires another company and, as a
consequence, the shareholders of the company which is acquired normally do not continue to have a
proportionate share in the equity of the combined company, or the business of the company which is acquired
is not intended to be continued. Such amalgamations are amalgamations in the nature of 'purchase'.

Method of Accounting

US Position: All combinations are accounted applying the Purchase Method, whereby the consideration paid
by the acquiring entity as well as the assets acquired and liabilities assumed are considered at fair value. The
difference between the consideration paid and assets acquired/liabilities assumed result in either Goodwill or
an excess of assets acquired/ liabilities assumed over consideration paid
Indian Position: Amalgamations in the nature of merger are accounted for by applying Pooling of Interest
method, whereby the assets, liabilities and reserves of the transferor company are recorded by the transferee
company at their existing carrying amounts after making the adjustments, if any for conflicting accounting
policies.
All other amalgamations are accounted for applying the Purchase Method, which is similar to US position.

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Typical US GAAP issues

Treatment of Goodwill/ Negative Goodwill

US Position:

Goodwill once recognized is tested for impairment every year and impairment loss is provided for.

That excess of fair value of net assets acquired over the consideration paid (Negative Goodwill) is allocated as
a pro rata reduction of the amounts that otherwise would have been assigned to all of the acquired assets
except (a) financial assets other than investments accounted for by the equity method, (b) assets to be disposed
of by sale, (c) deferred tax assets, (d) prepaid assets relating to pension or other postretirement benefit plans,
and (e) any other current assets. If any excess remains after reducing to zero the amounts that otherwise would
have been assigned to those assets, that remaining excess shall be recognized as an extraordinary gain.

Indian Position:
Goodwill is amortized over a period not exceeding five years unless a somewhat longer period can be
justified.
While there is no specific guidance for Negative Goodwill or Capital Reserve, there is no practice in India to
reduce the fair values of assets acquired.

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Typical US GAAP issues

Accounting for Retirement Benefits in the Financial Statements of Employers

Indian Position

The Indian Standard (AS-15) requires defined contribution plan wherein contribution is expensed off as
accrual. Expensing the cost of defined benefit plans requires an actuarial assessment. However, the standard
has no specific requirements for actuarial computations.

U.S. Position

FAS 87 requires a particular actuarial approach to be used for measuring pension cost, the projected unit
credit method, and generally prescribes tightly drawn rules as to the computation of pension figures in the
accounts.

Whilst the Indian Standard allows a considerable flexibility, the FASB’s requirements are much more tightly
defined- the prescription of a specific actuarial method for measurement of cost, the requirement to use an
insurance interest rate for valuing pension obligations and the use of current fair value for valuing pension
fund assets can, conjunctively , give rise to potentially material differences.

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Typical US GAAP issues

Accounting for Borrowing Costs

Indian Position

Borrowing costs are interest and other costs incurred by an enterprise in connection with the borrowing of
funds. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its
intended use or sale. Borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset should be capitalised as part of the cost of that asset. The amount of
borrowing costs eligible for capitalisation should be determined in accordance with this Statement. Other
borrowing costs should be recognised as an expense in the period in which they are incurred.

Borrowing costs are capitalised as part of the cost of a qualifying asset when it is probable that they will result
in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are
recognised as an expense in the period in which they are incurred.

To the extent that funds are borrowed specifically for the purpose of obtaining a qualifying asset, the amount
of borrowing costs eligible for capitalisation on that asset should be determined as the actual borrowing costs
incurred on that borrowing during the period less any income on the temporary investment of those
borrowings.

To the extent that funds are borrowed generally and used for the purpose of obtaining a qualifying asset, the
amount of borrowing costs eligible for capitalisation should be determined by applying a capitalisation rate to
the expenditure on that asset. The capitalisation rate should be the weighted average of the borrowing costs
applicable to the borrowings of the enterprise that are outstanding during the period, other than borrowings
made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs capitalised
during a period should not exceed the amount of borrowing costs incurred during that period.

The capitalisation of borrowing costs as part of the cost of a qualifying asset should commence when all the
following conditions are satisfied:

(a) expenditure for the acquisition, construction or production of a qualifying asset is being
incurred;
(b) borrowing costs are being incurred; and
(c) activities that are necessary to prepare the asset for its intended use or sale are in progress.

Expenditure on a qualifying asset includes only such expenditure that has resulted in payments of cash,
transfers of other assets or the assumption of interest-bearing liabilities. Expenditure is reduced by any
progress payments received and grants received in connection with the asset. The average carrying amount of
the asset during a period, including borrowing costs previously capitalised,is normally a reasonable
approximation of the expenditure to which the capitalisation rate is applied in that period.

US. Position

Interest cost shall be capitalized as part of the historical cost of acquiring certain assets. To qualify for
interest capitalization, assets must require a period of time to get them ready for their intended use. Examples
are assets that an enterprise constructs for its own use (such as facilities) and assets intended for sale or lease
that are constructed as discrete projects (such as ships or real estate projects). Interest capitalization is
required for those assets if its effect, compared with the effect of expensing interest, is material. If the net
effect is not material, interest capitalization is not required. However, interest cannot be capitalized for
inventories that are routinely manufactured or otherwise produced in large quantities on a repetitive basis, or
on qualifying assets acquired using gifts or grants that are restricted by the donor or grantor to acquisition of
those assets to the extent that funds are available from such gifts or grants.

In situations involving qualifying assets financed with the proceeds of restricted tax-exempt borrowings, the
amount of interest cost to be capitalized shall be all interest cost of those borrowings less any interest earned
on temporary investment of the proceeds of those borrowings from the date of borrowing until the specified
qualifying assets acquired with those borrowings are ready for their intended use.

In all other situations, the interest cost eligible for capitalization shall be the interest cost recognized on
borrowings and other obligations. The amount capitalized is to be an allocation of the interest cost incurred

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Typical US GAAP issues

during the period required to complete the asset. The interest rate for capitalization purposes is to be based on
the rates of the enterprise's outstanding borrowings. If the enterprise associates a specific new borrowing with
the asset, it may apply the rate on that borrowing to the appropriate portion of the expenditures for the asset.
A weighted average of the rates on other borrowings is to be applied to expenditures not covered by specific
new borrowings. Judgment is required in identifying the borrowings on which the average rate is based.

The Indian policy is in line with FAS 34 and requires capitalisation of interest on borrowings invested in
assets under construction during the period that they are in that state.

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Form and Contents of Financial Statements

Whilst the Schedule VI of the Companies Act,1956 and the Accounting Standards issued by the Institute of
chartered Accountants of India lay down the principles of the form and content of the financial statements,
under the US GAAP the form and content is usually governed by the requirements of the various
pronouncements. Following is the generic requirement of US GAAP for the form and content of the financial
statements.

FORM OF BALANCE SHEET

The use of terms balance sheet, statement of financial position, or statement of financial condition denotes the
use of generally accepted accounting principles. If some other comprehensive basis of accounting, such as
Income Tax or cash, is used, the title of financial statement must be adjusted to reflect this variation.

Classification Of Assets

Assets, liabilities, and stockholders' equity are separated in the balance sheet so that important relationships
can be shown and attention can be focused on significant subtotals.

A. Current Assets.

Per ARB 43, Chapter 3, current assets are cash and other assets or resources commonly identified as those
which are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle
of the business. When the cycle is less than 1 year, the 1-year concept is traditionally adopted However, when
the operating cycle exceeds 1 year, the operating cycle will serve a the proper measurement period for
purposes of current asset classification. When the cycle is very long, the usefulness of the concept of current
assets diminishes The following items would be classified as current assets:

1. Cash and cash equivalents include cash on hand consisting of coins, currency, undeposited checks; money
orders and drafts; and deposits in banks. Anything accepted by a bank for deposit would be considered as
cash. Cash must be available for a demand withdrawal. Assets such as certificates of deposit would not be
considered cash because of the time restrictions on withdrawal. Also, cash must be available for current
use in order to be classified as a current asset. Cash which is restricted in use and whose restrictions will
not expire within the operating cycle or cash restricted for noncurrent use would not be included in
current assets. Per SFAS 95, cash equivalents include short-term, highly liquid investments that (1) are
readily convertible to known amounts of cash and (2) are so near their maturity (maturities of 3 months or
less from the date of purchase by the enterprise) that they present negligible risk of changes in value
because of changes in interest rates. Treasury bills, commercial paper, and money market fund are all
examples of cash equivalents.

2. Short-term investments are readily marketable securities acquired through the use of temporarily idle
cash. These securities are accounted for under SFAS 115. Under SFAS 115, the basis of reporting of
these items need no be reported on the face of the balance sheet provided the different reporting
classifications are reconciled in the notes. The balance sheet presentation would be as follows:

Marketable securities $xxx

3. Receivables include accounts and notes receivable, receivables from affiliate companies, and officer and
employee receivables. The term "accounts receivable" represents amounts due from customers arising
from transactions in the ordinary course of business. Allowances due to uncollectibility and any amounts
discounted or pledged should be clearly stated. The allowances may be based upon a relationship to sales
or based upon direct analysis of the receivables. If material, the receivables should be broken down into
their component parts. The receivables section may be presented as follows:

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Form and Contents of Financial Statements

Receivables:
Accounts
Notes

Less allowance for doubtful accounts

Affiliate companies
Officers and employees

4. Inventories are goods on hand and available for sale. The basis of valuation and the method of pricing
should be disclosed.

Inventories--at the lower of cost or market

(specific identification) $xxx

In the case of a manufacturing concern, raw materials, work in process, and finished goods should be
disclosed separately on the balance sheet or in the footnotes.

Inventories:
Finished goods
Work in process
Raw materials

5. Prepaid expenses are assets created by the prepayment of cash or incurrence of a liability. They expire
and become expenses with the passage of time, usage or events (e.g., prepaid rent, prepaid insurance, and
deferred taxes).

B. Long-term investments.

Investments that are intended to be held for an extended period of time (longer than one operating cycle)
would be classified as available-for-sale or held-to-maturity investments under SFAS 115. The following are
the three major types of long-term investments:

1. Debt and equity securities are stocks, bonds, and long-term notes. Under SFAS 115, the basis of
reporting of these items is not reported on the face of the balance sheet but should be reported in the
notes.

Long-term investments:
Investments in A company stock
Notes receivable
Less discount on notes receivable
Investment in B company bonds

2. Tangible assets not currently used in operations.

3. Investments held in special funds (e.g., sinking funds, pension funds amounts held for plant expansion,
and cash surrender values of life insurance policies).

C. Property, plant, and equipment.

Assets of a durable nature that are to be use in the production or sale of goods, sale of other assets, or
rendering of service rather than being held for sale (e.g., machinery and equipment, buildings, furniture and
fixtures, natural resources, and land). These should be disclosed with relate accumulated
depreciation/depletion as follows:

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Form and Contents of Financial Statements

Machinery and equipment

Less accumulated depreciation
or
Machinery and equipment
(net of $xxx
accumulated depreciation)

Accumulated depreciation may be shown in total or by major classes of depreciable assets. In addition to
showing this amount on the balance sheet, the notes to the financial statements should contain balances of
major classes of depreciable assets, by nature or function, at the balance sheet date and a general description
of the method or methods used in computing depreciation with respect to major classes o depreciable assets
(APB 12, para 5).

D. Intangible assets.

Noncurrent, nonmaterialistic assets of a business, the possession of which provides anticipative benefits to the
owner (e.g., goodwill, trademarks, patents, copyrights, organizational costs, etc.). Generally, the amortization
of an intangible asset is credited directly to the asset account, although it is acceptable to use an accumulated
amortization account.
E. Other assets.

An all-inclusive heading for accounts that do not fit neatly into any of the other asset categories (e.g., long-
term prepaid expenses, deferred taxes, bond issue costs, noncurrent receivables, and restricted cash).

Classification Of Liabilities

The liabilities are displayed on the balance sheet in the order of payment.

A. Current liabilities.

Per ARB 43, Chapter 3, obligations whose liquidation is reasonably expected to require the use of existing
resources properly classifiable as current assets, or the creation of current obligations. Obligations that are
due on demand or which are callable at any time by the lender are classified as current regardless of the intent
of the entity or lender.

1. Obligations arising from the acquisition of goods and services entering the operating cycle (e.g., accounts
payable, short-term notes payable, wages payable, taxes payable, and other miscellaneous payables).

2. Collections of money in advance for the future delivery of goods or performance of services, such as rent
received in advance and unearned subscription revenues.

3. Other obligations maturing within the current operating cycle to be met through the use of current assets,
such as the current maturity of bonds, and long-term notes.

In two cases, obligations to be paid in the next period should not be classified as current liabilities. Debt
expected to be refinanced through another long-term issue and debt that will be retired through the use of
noncurrent assets, such as a bond sinking fund, are treated as noncurrent liabilities because the liquidation
does not require the use of current assets or the creation of other current liabilities.

The distinction between current and noncurrent liquid assets and liabilities generally rests upon both the
ability of the entity and the intent of the entity to liquidate or not to liquidate within the traditional 1-year
concept.

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Form and Contents of Financial Statements

B. Noncurrent liabilities.

Obligations that are not expected to be liquidated within the current operating cycle.

1. Obligations arising through the acquisition of assets, such as the issuance of lasses of bonds, long-term
notes, and lease obligations.
2. Obligations arising out of the normal course of operations, such as pension obligations.
3. Contingent obligations involving uncertainty as to. possible losses. These are resolved by the occurrence
or nonoccurrence of one or more future events that confirm the amount payable, the payee, and/or the
date payable, such as product warranties

On all long-term liabilities the maturity date, nature of obligation, rate of interest, and any security pledged to
support the agreement should be clearly shown. Also, on bonds and long-term notes, any premium or discount
should be reported separately as an addition to or subtraction from the bond or note. Long-term obligations
where certain covenants exist are classified as current liabilities if any of those covenants have been violated
and the lender has the right to demand payment. Unless the lender expressly waives that right or the
conditions causing the default are corrected, the obligation is current.

C. Other liabilities.

Items that do not meet the definition of a liability, such as deferred income taxes or deferred investment tax
credits. Many times these items will be included in current or noncurrent liabilities even though they
technically are not similar.

A. Offsetting

Offsetting assets and liabilities. In general, assets and liabilities are not offset against each other. The
reduction of accounts receivable by the allowance for doubtful accounts or property, plant, and equipment by
the accumulated depreciation are acts which reduce these assets by the appropriate valuation accounts. The
right of setoff must exist for the offsetting in the financial statements to be a proper presentation. This right
of setoff exists only when all the following conditions are met:

1. Each of the two parties owes the other determinable amounts (although they may be in different
currencies and bear different rates of interest).
2. The entity has the right to setoff against the amount owed by the other party.
3. The entity intends to offset.
4. The right of setoff is legally enforceable.

In particular cases, state laws or bankruptcy laws may impose restrictions o prohibitions against the right of
setoff. Furthermore, when maturities differ, only the party with the nearest maturity can offset because the
party with the longer maturity must settle in the manner determined by the earlier maturity party.

The offsetting of cash or other assets against a tax liability or other amounts due to governmental bodies is
also not acceptable except under limited circumstances The only exception is when it is clear that the
purchase of securities is in substance an advance payment of taxes payable in the near future and that the
securities are acceptable for the payment of taxes. Primarily this occurs as an accommodation t governmental
bodies.

For forwards, interest rate swaps, currency swaps, options, and other conditional or exchange contracts, the
conditions for the right of offset must exist or the fair value of contracts in a loss position cannot be offset
against the fair value o contracts in a gain position. Neither can accrued receivable amounts be offs against
accrued payable amounts. If, however, there is a master netting arrangement, then fair value amounts
recognized for forwards, interest or currency swap options, or other such contracts may be offset without
respect to the condition previously specified.

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Form and Contents of Financial Statements

E. Classification of Stockholders' Equity

Stockholders' equity is the interest of the stockholders in the assets of a corporation. It shows the cumulative
net results of past transactions and other events.
Capital stock.

Stock which consists of the par/stated value of preferred common shares. The number of shares authorized,
the number issued, and number outstanding should be clearly shown. For preferred stock, the preference and
features must also be stated as follows:

6% cumulative preferred stock, $100 par value, callable at $115,

10,000 shares authorized and outstanding $xxx
Common stock, $10 par value per share, 2,000,000 shares authorized,
1,500,000 shares issued and outstanding $xxx

Preferred stock which is redeemable at the option of the holder is not considered to be part of equity, but is
usually shown in a separate caption between liabilities and equity.

Additional paid-in capital.

There are two major categories of additional paid-in capital.

1. Paid-in capital in excess of par/stated value which is the difference between the actual issue price and
par/stated value. Amounts in excess should be disclosed separately for common stock and each issue of
preferred stock as follows:

Additional paid-in capital--6% preferred stock

Additional paid-in capital--common stock

2. Paid-in capital from other transactions which includes treasury stock, retirement of stock, stock dividends
recorded at market, lapse of stock purchase warrants, conversion of convertible bonds in excess of the par
value of the stock, and any other additional capital from the company's own stock transactions.

F. Donated capital.

Donations of a. noncash variety from either stockholders or outside parties, such as land securities, buildings,
and equipment.

G. Retained earnings.

Accumulated earnings not distributed to the shareholders.

1. Appropriated, a certain amount of retained earnings that are not to be

distributed to stockholders as dividends.
2. Unappropriated, earnings available to be distributed as dividends.

A balance sheet disclosure should reveal the pertinent provisions, source of restriction, amount subject to
restriction, and restrictions on other items, such as working capital and additional borrowings. If a company
appropriated retained earnings to satisfy bond indebtedness, the presentation would be as follows:

Retained earnings:

Appropriated for bond indebtedness $xxx

Free and unappropriated $xxx
Many corporations do not record the restrictions in appropriated and unappropriated accounts but merely
explain the restrictions in the footnotes because financial statement users often believe the appropriation is
held as cash. Also included in the equity section of the balance sheet is treasury stock representing issued

1e page 43
Form and Contents of Financial Statements

shares reacquired by the issuer. These are generally stated at their cost of acquisition and as a reduction of
shareholders' equity.
8. Accumulated other comprehensive income

Its components including net unrealized holding gains and losses on investments classified as available-for-
sale securities (SFAS 115), the excess of minimum pension liability over unrecognized prior service cost, and
unrealized gains (losses) on foreign currency translations shall be shown either in the statement of changes in
stockholders' equity or in the stockholders' equity section

Stockholders' equity
Common stock
Paid in capital
Retained earnings
Accumulated other comprehensive income
Foreign currency translation adjustments
Pension liability adjustment
Unrealized gains on securities
Total stockholders' equity

Accounting policies.
There are many different methods of valuing assets assigning costs. Financial statement users must be aware
of the accounting policies used by enterprises so that sound economic decisions can be made. Per APB 22,
disclosures should identify and describe the accounting principles followed by entity and methods of applying
those principles that materially affect the deter nation of financial position, changes in cash flows, or results of
operations. accounting policies should encompass those accounting principles and methods involve the
following:

1. Selection from acceptable alternatives

2. Principles and methods peculiar to the industry
3. Unique applications of GAAP

Related parties.

According to SFAS 57, Related Party Disclosures, financial statements should include disclosure of material
related party transactions other than compensation arrangements, expense allowances, or other similar items
in the ordinary course of business. A related party is essentially any party that controls or can significantly
influence the management or operating policies of the company to the extent that the company may be
prevented from fully pursuing its own interests. Such groups would include affiliates, investees accounted for
by the equity method, trusts for the benefit of employees, principal owners, management, and immediate
family members of owners or management.

Disclosures should take place even if there is no accounting recognition made for such transactions (e.g., a
service is performed without payment). Disclosures should generally not imply that such related party
transactions were on terms essentially equivalent to arm's-length dealings. Additionally, when one or more
companies are under common control such that the financial statements might vary from those that would
have been obtained if the companies were autonomous, the nature of the control relationship should be
disclosed even if there are no transactions between the companies.

The disclosures generally should include

1. Nature of relationship.
2. Description of transactions and effects of such transactions on the financial statements for each period for
which an income statement is presented.
3. Dollar amount of transactions for each period for which an income statement is presented and effects of
any change in establishing the terms of such transactions differently than that used in prior periods.
4. Amounts due to and from such related parties as of the date of each balance sheet presented together with
the terms and manner of settlement.

Comparative statements.

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Form and Contents of Financial Statements

In order to increase the usefulness of financial statements, many companies include in their annual reports 5
or 10-year summaries of condensed financial information. These comparative statements allow investment
analysts and other interested readers to perform comparative analysis of pertinent information. ARB 43,
Chapter 2 states the presentation of comparative financial statements in annual reports enhances the usefulness
of such reports and brings out more clearly the nature and trends of current changes affecting the enterprise.
Such presentation emphasizes the fact that the statements for a series of periods are far more significant than
those for a single period and that the accounts for one period are but an installment of what is essentially a
continuous history.

Subsequent events.

The balance sheet is dated as of the last day of the fiscal period, but a period of time may elapse before the
financial statements are issued. During this period, significant events or transactions may have occurred that
materially affect the company's financial position. These events and transactions are called subsequent
events. Significant events occurring between the balance sheet date and issue date could make the financial
statements misleading if not disclosed.

There are two types of subsequent events (SAS 1, Subsequent Events). The first type consists of those events
that provide additional evidence with respect the conditions that existed at the date of the balance sheet and
affect the estimates inherent in the process of preparing financial statements. The second type consists o those
events that provide evidence with respect to conditions that did not exist at the date of the balance sheet being
reported on but arose subsequent to that date. Th first type results in adjustments of the financial statements.
The second type dose not require adjustment of the financial statements but may require disclosure in order to
keep the financial statements from being misleading. Disclosure can be made in the form of footnotes,
supporting schedules, and pro forma statements.

Contingencies.

A contingency is defined in SFAS 5 as an existing condition, situation, or set of circumstances involving

uncertainty as to possible gain or loss to an enterprise that will ultimately be resolved when one or more future
events occur or fail to occur. Resolution of the uncertainty may confirm the acquisition of an asset, the
reduction of a liability, the loss or impairment of an asset, or the incurrence of a liability.
An estimated loss from a loss contingency shall be accrued by a charge to income and the recording of a
liability if both of the following conditions are met (SFAS 5, para 8):

1. Information available prior to issuance of the financial statements indicates that it is probable that an
asset had been impaired or a liability had been incurred at the date of the financial statements.
2. The amount of loss can be reasonably estimated.

The likelihood of a loss on a contingency may be broken down into the following three classifications (SFAS
5, para 3):

a. Probable, the future event or events are likely to occur.

b. Reasonably possible, the chance of the future event or events occurring is more than remote but less than
likely.
c. Remote, the chance of the future event or events occurring is slight.

If the loss contingency is probable but only a range of estimated values can be made, the minimum point of
the range should be accrued and the maximum point should be disclosed. If the loss contingency is at least
reasonably possible, a liability should not be recorded but disclosure is required. If feasible, that disclosure
should include an estimate of the loss or range of loss. If a reasonable estimate of the loss cannot be made,
that fact should be disclosed.

An estimated gain from a gain contingency usually is not reflected in the ac counts since to do so might be to
recognize revenue prior to its realization. Adequate disclosure of the gain contingency shall be made, but care
must be taken t avoid misleading implications as to the likelihood of realization.

Contracts and negotiations.

1e page 45
Form and Contents of Financial Statements

All significant contractual agreements and negotiations should be disclosed in the footnotes to the financial
statements. For example, lease contract provisions, pension obligations, requirements contracts, bon
indenture covenants, and stock option plans should be clearly disclosed in the footnotes.

Risks and Uncertainties

AICPA Statement of Position 94-6 Disclosure of Certain Significant Risks an Uncertainties requires disclosure
in financial statements about the risks and uncertainties existing as of the date of those statements. The four
areas of disclosure are
1. Nature of operations

a. Major products/services and principal markets served

b. Industries operating within and relative importance of each industry including basis of
determination (assets, revenue or earnings).

NOTE: Quantification not required and words such as predominantly, equal major, or
other may be used.

2. Use of estimates in preparation of financial statements

a. This fact must be disclosed as an explanation that management must use estimates
b. Purpose is to clearly alert users to pervasiveness of estimates

3. Certain significant estimates

a. Potential impact of estimates to value assets, liabilities, gains or losses

when

(1) Reasonably possible the estimate will change in the near term
(2) Effect of change would be material to financial statements

NOTE: Near term is defined as not to exceed 1 year from date of financial
statements.

b. This is not a change in SFAS 5, Accounting for

Contingencies
c. Disclosure of factors causing the estimate to be sensitive to change is encouraged, but not
required
d. Materiality is measured by the effect of using a different estimate would have on the financial
statements

4. Current vulnerability due to concentrations

a. Before issuance of financial statements, management knows that

concentrations

(1) Exist at balance sheet date

(2) Make entity vulnerable to risk of near term severe impact
(3) Reasonably possible events could cause severe impact in near future

NOTE: Severe impact is defined as higher than materiality and would equally,
have a significant financially disruptive effect on the normal functioning of the entity.

b. Examples are concentrations in

1. Volume of business transacted with a particular customer,

supplier, lender, grantor, or contributor
2. Revenue from particular products, services, or fund-raising events
3. Available sources of supply of materials, labor, or services, or of
licenses or other rights used in the entity's operations

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Form and Contents of Financial Statements

4. Market or geographical area in which an entity conducts its

operations

c. Disclose the percentage of labor covered by a collective

bargaining agreement and the percentage covered whose agreement expires within 1 year.

d. Describe for operations outside of home country, the carrying value of net assets and location

Balance Sheet Format

The format of a balance sheet is not specified by any technical pronouncement but has become established as
a matter of tradition and, in some circumstances, industry practices. In general, the two types of format are the
report form and the account form. In the report form the balance sheet continues line by line from top to
bottom as follows:

Assets $xxx
Liabilities $xxx
Stockholders' equity xxx
Total liabilities and stockholders' equity $xxxxxx

In the account form the balance sheet appears in a balancing concept with asset on the left and liabilities and
equity amounts on the right as follows:

Assets $xxx Liabilities xxx

Stockholders' equity xxx
Total assets xxx Total liabilities & stockholders' equity xxx

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Form and Contents of Financial Statements

FORM OF INCOME STATEMENT

There are two generally accepted formats for the presentation of income from continuing operations: the
single step and multiple step forms.

In the single-step form, items are classified into two groups: revenues and expenses. The operating revenues
and other revenues are itemized and summed to determine total revenues. The cost of goods sold, operating
expenses, and other expenses are itemized and summed to determine total expenses. The total expenses
(including income taxes) are deducted from the total revenues to get net income( this title will vary depending
upon the occurrence of discontinued operations, extraordinary items, or accounting changes).

Example of single-step Income statement format

ABC Company
Income Statement
For the year Ended 12/31/2001

Revenues:

Sales (net of discounts and returns and allowances)

Gain on sale of equipment
Interest income
Dividend income

Expenses:
Cost of goods sold
Selling expenses
General and administrative expenses
Interest expense

Income before unusual or infrequent items and income taxes

xxx
Unusual or infrequent items:
Loss on sale of equipment
Income before income taxes
Income taxes
Net income
Earnings per share

Many accountants believe that intermediate groups and subtotals show significant relationships that assist in
interpreting the income statement and advocate a multiple-step format. They believe that income statement
users may be misled when operating and non-operating activities are combined in a single-step income
statement. In a multiple-step income statement, operating revenues and expenses are separated from non-
operating revenues and expenses to provide more information concerning the firm's primary activities. This
format breaks the revenue and expense items into various intermediate income components so that important
relationships can be shown and attention can be focused on significant subtotals.

Example of a multiple-step income statement format

ABC Company
Income Statement
For the Year Ended 12/31/2001
Sales:
Sales
Less: Sales discounts
Sales returns and allowances
Net sales
Cost of goods sold:
Inventory, 1/1/99
Purchases
Add transportation-in
Total cost of purchases

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Form and Contents of Financial Statements

Less: Purchase discount

Purchase returns and allowances
Net purchases
Cost of goods available for sale
Less inventory, 12/31/99
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses
Sales salaries
Commissions
Advertising expense
Delivery expense
Selling supplies expense
Depreciation of store furniture and equipment
General and administrative expenses
Officers' salaries
Office salaries
Bad debts expense
Office supplies expense
Depreciation of office furniture and fixtures
Depreciation of building
Insurance expense
Utilities expense
Total operating expense
Operating income
Other revenues:
Dividend income
interest income
Other expenses'.
Interest expense
Income before unusual Or infrequent items and income tax
Unusual or infrequent items:
Write-down of inventory to market
Loss from permanent impairment of value of manufacturing facilities
Income from operations before income taxes
Provision for income tax
Net income
Earnings per share

1e page 49
References

ARB Description

ARB 43 Restatement and Revision of Accounting Research Bulletins

ARB 44 Declining-balance Depreciation
ARB 45 Long-Term Construction-Type Contracts
ARB 46 Discontinuance of Dating Earned Surplus
ARB 47 Accounting for Costs of Pension Plans
ARB 48 Business Combinations
ARB 49 Earnings per Share
ARB 50 Contingencies
ARB 51 Consolidated Financial Statements

1e page 50
References

APS Description

APS 1 Statement by the Accounting Principles Board

APS 2 Disclosure of Supplemental Financial Information by Diversified Companies
APS 3 Financial Statements Restated for General Price-Level Changes
APS 4 Basic Concepts and Accounting Principles Underlying Financial Statements of Business
Enterprises

1e page 51
References

APB Description
APB 1 New Depreciation Guidelines and Rules
APB 2 Accounting for the "Investment Credit"
APB 3 The Statement of Source and Application of Funds
APB 4 Reporting of Leases in Financial Statements of Lessee
APB 5 Accounting for the "Investment Credit"
APB 6 Status of Accounting Research Bulletins
APB 7 Accounting for Leases in Financial Statements of Lessors
APB 8 Accounting for the Cost of Pension Plans
APB 9 Reporting the Results of Operations
APB 10 Omnibus Opinion--1966 – Consolidated Financial Statements, Poolings of Interest,
Restatement of Financial Statements, Tax Allocation Accounts, Discounting Offsetting
Securities Against Taxes Payable, Convertible Debt and Debt Issued with Stock Warrants,
Liquidation Preference of Preferred Stock, Installment Method of Accounting
APB 11 Accounting for Income Taxes
APB 12 Omnibus Opinion--1967 - Classification and Disclosure of Allowances, Disclosure of
Depreciable Assets and Depreciation, Deferred Compensation Contracts, Capital Changes,
Convertible Debt and Debt Issued with Stock Warrants, Amortization of Debt Discount and
Expense or Premium
APB 13 Amending Paragraph 6 of APB Opinion No. 9, Application to Commercial Banks
APB 14 Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants
APB 15 Earnings per Share
APB 16 Business Combinations
APB 17 Intangible Assets
APB 18 The Equity Method of Accounting for Investments in Common Stock
APB 19 Reporting Changes in Financial Position
APB 20 Accounting Changes
APB 21 Interest on Receivables and Payables
APB 22 Disclosure of Accounting Policies
APB 23 Accounting for Income Taxes--Special Areas
APB 24 Accounting for Income Taxes--Investments in Common Stock Accounted for by the Equity
Method
APB 25 Accounting for Stock Issued to Employees
APB 26 Early Extinguishment of Debt
APB 27 Accounting for Lease Transactions by Manufacturer or Dealer Lessors
APB 28 Interim Financial Reporting
APB 29 Accounting for Nonmonetary Transactions
APB 30 Reporting the Results of Operations--Discontinued Events and Extraordinary Items
APB 31 Disclosure of Lease Commitments by Lessees

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References

AIN Description
AIN-ARB 43 Compensation Involved in Stock Option and Stock Purchase Plans- Unofficial
Interpretations of ARB No. 43, Ch. 13B
AIN-Key-Man Life Deferred Compensation Contracts- Unofficial Accounting Interpretations
AIN-ARB 51 Consolidated Financial Statements- Accounting Interpretations of ARB No. 51
AIN-APB 4 Accounting for the Investment Credit- Accounting Interpretations of APB Opinion
No. 4
AIN-APB 7 Accounting for Leases in Financial Statements of Lessors- Accounting
Interpretations of APB Opinion No. 7
AIN-APB 8 Accounting for the Cost of Pension Plans- Accounting Interpretations of APB
Opinion No. 8
AIN-APB 9 Reporting the Results of Operations- Unofficial Accounting Interpretations of
APB Opinion No. 9
AIN-APB 11 Accounting for Income Taxes- Accounting Interpretations of APB Opinion No. 11
AIN-APB 15 Computing Earnings per Share- Accounting Interpretations of APB Opinion No.
15
AIN-APB 16 Business Combinations- Accounting Interpretations of APB Opinion No. 16
AIN-APB 17 Intangible Assets- Unofficial Accounting Interpretations of APB Opinion No. 17
AIN-APB 18 The Equity Method of Accounting for Investments in Common Stock-
Interpretations of APB Opinion No. 18
AIN-APB 19 Reporting Changes in Financial Position- Accounting Interpretations of APB
Opinion No. 19
AIN-APB 20 Accounting Changes- Accounting Interpretations of APB Opinion No. 20
AIN-APB 21 Interest on Receivables and Payables- Accounting Interpretations of APB Opinion
No. 21
AIN-APB 22 Disclosure of Accounting Policies- Accounting Interpretations of APB Opinion No.
22
AIN-APB 23 Accounting for Income Taxes - Special Areas- Accounting Interpretations of APB
Opinion No. 23
AIN-APB 25 Accounting for Stock Issued to Employees- Accounting Interpretations of APB
Opinion No. 25
AIN-APB 26 Early Extinguishment of Debt- Accounting Interpretations of APB Opinion No. 26
AIN-APB 30 Reporting the Results of Operations- Accounting Interpretations of APB Opinion
No. 30

1e page 53
References

SFAC Description
SFAC 1 Objectives of Financial Reporting by Business Enterprises
SFAC 2 Qualitative Characteristics of Accounting Information
SFAC 3 Elements of Financial Statements of Business Enterprises (Superceded by SFAC 6)
SFAC 4 Objectives of Financial Reporting by Nonbusiness Organizations
SFAC 5 Recognition and Measurement in Financial Statements of Business Enterprises
SFAC 6 Elements of Financial Statements
SFAC 7 Using Cash Flow Information and Present Value in Accounting Measurements

1e page 54
References

FAS Description
FAS 1 Disclosure of Foreign Currency Translation Information
FAS 2 Accounting for Research and Development Costs
FAS 3 Reporting Accounting Changes in Interim Financial Statements
FAS 4 Reporting Gains and Losses from Extinguishment of Debt
FAS 5 Accounting for Contingencies
FAS 6 Classification of Short-Term Obligations Expected to Be Refinanced
FAS 7 Accounting and Reporting by Development Stage Enterprises
FAS 8 Accounting for the Translation of Foreign Currency Transactions and Foreign Currency
Financial Statements
FAS 9 Accounting for Income Taxes--Oil and Gas Producing Companies
FAS 10 Extension of "Grandfather" Provisions for Business Combinations
FAS 11 Accounting for Contingencies--Transition Method
FAS 12 Accounting for Certain Marketable Securities
FAS 13 Accounting for Leases
FAS 14 Financial Reporting for Segments of a Business Enterprise
FAS 15 Accounting by Debtors and Creditors for Troubled Debt Restructurings
FAS 16 Prior Period Adjustments
FAS 17 Accounting for Leases--Initial Direct Costs
FAS 18 Financial Reporting for Segments of a Business Enterprise--Interim Financial Statements
FAS 19 Financial Accounting and Reporting by Oil and Gas Producing Companies
FAS 20 Accounting for Forward Exchange Contracts
FAS 21 Suspension of the Reporting of Earnings per Share and Segment Information by Nonpublic
Enterprises
FAS 22 Changes in the Provisions of Lease Agreements Resulting from Refundings of Tax-Exempt
Debt
FAS 23 Inception of the Lease
FAS 24 Reporting Segment Information in Financial Statements That Are Presented in Another
Enterprise's Financial Report an amendment of FASB Statement No. 14
FAS 25 Suspension of Certain Accounting Requirements for Oil and Gas Producing Companies
FAS 26 Profit Recognition on Sales-Type Leases of Real Estate
FAS 27 Classification of Renewals or Extensions of Existing Sales-Type or Direct Financing
Leases
FAS 28 Accounting for Sales with Leasebacks
FAS 29 Determining Contingent Rentals
FAS 30 Disclosure of Information about Major Customers
FAS 31 Accounting for Tax Benefits Related to U.K. Tax Legislation concerning Stock Relief
FAS 32 Specialized Accounting and Reporting Principles and Practices in AICPA SOPs and Audit
and Accounting Guides
FAS 33 Financial Reporting and Changing Prices
FAS 34 Capitalization of Interest Cost
FAS 35 Accounting and Reporting by Defined Benefit Pension Plans
FAS 36 Disclosure of Pension Information
FAS 37 Balance Sheet Classification of Deferred Income Taxes
FAS 38 Accounting for Preacquisition Contingencies of Purchased Enterprises
FAS 39 Financial Reporting and Changing Prices: Specialized Assets--Mining and Oil and Gas
FAS 40 Financial Reporting and Changing Prices: Specialized Assets--Timberlands and Growing
Timber
FAS 41 Financial Reporting and Changing Prices: Specialized Assets--Income-Producing Real
Estate
FAS 42 Determining Materiality for Capitalization of Interest Cost
FAS 43 Accounting for Compensated Absences
FAS 44 Accounting for Intangible Assets of Motor Carriers
FAS 45 Accounting for Franchise Fee Revenue
FAS 46 Financial Reporting and Changing Prices: Motion Picture Films
FAS 47 Disclosure of Long-Term Obligations
FAS 48 Revenue Recognition When Right of Return Exists
FAS 49 Accounting for Product Financing Arrangements
FAS 50 Financial Reporting in the Record and Music Industry
FAS 51 Financial Reporting by Cable Television Companies
FAS 52 Foreign Currency Translation
FAS 53 Financial Reporting by Producers and Distributors of Motion Picture Films

1e page 55
References

FAS 54 Financial Reporting and Changing Prices: Investment Companies

FAS 55 Determining whether a Convertible Security Is a Common Stock Equivalent
FAS 56 Designation of AICPA Guide and SOP 81-1and SOP 81-2 as Preferable for Purposes of
applying APB Opinion 20
FAS 57 Related Party Disclosures
FAS 58 Capitalization of Interest Cost in Financial Statements That Include Investments
Accounted for by the Equity Method
FAS 59 Deferral of the Effective Date of Certain Accounting Requirements for Pension Plans of
State and Local Govt. Units
FAS 60 Accounting and Reporting by Insurance Enterprises
FAS 61 Accounting for Title Plant
FAS 62 Capitalization of Interest Cost in Situations Involving Certain Tax-Exempt Borrowings and
Certain Gifts and Grants
FAS 63 Financial Reporting by Broadcasters
FAS 64 Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements
FAS 65 Accounting for Certain Mortgage Banking Activities
FAS 66 Accounting for Sales of Real Estate
FAS 67 Accounting for Costs and Initial Rental Operations of Real Estate Projects
FAS 68 Research and Development Arrangements
FAS 69 Disclosures about Oil and Gas Producing Activities
FAS 70 Financial Reporting and Changing Prices: Foreign Currency Translation
FAS 71 Accounting for the Effects of Certain Types of Regulation
FAS 72 Accounting for Certain Acquisitions of Banking or Thrift Institutions
FAS 73 Reporting a Change in Accounting for Railroad Track Structures
FAS 74 Accounting for Special Termination Benefits Paid to Employees
FAS 75 Deferral of the Effective Date of Certain Accounting Requirements for Pension Plans of
State and Local Govt. Units
FAS 76 Extinguishment of Debt
FAS 77 Reporting by Transferors for Transfers of Receivables with Recourse
FAS 78 Classification of Obligations That Are Callable by the Creditor
FAS 79 Elimination of Certain Disclosures For Business Combinations by Nonpublic Enterprises
FAS 80 Accounting for Futures Contracts
FAS 81 Disclosure of Postretirement Health Care and Life Insurance Benefits
FAS 82 Financial Reporting and Changing Prices: Elimination of Certain Disclosures
FAS 83 Designation of Certain AICPA Guides and Statement of Position as Preferable for
Purposes of Applying APB Opinion 20
FAS 84 Induced Conversions of Convertible Debt
FAS 85 Yield Test for Determining whether a Convertible Security Is a Common Stock Equivalent
FAS 86 Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed
FAS 87 Employers' Accounting for Pensions
FAS 88 Employers' Accounting for Settlements & Curtailments of Defined Benefit Pension Plans
and for Termination Benefits
FAS 89 Financial Reporting and Changing Prices
FAS 90 Regulated Enterprises--Accounting for Abandonments and Disallowances of Plant Costs
FAS 91 Nonrefundable Fees & Costs Associated with Originating or Acquiring Loans and Initial
Direct Costs of Leases
FAS 92 Regulated Enterprises--Accounting for Phase-in Plans
FAS 93 Recognition of Depreciation by Not-for-Profit Organizations
FAS 94 Consolidation of All Majority-Owned Subsidiaries
FAS 95 Statement of Cash Flows
FAS 96 Accounting for Income Taxes
FAS 97 Accounting by Insurance Cos. for Certain Long-Duration Contracts & Realized Gains &
Losses on Investment Sales
FAS 98 Accounting for Leases
FAS 99 Deferral of the Effective Date of Recognition of Depreciation by Not-for-Profit
Organizations
FAS 100 Accounting for Income Taxes--Deferral of the Effective Date of FASB Statement No. 96
FAS 101 Regulated Enterprises--Accounting for the Discontinuation of Application of FASB
Statement No. 71
FAS 102 Statement of Cash Flows--Exemption of Certain Enterprises and Classification of Cash
Flows from Certain Securities Acquired for Resale
FAS 103 Accounting for Income Taxes--Deferral of the Effective Date of FASB Statement No. 96

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References

FAS 104 Statement of Cash Flows--Net Reporting of Certain Cash Receipts and Cash Payments and
Classification of Cash Flows from Hedging Transactions
FAS 105 Disclosure of Information about Financial Instruments with Off-Balance-Sheet Risk and
Concentrations of Credit Risk
FAS 106 Employers' Accounting for Postretirement Benefits Other Than Pensions
FAS 107 Disclosures about Fair Value of Financial Instruments
FAS 108 Accounting for Income Taxes--Deferral of the Effective Date of FASB Statement No. 96
FAS 109 Accounting for Income Taxes
FAS 110 Reporting by Defined Benefit Pension Plans of Investment Contracts
FAS 111 Rescission of FASB Statement No. 32 and Technical Corrections
FAS 112 Employers' Accounting for Postemployment Benefits
FAS 113 Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts
FAS 114 Accounting by Creditors for Impairment of a Loan
FAS 115 Accounting for Certain Investments in Debt and Equity Securities
FAS 116 Accounting for Contributions Received and Contributions Made
FAS 117 Financial Statements of Not-for-Profit Organizations
FAS 118 Accounting by Creditors for Impairment of a Loan-- Income Recognition and Disclosures
FAS 119 Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments
FAS 120 Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance
Enterprises for Certain Long-Duration Participating Contracts
FAS 121 Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of
FAS 122 Mortgage Servicing Rights
FAS 123 Accounting for Stock-Based Compensation
FAS 124 Accounting for Certain Investments Held by Not-for-Profit Organizations
FAS 125 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities
FAS 126 Exemption from Certain Required Disclosures about Financial Instruments for Certain
Nonpublic Entities
FAS 127 Deferral of the Effective Date of Certain Provisions of FASB Statement No. 125
FAS 128 Earnings per Share
FAS 129 Disclosure of Information about Capital Structure
FAS 130 Reporting Comprehensive Income
FAS 131 Disclosures about Segments of an Enterprise and Related Information
FAS 132 Employers’ Disclosures about Pensions and Other Postretirement Benefits
FAS 133 Accounting for Derivative Instruments and Hedging Activities
FAS 134 Accounting for Mortgage-Backed Securities Retained after the Securitization of Mortgage
Loans Held for Sale by a Mortgage Banking Enterprise
FAS 135 Rescission of FASB Statement No. 75 and Technical Corrections
FAS 136 Transfers of Assets to a Not-for-Profit Organization or Charitable Trust That Raises or
Holds Contributions for Others
FAS 137 Accounting for Derivative Instruments and Hedging Activities—Deferral of the Effective
Date of FASB Statement No. 133 (an amendment of FASB Statement No. 133)
FAS 138 Accounting for Certain Derivative Instruments and Certain Hedging Activities (an
amendment of FASB Statement No. 133)
FAS 139 Rescission of FASB Statement No. 53 and amendments to FASB Statements No. 63, 89,
and 121
FAS 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities (a replacement of FASB Statement 125)
FAS 141 Business Combinations
FAS 142 Goodwill and Other Intangible Assets
FAS 143 Accounting for Asset Retirement Obligation
FAS 144 Accounting for Impairment or Disposal of Long-Lived Assets
FAS 145 Rescission of FASB Statements No. 4, 44 and 64, amendment of FASB Statement No. 13,
and Technical Correction
FAS 146 Accounting for Costs Associated with Exit or disposal
FAS 147 Acquitions of Certain Financial Institutions – An amendment to FASB 72 & 144
FAS 148 Accounting for Stock based Compensation- Transition and Disclosure
FAS 149 Amendment of Statement 133 on Derivative Instruments and Hedging Activities
FAS 150 Acquitions of Certain Financial Institutions with characteristics of both Liabilities and
Equity

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References

FIN Description
FIN 1 Accounting Changes Related to the Cost of Inventory

FIN 2 Imputing Interest on Debt Arrangements Made under the Federal Bankruptcy Act

FIN 3 Accounting for the Cost of Pension Plans Subject to the Employee Retirement Income
Security Act of 1974
FIN 4 Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the
Purchase Method
FIN 5 Applicability of FASB Statement No. 2 to Development Stage Enterprises
FIN 6 Applicability of FASB Statement No. 2 to Computer Software
FIN 7 Applying FASB Statement No. 7 in Financial Statements of Established Operating
Enterprises
FIN 8 Classification of a Short-Term Obligation Repaid Prior to Being Replaced by a Long-Term
Security
FIN 9 Applying APB Opinions No. 16 and 17 When a Savings and Loan Association or a Similar
Institution Is Acquired in a Business Combination Accounted for by the Purchase Method
FIN 10 Application of FASB Statement No. 12 to Personal Financial Statements
FIN 11 Changes in Market Value after the Balance Sheet Date
FIN 12 Accounting for Previously Established Allowance Accounts
FIN 13 Consolidation of a Parent and Its Subsidiaries Having Different Balance Sheet Dates
FIN 14 Reasonable Estimation of the Amount of a Loss
FIN 15 Translation of Unamortized Policy Acquisition Costs by a Stock Life Insurance Company
FIN 16 Clarification of Definitions and Accounting for Marketable Equity Securities That Become
Nonmarketable
FIN 17 Applying the Lower of Cost or Market Rule in Translated Financial Statements
FIN 18 Accounting for Income Taxes in Interim Periods
FIN 19 Lessee Guarantee of the Residual Value of Leased Property
FIN 20 Reporting Accounting Changes under AICPA Statements of Position
FIN 21 Accounting for Leases in a Business Combination
FIN 22 Applicability of Indefinite Reversal Criteria to Timing Differences
FIN 23 Leases of Certain Property Owned by a Governmental Unit or Authority
FIN 24 Leases Involving Only Part of a Building
FIN 25 Accounting for an Unused Investment Tax Credit
FIN 26 Accounting for Purchase of a Leased Asset by the Lessee during the Term of the Lease
FIN 27 Accounting for a Loss on a Sublease
FIN 28 Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans
FIN 29 Reporting Tax Benefits Realized on Disposition of Investments in Certain Subsidiaries and
Other Investees
FIN 30 Accounting for Involuntary Conversions of Nonmonetary Assets to Monetary Assets
FIN 31 Treatment of Stock Compensation Plans in EPS Computations
FIN 32 Application of Percentage Limitations in Recognizing Investment Tax Credit
FIN 33 Applying FASB Statement No. 34 to Oil and Gas Producing Operations Accounted for by
the Full Cost Method
FIN 34 Disclosure of Indirect Guarantees of Indebtedness of Others
FIN 35 Criteria for Applying the Equity Method of Accounting for Investments in Common Stock
FIN 36 Accounting for Exploratory Wells in Progress at the End of a Period
FIN 37 Accounting for Translation Adjustments upon Sale of Part of an Investment in a Foreign
Entity
FIN 38 Determining the Measurement Date for Stock Option, Purchase, and Award Plans Involving
Junior Stock
FIN 39 Offsetting of Amounts Related to Certain Contracts
FIN 40 Applicability of Generally Accepted Accounting Principles to Mutual Life Insurance and
Other Enterprises
FIN 41 Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements
FIN 42 Accounting for Transfers of Assets in Which a Not-for-Profit Organization Is Granted
Variance Power
FIN 43 Real Estate Sales (an interpretation of FASB Statement No. 66)
FIN 44 Accounting for certain transactions involving Stock compensation
FIN 45 Gurantor’s Accounting and Disclosure Requirements for Gurantees , including indirect
guarantees of indebtedness of others.
FIN 46 Consolidation of variable interest entities.

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References

FTB Description
FTB 79-1 Purpose and Scope of FASB Technical Bulletins and Procedures for Issuance
FTB 79-2 Computer Software Costs
FTB 79-3 Subjective Acceleration Clauses in Long-Term Debt Agreements
FTB 79-4 Segment Reporting of Puerto Rican Operations
FTB 79-5 Meaning of the Term "Customer" as It Applies to Health Care Facilities under FASB
Statement No. 14
FTB 79-6 Valuation Allowances Following Debt Restructuring
FTB 79-7 Recoveries of a Previous Writedown under a Troubled Debt Restructuring Involving a
Modification of Terms
FTB 79-8 Applicability of FASB Statements 21 and 33 to Certain Brokers and Dealers in
Securities
FTB 79-9 Accounting in Interim Periods for Changes in Income Tax Rates
FTB 79-10 Fiscal Funding Clauses in Lease Agreements FTB 79-11
FTB 79-11 Effect of a Penalty on the Term of a Lease
FTB 79-12 Interest Rate Used in Calculating the Present Value of Minimum Lease Payments
FTB 79-13 Applicability of FASB Statement No. 13 to Current Value Financial Statements
FTB 79-14 Upward Adjustment of Guaranteed Residual Values
FTB 79-15 Accounting for Loss on a Sublease Not Involving the Disposal of a Segment
FTB 79-16 Effect of a Change in Income Tax Rate on the Accounting for Leveraged Leases
FTB 79-17 Reporting Cumulative Effect Adjustment from Retroactive Application of FASB
Statement No. 13
FTB 79-18 Transition Requirement of Certain FASB Amendments and Interpretations of FASB
Statement No. 13
FTB 79-19 Investor's Accounting for Unrealized Losses on Marketable Securities Owned by an
Equity Method Investee
FTB 80-1 Early Extinguishment of Debt through Exchange for Common or Preferred Stock
FTB 80-2 Classification of Debt Restructurings by Debtors and Creditors
FTB 81-1 Disclosure of Interest Rate Futures Contracts and Forward and Standby Contracts
FTB 81-2 Accounting for Unused Investment Tax Credits Acquired in a Business Combination
Accounted for by the Purchase Method
FTB 81-3 Multiemployer Pension Plan Amendments Act of 1980
FTB 81-4 Classification as Monetary or Nonmonetary Items
FTB 81-5 Offsetting Interest Cost to Be Capitalized with Interest Income
FTB 81-6 Applicability of Statement 15 to Debtors in Bankruptcy Situations
FTB 82-1 Disclosure of the Sale or Purchase of Tax Benefits through Tax Leases
FTB 82-2 Accounting for the Conversion of Stock Options into Incentive Stock Options as a
Result of the Economic Recovery Tax Act of 1981
FTB 83-1 Accounting for the Reduction in the Tax Basis of an Asset Caused by the Investment
Tax Credit
FTB 84-1 Accounting for Stock Issued to Acquire the Results of a Research and Development
Arrangement
FTB 84-2 Accounting for the Effects of the Tax Reform Act of 1984 on Deferred Income Taxes
Relating to Domestic International Sales Corporations
FTB 84-3 Accounting for the Effects of the Tax Reform Act of 1984 on Deferred Income Taxes
of Stock Life Insurance Enterprises
FTB 84-4 In-Substance Defeasance of Debt
FTB 85-1 Accounting for the Receipt of Federal Home Loan Mortgage Corporation Participating
Preferred Stock
FTB 85-2 Accounting for Collateralized Mortgage Obligations (CMOs)
FTB 85-3 Accounting for Operating Leases with Scheduled Rent Increases
FTB 85-4 Accounting for Purchases of Life Insurance
FTB 85-5 Issues Relating to Accounting for Business Combinations, Including
FTB 85-6 Accounting for a Purchase of Treasury Shares and Costs Incurred in Defending against
a Takeover Attempt
FTB 86-1 Accounting for Certain Effects of the Tax Reform Act of 1986
FTB 86-2 Accounting for an Interest in the Residual Value of a Leased Asset
FTB 87-1 Accounting for a Change in Method of Accounting for Certain Postretirement Benefits
FTB 87-2 Computation of a Loss on an Abandonment FTB 87-3
FTB 87-3 Accounting for Mortgage Servicing Fees and Rights
FTB 88-1 Issues Relating to Accounting for Leases
FTB 88-2 Definition of a Right of Setoff

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References

FTB 90-1 Accounting for Separately Priced Extended Warranty and Product Maintenance
Contracts
FTB 94-1 Application of Statement 115 to Debt Securities Restructured in a Troubled Debt
Restructuring
FTB 97-1 Accounting under Statement 123 for Certain Employee Stock Purchase Plans with a
Look-Back Option
FTB 00-1 Effective Date For Certain Financial Institutions of certain provisions of Statement 140
related to the isolation of Transferred Financial Assets

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References

GENERAL GUIDES ON:

Audit Sampling
Consideration of Internal Control
Personal Financial Statements
Prospective Financial Information
Real Estate Appraisal Information

INDUSTRY GUIDES ON AUDIT OF

Agricultural Producers and Cooperatives

Airlines
Banks and Savings Institutions
Brokers and Dealers in Securities
Casinos
Colleges and Universities
Common Interest Realty Associations
Construction Contractors
Credit Unions
Employee Benefit Plans
Federal Government Contractors
Finance Companies
Health Care Organizations
Investment Companies
Not-for-Profit Organizations
Nonprofit Organizations
Oil and Gas Producing Activities
Property and Liability Insurance Companies
State and Local Governmental Units
Stock Life Insurance Companies
Voluntary Health and Welfare Organisation

1e page 61
References

SOP Description
SOP 75-2 Accounting Practices of Real Estate Investment Trusts
SOP 76-3 Accounting Practices for Certain Employee Stock Ownership Plans
SOP 78-9 Accounting for Investments in Real Estate Ventures
SOP 81-1 Accounting for Performance of Construction-Type and Certain Production-
Type Contracts
SOP 82-1 Accounting and Financial Reporting for Personal Financial Statements
SOP 85-3 Accounting by Agricultural Producers and Agricultural Cooperatives
SOP 88-1 Accounting for Developmental and Preoperating Costs, Purchases and
Exchanges of Take-off and Landing Slots, and Airframe Modifications
SOP 90-3 Definition of the Term Substantially the Same for Holders of Debt Instruments,
as Used in Certain Audit Guides and a Statement of Position
SOP 90-7 Financial Reporting by Entities in Reorganization Under the Bankruptcy Code
SOP 92-1 Accounting for Real Estate Syndication Income
SOP 92-3 Accounting for Foreclosed Assets
SOP 92-5 Accounting for Foreign Property and Liability Reinsurance
SOP 92-6 Accounting and Reporting by Health and Welfare Benefit Plans
SOP 93-1 Financial Accounting and Reporting for High-Yield Debt Securities by
Investment Companies
SOP 93-2 Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies
SOP 93-3 Rescission of Accounting Principles Board Statements
SOP 93-4 Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies
SOP 93-6 Employers' Accounting for Employee Stock Ownership Plans
SOP 93-7 Reporting on Advertising Costs
SOP 94-3 Reporting of Related Entities by Not-for-Profit Organizations
SOP 94-4 Reporting of Investment Contracts Held by Health and Welfare Benefit Plans
and Defined-Contribution Pension Plans
SOP 94-5 Disclosures of Certain Matters in the Financial Statements of Insurance
Enterprises
SOP 94-6 Disclosure of Certain Significant Risks and Uncertainties
SOP 95-1 Accounting for Certain Insurance Activities of Mutual Life Insurance
Enterprises
SOP 95-2 Financial Reporting by Nonpublic Investment Partnerships
SOP 95-3 Accounting for Certain Distribution Costs of Investment Companies
SOP 96-1 Environmental Remediation Liabilities
SOP 97-1 Accounting by Participating Mortgage Loan Borrowers
SOP 97-2 Software Revenue Recognition
SOP 97-3 Accounting by Insurance and Other Enterprises for Insurance-Related
Assessments
SOP 98-1 Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use
SOP 98-2 Accounting for Costs of Activities of Not-for-Profit Organizations and State and
Local Governmental Entities That Include Fund Raising
SOP 98-4 Deferral of the Effective Date of a Provision of SOP 97-2, Software Revenue
Recognition
SOP 98-5 Reporting on the Costs of Start-Up Activities
SOP 98-7 Deposit Accounting: Accounting for Insurance and Reinsurance Contracts That
Do Not Transfer Insurance Risk
SOP 98-9 Modification of SOP 97-2, Software Revenue Recognition, With Respect to
Certain Transactions
SOP 99-2 Accounting for and Reporting of Postretirement Medical Benefit (401(h))
Features of Defined Benefit Pension Plans
SOP 99-3 Accounting for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters
SOP 00-2 Accounting by Producers or Distributors of Films
SOP 00-3 Accounting by Insurance Enterprises for Demutualizations and Formations of
Mutual Insurance Holding Companies and for Certain Long-Duration
Participating Contracts
SOP 01-1 Amendment to Scope of Statement of Position 95-2, Financial Reporting by
Nonpublic Investment Partnerships, to Include Commodity Pools

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References

SOP 01-2 Accounting and Reporting by Health and Welfare Benefit Plans
SOP 01-5 Amendments to specific AICPA pronouncements for changes related to NAIC
codification
SOP 01-6 Accounting by certain entities that lend to or finance the activities of others
SOP 02-2 Accounting for Derivative instruments and hedging activities by not for profit
health care organizations
SOP 03-1 Accounting and Reporting by insurance enterprises for certain nontraditional
long duration contracts and for separate accounts

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References

SOP Description
SOP 89-2 Reports on Audited Financial Statements of Investment Companies
SOP 89-3 Questions Concerning Accountants' Services on Prospective Financial
Statements
SOP 89-7 Report on the Internal Control Structure in Audits of Investment Companies
SOP 90-1 Accountants' Services on Prospective Financial Statements for Internal Use
Only and Partial Presentations
SOP 90-2 Report on the Internal Control Structure in Audits of Futures Commission
Merchants
SOP 92-2 Questions and Answers on the Term Reasonably Objective Basis and Other
Issues Affecting Prospective Financial Statements
SOP 92-4 Auditing Insurance Entities' Loss Reserves
SOP 92-8 Auditing Property/Casualty Insurance Entities' Statutory Financial
StatementsApplying Certain Requirements of the NAIC Annual Statement
Instructions
SOP 93-5 Reporting on Required Supplementary Information Accompanying Compiled or
Reviewed Financial Statements of Common Interest Realty Associations
SOP 93-8 The Auditor's Consideration of Regulatory Risk-Based Capital for Life
Insurance Enterprises
SOP 94-1 Inquiries of State Insurance Regulators
SOP 95-4 Letters for State Insurance Regulators to Comply With the NAIC Model Audit
Rule
SOP 95-5 Auditor's Reporting on Statutory Financial Statements of Insurance Enterprises
SOP 98-3 Audits of States, Local Governments, and Not-for-Profit Organizations
Receiving Federal Awards
SOP 98-6 Reporting on Management's Assessment Pursuant to the Life Insurance Ethical
Market Conduct Program of the Insurance Marketplace Standards Association
SOP 98-8 Engagements to Perform Year 2000 Agreed-Upon Procedures Attestation
Engagements Pursuant to Rule 17a–5 of the Securities Exchange Act of 1934,
Rule 17Ad–18 of the Securities Exchange Act of 1934, and Advisories No. 17–
98 and No. 42–98 of the Commodity Futures Trading Commission
SOP 99-1 Guidance to Practitioners in Conducting and Reporting on an Agreed-Upon
Procedures Engagement to Assist Management in Evaluating the Effectiveness
of Its Corporate Compliance Program
SOP 00-1 Auditing Health Care Third-Party Revenues and Related Receivables
SOP 01-3 Performing Agreed-Upon Procedures Engagements That Address Internal
Control Over Derivative Transactions as Required by the New York State
Insurance Law
SOP 01-4 Reporting Pursuant to the Association for Investment Management and Research
Performance Presentation Standards
SOP 02-1 Performing Agreed-Upon Procedures Engagements That Address Annual claims
prompt payment reports as required by the New Jersey Administrative Code

1e page 64
References

EITF Description
EITF 84-1 1984 Tax Reform Act : Deferred Income Taxes of Stock Life Insurance Companies
EITF 84-2 Tax Reform Act of 1984: Deferred Income Taxes Relating to Domestic International Sales
Corporations
EITF 84-3 Convertible Debt "Sweeteners"
EITF 84-4 Acquisition, Development, and Construction Loans
EITF 84-5 Sale of Marketable Securities with a Put Option
EITF 84-6 Termination of Defined Benefit Pension Plans
EITF 84-7 Termination of Interest Rate Swaps
EITF 84-8 Variable Stock Purchase Warrants Given by Suppliers to Customers
EITF 84-9 Deposit Float of Banks
EITF 84-10 LIFO Conformity of Companies Relying on Insilco Tax Court Decision
EITF 84-11 Offsetting Installment Note Receivables and Bank Debt ("Note Monetization")
EITF 84-12 Operating Leases with Scheduled Rent Increases
EITF 84-13 Purchase of Stock Options and Stock Appreciation Rights in a Leveraged Buyout
EITF 84-14 Deferred Interest Rate Setting
EITF 84-15 Grantor Trusts Consolidation
EITF 84-16 Earnings-per-Share Cash-Yield Test for Zero Coupon Bonds
EITF 84-17 Profit Recognition on Sales of Real Estate with Graduated Payment Mortgages or Insured
Mortgages
EITF 84-18 Stock Option Pyramiding
EITF 84-19 Mortgage Loan Payment Modifications
EITF 84-20 GNMA Dollar Rolls
EITF 84-21 Sale of a Loan with a Partial Participation Retained
EITF 84-22 Prior Years' Earnings per Share Following a Savings and Loan Association Conversion and
Pooling
EITF 84-23 Leveraged Buyout Holding Company Debt
EITF 84-24 LIFO Accounting Issues
EITF 84-25 Offsetting Nonrecourse Debt with Sales-Type or Direct Financing Lease Receivables
EITF 84-26 Defeasance of Special-Purpose Borrowings
EITF 84-27 Deferred Taxes on Subsidiary Stock Sales
EITF 84-28 Impairment of Long-Lived Assets
EITF 84-29 Gain and Loss Recognition on Exchanges of Productive Assets and the Effect of Boot
EITF 84-30 Sales of Loans to Special-Purpose Entities
EITF 84-31 Equity Certificates of Deposit
EITF 84-33 Acquisition of a Tax Loss Carryforward--Temporary Parent-Subsidiary Relationship
EITF 84-34 Permanent Discount Restricted Stock Purchase Plans
EITF 84-35 Business Combinations: Sale of Duplicate Facilities and Accrual of Liabilities
EITF 84-36 Interest Rate Swap Transactions
EITF 84-37 Sale-Leaseback Transaction with Repurchase Option
EITF 84-38 Identical Common Shares for a Pooling of Interests
EITF 84-39 Transfers of Monetary and Nonmonetary Assets among Individuals and Entities under
Common Control
EITF 84-40 Long-Term Debt Repayable by a Capital Stock Transaction
EITF 84-41 Consolidation of Subsidiary after Instantaneous In-Substance Defeasance
EITF 84-42 Push-Down of Parent Company Debt to a Subsidiary
EITF 84-43 Income Tax Effects of Asset Revaluations in Certain Foreign Countries
EITF 84-44 Partial Termination of a Defined Benefit Pension Plan
EITF 85-1 Classifying Notes Received for Capital Stock
EITF 85-2 Classification of Costs Incurred in a Takeover Defense
EITF 85-3 Tax Benefits Relating to Asset Dispositions Following an Acquisition of a Financial Institution
EITF 85-4 Downstream Mergers and Other Stock Transactions between Companies under Common
Control
EITF 85-5 Restoration of Deferred Taxes Previously Eliminated by Net Operating Loss Recognition
EITF 85-6 Futures Implementation Questions
EITF 85-7 Federal Home Loan Mortgage Corporation Stock
EITF 85-8 Amortization of Thrift Intangibles
EITF 85-9 Revenue Recognition on Options to Purchase Stock of Another Entity
EITF 85-10 Employee Stock Ownership Plan Contribution Funded by a Pension Plan Termination
EITF 85-11 Use of an Employee Stock Ownership Plan in a Leveraged Buyout
EITF 85-12 Retention of Specialized Accounting for Investments in Consolidation
EITF 85-13 Sale of Mortgage Service Rights on Mortgages Owned by Others

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References

EITF 85-14 Securities That Can Be Acquired for Cash in a Pooling of Interests
EITF 85-15 Recognizing Benefits of Purchased Net Operating Loss Carryforwards
EITF 85-16 Leveraged Leases
EITF 85-17 Accrued Interest upon Conversion of Convertible Debt
EITF 85-18 Earnings-per-Share Effect of Equity Commitment Notes
EITF 85-20 Recognition of Fees for Guaranteeing a Loan
EITF 85-21 Changes of Ownership Resulting in a New Basis of Accounting
EITF 85-22 Retroactive Application of FASB Technical Bulletins
EITF 85-23 Effect of a Redemption Agreement on Carrying Value of a Security
EITF 85-24 Distribution Fees by Distributors of Mutual Funds That Do Not Have a Front-End Sales
Charge
EITF 85-25 Sale of Preferred Stocks with a Put Option
EITF 85-26 Measurement of Servicing Fee under FASB Statement No. 65 When a Loan Is Sold with
Servicing Retained
EITF 85-27 Recognition of Receipts from Made-Up Rental Shortfalls
EITF 85-28 Consolidation Issues Relating to Collateralized Mortgage Obligations
EITF 85-29 Convertible Bonds with a "Premium Put"
EITF 85-30 Sale of Marketable Securities at a Gain with a Put Option
EITF 85-31 Comptroller of the Currency's Rule on Deferred Tax Debits
EITF 85-32 Purchased Lease Residuals
EITF 85-33 Disallowance of Income Tax Deduction for Core Deposit Intangibles
EITF 85-34 Banker's Acceptances and Risk Participations
EITF 85-35 Transition and Implementation Issues for FASB Statement No. 86
EITF 85-36 Discontinued Operations with Expected Gain and Interim Operating Losses
EITF 85-37 Recognition of Note Received for Real Estate Syndication Activities
EITF 85-38 Negative Amortizing Loans
EITF 85-39 Implications of SEC Staff Accounting Bulletin No. 59 on Noncurrent Marketable Equity
Securities
EITF 85-40 Comprehensive Review of Sales of Marketable Securities with Put Arrangements
EITF 85-41 Accounting for Savings and Loan Associations under FSLIC Management Consignment
Program
EITF 85-42 Amortization of Goodwill Resulting from Recording Time Savings Deposits at Fair Values
EITF 85-43 Sale of Subsidiary for Equity Interest in Buyer
EITF 85-44 Differences between Loan Loss Allowances for GAAP and RAP
EITF 85-45 Business Combinations: Settlement of Stock Options and Awards
EITF 85-46 Partnership's Purchase of Withdrawing Partner's Equity
EITF 86-1 Recognizing Net Operating Loss Carryforwards
EITF 86-2 Retroactive Wage Adjustments Affecting Medicare Payments
EITF 86-3 Retroactive Regulations regarding IRC Section 338 Purchase Price Allocations
EITF 86-4 Income Statement Treatment of Income Tax Benefit for Employee Stock Ownership Plan
Dividends
EITF 86-5 Classifying Demand Notes with Repayment Terms
EITF 86-6 Antispeculation Clauses in Real Estate Sales Contracts
EITF 86-7 Recognition by Homebuilders of Profit from Sales of Land and Related Construction Contracts
EITF 86-8 Sale of Bad-Debt Recovery Rights
EITF 86-9 IRC Section 338 and Push-Down Accounting
EITF 86-10 Pooling with 10 Percent Cash Payout Determined by Lottery
EITF 86-11 Recognition of Possible 1986 Tax Law Changes
EITF 86-12 Accounting by Insureds for Claims-Made Insurance Policies
EITF 86-13 Recognition of Inventory Market Declines at Interim Reporting Dates
EITF 86-14 Purchased Research and Development Projects in a Business Combination
EITF 86-15 Increasing-Rate Debt
EITF 86-16 Carryover of Predecessor Cost in Leveraged Buyout Transactions
EITF 86-17 Deferred Profit on Sale-Leaseback Transaction with Lessee Guarantee of Residual Value
EITF 86-18 Debtor's Accounting for a Modification of Debt Terms
EITF 86-19 Change in Accounting for Other Postemployment Benefits
EITF 86-20 Accounting for Other Postemployment Benefits of an Acquired Company
EITF 86-21 Application of the AICPA Notice to Practitioners regarding Acquisition, Development, and
Construction Arrangements to Acquisition of an Operating Property
EITF 86-22 Display of Business Restructuring Provisions in the Income Statement
EITF 86-24 Third-Party Establishment of Collateralized Mortgage Obligations
EITF 86-25 Offsetting Foreign Currency Swaps
EITF 86-26 Using Forward Commitments as a Surrogate for Deferred Rate Setting

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References

EITF 86-27 Measurement of Excess Contributions to a Defined Contribution Plan or Employee Stock
Ownership Plan
EITF 86-28 Accounting Implications of Indexed Debt Instruments
EITF 86-29 Nonmonetary Transactions: Magnitude of Boot and the Exceptions to the Use of Fair Value
EITF 86-30 Classification of Obligations When a Violation Is Waived by the Creditor
EITF 86-31 Reporting the Tax Implications of a Pooling of a Bank and a Savings and Loan Association
EITF 86-32 Early Extinguishment of a Subsidiary's Mandatorily Redeemable Preferred Stock
EITF 86-33 Tax Indemnifications in Lease Agreements
EITF 86-34 Futures Contracts Used as Hedges of Anticipated Reverse Repurchase Transactions
EITF 86-35 Debentures with Detachable Stock Purchase Warrants
EITF 86-36 Invasion of a Defeasance Trust
EITF 86-37 Recognition of Tax Benefit of Discounting Loss Reserves of Insurance Companies
EITF 86-38 Implications of Mortgage Prepayments on Amortization of Servicing Rights
EITF 86-39 Gains from the Sale of Mortgage Loans with Servicing Rights Retained
EITF 86-40 Investments in Open-End Mutual Funds That Invest in U.S.Government Securities
EITF 86-41 Carryforward of the Corporate Alternative Minimum Tax Credit
EITF 86-42 Effect of a Change in Tax Rates on Assets and Liabilities Recorded Net-of-Tax in a Purchase
Business Combination
EITF 86-43 Effect of a Change in Tax Law or Rates on Leveraged Leases
EITF 86-44 Effect of a Change in Tax Law on Investments in Safe Harbor Leases
EITF 86-45 Imputation of Dividends on Preferred Stock Redeemable at the Issuer's Option with Initial
Below-Market Dividend Rate
EITF 86-46 Uniform Capitalization Rules for Inventory under the Tax Reform Act of 1986
EITF 87-1 Deferral Accounting for Cash Securities That Are Used to Hedge Rate or Price Risk
EITF 87-2 Net Present Value Method of Valuing Speculative Foreign Exchange Contracts
EITF 87-4 Restructuring of Operations: Implications of SEC Staff Accounting Bulletin No. 67
EITF 87-5 Troubled Debt Restructurings: Interrelationship between FASB Statement No. 15 and the
AICPA Savings and Loan Guide
EITF 87-6 Adjustments Relating to Stock Compensation Plans
EITF 87-7 Sale of an Asset Subject to a Lease and Nonrecourse Financing: "Wrap Lease Transactions"
EITF 87-8 Tax Reform Act of 1986: Issues Related to the Alternative Minimum Tax
EITF 87-9 Profit Recognition on Sales of Real Estate with Insured Mortgages or Surety Bonds
EITF 87-10 Revenue Recognition by Television "Barter" Syndicators
EITF 87-11 Allocation of Purchase Price to Assets to Be Sold
EITF 87-12 Foreign Debt-for-Equity Swaps
EITF 87-13 Amortization of Prior Service Cost for a Defined Benefit Plan When There Is a History of Plan
Amendments
EITF 87-15 Effect of a Standstill Agreement on Pooling-of-Interests Accounting
EITF 87-16 Whether the 90 Percent Test for a Pooling of Interests Is Applied Separately to Each Company
or on a Combined Basis
EITF 87-17 Spinoffs or Other Distributions of Loans Receivable to Shareholders
EITF 87-18 Use of Zero Coupon Bonds in a Troubled Debt Restructuring
EITF 87-19 Substituted Debtors in a Troubled Debt Restructuring
EITF 87-20 Offsetting Certificates of Deposit against High-Coupon Debt
EITF 87-21 Change of Accounting Basis in Master Limited Partnership Transactions
EITF 87-22 Prepayments to the Secondary Reserve of the FSLIC
EITF 87-23 Book Value Stock Purchase Plans
EITF 87-24 Allocation of Interest to Discontinued Operations
EITF 87-25 Sale of Convertible, Adjustable-Rate Mortgages with Contingent Repayment Agreement
EITF 87-26 Hedging of Foreign Currency Exposure with a Tandem Currency
EITF 87-27 Poolings of Companies That Do Not Have a Controlling Class of Common Stock
EITF 87-28 Provision for Deferred Taxes on Increases in Cash Surrender Value of Key-Person Life
Insurance
EITF 87-29 Exchange of Real Estate Involving Boot
EITF 87-30 Sale of a Short-Term Loan Made under a Long-Term Credit Commitment
EITF 87-31 Sale of Put Options on Issuer's Stock
EITF 87-33 Stock Compensation Issues Related to Market Decline
EITF 87-34 Sale of Mortgage Servicing Rights with a Subservicing Agreement
EITF 88-1 Determination of Vested Benefit Obligation for a Defined Benefit Pension Plan
EITF 88-3 Rental Concessions Provided by Landlord
EITF 88-4 Classification of Payment Made to IRS to Retain Fiscal Year
EITF 88-5 Recognition of Insurance Death Benefits
EITF 88-6 Book Value Stock Plans in an Initial Public Offering

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EITF 88-8 Mortgage Swaps

EITF 88-9 Put Warrants
EITF 88-10 Costs Associated with Lease Modification or Termination
EITF 88-11 Allocation of Recorded Investment When a Loan or Part of a Loan Is Sold
EITF 88-12 Transfer of Ownership Interest as Part of Down Payment under FASB Statement No. 66
EITF 88-14 Settlement of Fees with Extra Units to a General Partner in a Master Limited Partnership
EITF 88-15 Classification of Subsidiary's Loan Payable in Consolidated Balance Sheet When Subsidiary's
and Parent's Fiscal Years Differ
EITF 88-16 Basis in Leveraged Buyout Transactions
EITF 88-17 Accounting for Fees and Costs Associated with Loan Syndications and Loan Participations
EITF 88-18 Sales of Future Revenues
EITF 88-19 FSLIC-Assisted Acquisitions of Thrifts
EITF 88-20 Difference between Initial Investment and Principal Amount of Loans in a Purchased Credit
Card Portfolio
EITF 88-21 Accounting for the Sale of Property Subject to the Seller's Preexisting Lease
EITF 88-22 Securitization of Credit Card and Other Receivable Portfolios
EITF 88-23 Lump-Sum Payments under Union Contracts
EITF 88-24 Effect of Various Forms of Financing under FASB Statement No. 66
EITF 88-25 Ongoing Accounting and Reporting for a Newly Created Liquidating Bank
EITF 88-26 Controlling Preferred Stock in a Pooling of Interests
EITF 88-27 Effect of Unallocated Shares in an Employee Stock Ownership Plan on Accounting for
Business Combinations
EITF 89-1 Accounting by a Pension Plan for Bank Investment Contracts and Guaranteed Investment
Contracts
EITF 89-2 Maximum Maturity Guarantees on Transfers of Receivables with Recourse
EITF 89-3 Balance Sheet Presentation of Savings Accounts in Financial Statements of Credit Unions
EITF 89-4 Accounting for a Purchased Investment in a Collateralized Mortgage Obligation Instrument or
in a Mortgage-Backed Interest-Only Certificate
EITF 89-5 Sale of Mortgage Loan Servicing Rights
EITF 89-7 Exchange of Assets or Interest in a Subsidiary for a Noncontrolling Equity Interest in a New
Entity
EITF 89-8 Expense Recognition for Employee Stock Ownership Plans
EITF 89-9 Accounting for In-Substance Foreclosures
EITF 89-10 Sponsor's Recognition of Employee Stock Ownership Plan Debt
EITF 89-11 Sponsor's Balance Sheet Classification of Capital Stock with a Put Option Held by an
Employee Stock Ownership Plan
EITF 89-12 Earnings-per-Share Issues Related to Convertible Preferred Stock Held by an Employee Stock
Ownership Plan
EITF 89-13 Accounting for the Cost of Asbestos Removal
EITF 89-14 Valuation of Repossessed Real Estate
EITF 89-15 Accounting for a Modification of Debt Terms When the Debtor Is Experiencing Financial
Difficulties
EITF 89-16 Consideration of Executory Costs in Sale-Leaseback Transactions
EITF 89-17 Accounting for the Retail Sale of an Extended Warranty Contract in Connection with the Sale
of a Product
EITF 89-18 Divestitures of Certain Investment Securities to an Unregulated Commonly Controlled Entity
under FIRREA
EITF 89-19 Accounting for a Change in Goodwill Amortization for Business Combinations Initiated Prior
to the Effective Date of FASB Statement No. 72
EITF 89-20 Accounting for Cross Border Tax Benefit Leases
EITF 90-2 Exchange of Interest-Only and Principal-Only Securities for a Mortgage-Backed Security
EITF 90-3 Accounting for Employers' Obligations for Future Contributions to a Multiemployer Pension
Plan
EITF 90-4 Earnings-per-Share Treatment of Tax Benefits for Dividends on Stock Held by an Employee
Stock Ownership Plan
EITF 90-5 Exchanges of Ownership Interests between Entities under Common Control
EITF 90-6 Accounting for Certain Events Not Addressed in Issue No. 87-11 Relating to an Acquired
Operating Unit to Be Sold
EITF 90-7 Accounting for a Reload Stock Option
EITF 90-8 Capitalization of Costs to Treat Environmental Contamination
EITF 90-9 Changes to Fixed Employee Stock Option Plans as a Result of Equity Restructuring
EITF 90-10 Accounting for a Business Combination Involving a Majority-Owned Investee of a Venture
Capital Company

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References

EITF 90-11 Accounting for Exit and Entrance Fees Incurred in a Conversion from the Savings Association
Insurance Fund to the Bank Insurance Fund
EITF 90-12 Allocating Basis to Individual Assets and Liabilities for Transactions within the Scope of Issue
No. 88-16
EITF 90-13 Accounting for Simultaneous Common Control Mergers
EITF 90-14 Unsecured Guarantee by Parent of Subsidiary's Lease Payments in a Sale-Leaseback
Transaction
EITF 90-15 Impact of Nonsubstantive Lessors, Residual Value Guarantees, and Other Provisions in
Leasing Transactions
EITF 90-16 Accounting for Discontinued Operations Subsequently Retained
EITF 90-17 Hedging Foreign Currency Risks with Purchased Options
EITF 90-18 Effect of a "Removal of Accounts" Provision on the Accounting for a Credit Card
Securitization
EITF 90-19 Convertible Bonds with Issuer Option to Settle for Cash upon Conversion
EITF 90-20 Impact of an Uncollateralized Irrevocable Letter of Credit on a Real Estate Sale-Leaseback
Transaction
EITF 90-21 Balance Sheet Treatment of a Sale of Mortgage Servicing Rights with a Subservicing
Agreement
EITF 90-22 Accounting for Gas-Balancing Arrangements
EITF 91-1 Hedging Intercompany Foreign Currency Risks
EITF 91-2 Debtor's Accounting for Forfeiture of Real Estate Subject to a Nonrecourse Mortgage
EITF 91-3 Accounting for Income Tax Benefits from Bad Debts of a Savings and Loan Association
EITF 91-4 Hedging Foreign Currency Risks with Complex Options and Similar Transactions
EITF 91-5 Nonmonetary Exchange of Cost-Method Investments
EITF 91-6 Revenue Recognition of Long-Term Power Sales Contracts
EITF 91-7 Accounting for Pension Benefits Paid by Employers after Insurance Companies Fail to Provide
Annuity Benefits
EITF 91-8 Application of FASB Statement No. 96 to a State Tax Based on the Greater of a Franchise Tax
or an Income Tax
EITF 91-9 Revenue and Expense Recognition for Freight Services in Process
EITF 91-10 Accounting for Special Assessments and Tax Increment Financing Entities
EITF 92-1 Allocation of Residual Value or First-Loss Guarantee to Minimum Lease Payments in Leases
Involving Land and Building(s)
EITF 92-2 Measuring Loss Accruals by Transferors for Transfers of Receivables with Recourse
EITF 92-3 Earnings-per-Share Treatment of Tax Benefits for Dividends on Unallocated Stock Held by an
Employee Stock Ownership Plan (Consideration of the Implications of FASB Statement No.
109 on Issue 2 of EITF Issue No. 90-4)
EITF 92-4 Accounting for a Change in Functional Currency When an Economy Ceases to Be Considered
Highly Inflationary
EITF 92-5 Amortization Period for Net Deferred Credit Card Origination Costs
EITF 92-7 Accounting by Rate-Regulated Utilities for the Effects of Certain Alternative Revenue
Programs
EITF 92-8 Accounting for the Income Tax Effects under FASB Statement No. 109 of a Change in
Functional Currency When an Economy Ceases to Be Considered Highly Inflationary
EITF 92-9 Accounting for the Present Value of Future Profits Resulting from the Acquisition of a Life
Insurance Company
EITF 92-10 Loan Acquisitions involving Table Funding Arrangements
EITF 92-12 Accounting for OPEB Costs by Rate-Regulated Enterprises
EITF 92-13 Accounting for Estimated Payments in Connection with the Coal Industry Retiree Health
Benefit Act of 1992
EITF 93-1 Accounting for Individual Credit Card Acquisitions
EITF 93-2 Effect of Acquisition of Employer Shares for/by an Employee Benefit Trust on Accounting for
Business Combinations
EITF 93-3 Plan Assets under FASB Statement No. 106
EITF 93-4 Accounting for Regulatory Assets
EITF 93-5 Accounting for Environmental Liabilities
EITF 93-6 Accounting for Multiple-Year Retrospectively Rated Contracts by Ceding and Assuming
Enterprises
EITF 93-7 Uncertainties Related to Income Taxes in a Purchase Business Combination
EITF 93-8 Accounting for the Sale and Leaseback of an Asset That Is Leased to Another Party
EITF 93-9 Application of FASB Statement No. 109 in Foreign Financial Statements Restated for General
Price-Level Changes
EITF 93-10 Accounting for Dual Currency Bonds

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References

EITF 93-11 Accounting for Barter Transactions Involving Barter Credits

EITF 93-12 Recognition and Measurement of the Tax Benefit of Excess Tax-Deductible Goodwill
Resulting from a Retroactive Change in Tax Law
EITF 93-13 Effect of a Retroactive Change in Enacted Tax Rates That Is Included in Income from
Continuing Operations
EITF 93-14 Accounting for Multiple-Year Retrospectively Rated Insurance Contracts by Insurance
Enterprises and Other Enterprises
EITF 93-16 Application of FASB Statement No. 109 to Basis Differences within Foreign Subsidiaries That
Meet the Indefinite Reversal Criterion of APB Opinion No. 23
EITF 93-17 Recognition of Deferred Tax Assets for a Parent Company's Excess Tax Basis in the Stock of a
Subsidiary That Is Accounted for as a Discontinued Operation
EITF 93-18 Recognition of Impairment for an Investment in a Collateralized Mortgage Obligation
Instrument or in a Mortgage-Backed Interest-Only Certificate
EITF 94-1 Accounting for Tax Benefits Resulting from Investments in Affordable Housing Projects
EITF 94-2 Treatment of Minority Interests in Certain Real Estate Investment
EITF 94-3 Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)
EITF 94-4 Classification of an Investment in a Mortgage-Backed Interest-Only Certificate as Held-to-
Maturity
EITF 94-5 Determination of What Constitutes All Risks and Rewards and No Significant Unresolved
Contingencies in a Sale of Mortgage Loan Servicing Rights under Issue No. 89-5
EITF 94-6 Accounting for the Buyout of Compensatory Stock Options
EITF 94-7 Accounting for Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock
EITF 94-8 Accounting for Conversion of a Loan into a Debt Security in a Debt Restructuring
EITF 94-9 Determining a Normal Servicing Fee Rate for the Sale of an SBA Loan
EITF 94-10 Accounting by a Company for the Income Tax Effects of Transactions among or with Its
Shareholders under FASB Statement No.109
EITF 95-1 Revenue Recognition on Sales with a Guaranteed Minimum Resale Value
EITF 95-2 Determination of What Constitutes a Firm Commitment for Foreign Currency Transactions
Not Involving a Third Party
EITF 95-3 Recognition of Liabilities in Connection with a Purchase Business Combination
EITF 95-4 Revenue Recognition on Equipment Sold and Subsequently Repurchased Subject to an
Operating Lease
EITF 95-5 Determination of What Risks and Rewards, If Any, Can Be Retained and Whether Any
Unresolved Contingencies May Exist in a Sale of Mortgage Loan Servicing Rights
EITF 95-6 Accounting by a Real Estate Investment Trust for an Investment in a Service Corporation
EITF 95-7 Implementation Issues Related to the Treatment of Minority Interests in Certain Real Estate
Investment Trusts
EITF 95-8 Accounting for Contingent Consideration Paid to the Shareholders of an Acquired Enterprise
in a Purchase Business Combination
EITF 95-9 Accounting for Tax Effects of Dividends in France in Accordance with FASB Statement No.
109
EITF 95-10 Accounting for Tax Credits Related to Dividend Payments in Accordance with FASB
Statement No. 109
EITF 95-11 Accounting for Derivative Instruments Containing both a Written Option-Based Component
and a Forward-Based Component
EITF 95-12 Pooling of Interests with a Common Interest in a Joint Venture
EITF 95-13 Classification of Debt Issue Costs in the Statement of Cash Flows
EITF 95-14 Recognition of Liabilities in Anticipation of a Business Combination
EITF 95-15 Recognition of Gain or Loss When a Binding Contract Requires a Debt Extinguishment to
Occur at a Future Date for a Specified Amount
EITF 95-16 Accounting for Stock Compensation Arrangements with Employer Loan Features under APB
Opinion No. 25
EITF 95-17 Accounting for Modifications to an Operating Lease That Do Not Change the Lease
Classification
EITF 95-18 Accounting and Reporting for a Discontinued Business Segment When the Measurement Date
Occurs after the Balance Sheet Date but before the Issuance of Financial Statements
EITF 95-19 Determination of the Measurement Date for the Market Price of Securities Issued in a
Purchase Business Combination
EITF 95-20 Measurement in the Consolidated Financial Statements of a Parent of the Tax Effects Related
to the Operations of a Foreign Subsidiary That Receives Tax Credits Related to Dividend
Payments

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References

EITF 95-21 Accounting for Assets to Be Disposed Of Acquired in a Purchase Business Combination
EITF 95-22 Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements
That Include both a Subjective Acceleration Clause and a Lock-Box Arrangement
EITF 95-23 The Treatment of Certain Site Restoration/Environmental Exit Costs When Testing a Long-
Lived Asset for Impairment
EITF 96-1 Sale of Put Options on Issuer’s Stock That Require or Permit Cash Settlement
EITF 96-2 Impairment Recognition When a Nonmonetary Asset Is Exchanged or Is Distributed to
Owners and Is Accounted for at the Asset’s Recorded Amount
EITF 96-3 Accounting for Equity Instruments That Are Issued for Consideration Other Than Employee
Services under FASB Statement No.123
EITF 96-4 Accounting for Reorganizations Involving a Non-Pro Rata Split-off of Certain Nonmonetary
Assets to Owners
EITF 96-5 Recognition of Liabilities for Contractual Termination Benefits or Changing Benefit Plan
Assumptions in Anticipation of a Business Combination
EITF 96-6 Accounting for the Film and Software Costs Associated with Developing Entertainment and
Educational Software Products
EITF 96-7 Accounting for Deferred Taxes on In-Process Research and Development Activities Acquired
in a Purchase Business Combination
EITF 96-8 Accounting for a Business Combination When the Issuing Company Has Targeted Stock
EITF 96-9 Classification of Inventory Markdowns and Other Costs Associated with a Restructuring
EITF 96-10 Impact of Certain Transactions on the Held-to-Maturity Classification under FASB Statement
No. 115
EITF 96-11 Accounting for Forward Contracts and Purchased Options to Acquire Securities Covered by
FASB Statement No. 115
EITF 96-12 Recognition of Interest Income and Balance Sheet Classification of Structured Notes
EITF 96-13 Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company’s Own Stock
EITF 96-14 Accounting for the Costs Associated with Modifying Computer Software for the Year 2000
EITF 96-15 Accounting for the Effects of Changes in Foreign Currency Exchange Rates on Foreign-
Currency-Denominated Available-for-Sale Debt Securities
EITF 96-16 Investor’s Accounting for an Investee When the Investor Has a Majority of the Voting Interest
but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights
EITF 96-17 Revenue Recognition under Long-Term Power Sales Contracts That Contain both Fixed and
Variable Pricing Terms
EITF 96-18 Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
or in Conjunction with Selling, Goods or Services
EITF 96-19 Debtor’s Accounting for a Modification or Exchange of Debt Instruments
EITF 96-20 Impact of FASB Statement No. 125 on Consolidation of Special-Purpose Entities
EITF 96-21 Implementation Issues in Accounting for Leasing Transactions involving Special-Purpose
Entities
EITF 96-22 Applicability of the Disclosures Required by FASB Statement No. 114 When a Loan Is
Restructured in a Troubled Debt Restructuring into Two (or More) Loans
EITF 96-23 The Effect of Financial Instruments Indexed to, and Settled in, a Company’s Own Stock on
Pooling-of-Interests Accounting for a Subsequent Business Combination
EITF 97-1 Implementation Issues in Accounting for Lease Transactions, including Those involving
Special-Purpose Entities
EITF 97-2 Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician Practice
Management Entities and Certain Other Entities with Contractual Management Arrangements
EITF 97-3 Accounting for Fees and Costs Associated with Loan Syndications and Loan Participations
after the Issuance of FASB Statement No. 125
EITF 97-4 Deregulation of the Pricing of Electricity---Issues Related to the Application of FASB
Statements No. 71 and 101
EITF 97-5 Accounting for the Delayed Receipt of Option Shares upon Exercise under APB Opinion No.
25
EITF 97-6 Application of Issue No. 96-20 to Qualifying Special-Purpose Entities Receiving Transferred
Financial Assets Prior to the Effective Date of FASB Statement No. 125
EITF 97-7 Accounting for Hedges of the Foreign Currency Risk Inherent in an Available-for-Sale
Marketable Equity Security
EITF 97-8 Accounting for Contingent Consideration Issued in a Purchase Business Combination
EITF 97-9 Effect on Pooling-of-Interests Accounting of Certain Contingently Exercisable Options or
Other Equity Instruments
EITF 97-10 The Effect of Lessee Involvement in Asset Construction
EITF 97-11 Accounting for Internal Costs Relating to Real Estate Property Acquisitions

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EITF 97-12 Accounting for Increased Share Authorizations in an IRS Section 423 Employee Stock
Purchase Plan under APB Opinion No. 25
EITF 97-13 Accounting for Costs Incurred in Connection with a Consulting Contract or an Internal Project
That Combines Business Process Reengineering and Information Technology Transformation
EITF 97-14 Accounting for Deferred Compensation Arrangements Where Amounts Earned Are Held in a
Rabbi Trust and Invested
EITF 97-15 Accounting for Contingency Arrangements Based on Security Prices in a Purchase Business
Combination
EITF 98-1 Valuation of Debt Assumed in a Purchase Business Combination
EITF 98-2 Accounting by a Subsidiary or Joint Venture for an Investment in the Stock of Its Parent
Company or Joint Venture Partner
EITF 98-3 Determining Whether a Transaction Is an Exchange of Similar Productive Assets or a Business
Combination
EITF 98-4 Accounting by a Joint Venture for Businesses Received at Its Formation
EITF 98-5 Accounting for Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios
EITF 98-6 Investor's Accounting for an Investment in a Limited Partnership When the Investor Is the
Sole General Partner and the Limited Partners Have Certain Approval or Veto Rights
EITF 98-7 Accounting for Exchanges of Similar Equity Method Investments
EITF 98-8 Accounting for Transfers of Investments That Are in Substance Real Estate
EITF 98-9 Accounting for Contingent Rent
EITF 98-10 Accounting for Contracts Involved in Energy Trading and Risk Management Activities
EITF 98-11 Accounting for Acquired Temporary Differences in Certain Purchase Transactions That Are
Not Accounted for as Business Combinations
EITF 98-12 Application of Issue No. 96-13 to Forward Equity Sales Transactions
EITF 98-13 Accounting by an Equity Method Investor for Investee Losses When the Investor Has Loans to
and Investments in Other Securities of the Investee
EITF 98-14 Debtor's Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements
EITF 98-15 Structured Notes Acquired for a Specified Investment Strategy
EITF 99-1 Accounting for Debt Convertible into the Stock of a Consolidated Subsidiary
EITF 99-2 Accounting for Weather Derivatives
EITF 99-3 Application of Issue No. 96-13 to Derivative Instruments with Multiple Settlement
Alternatives
EITF 99-4 Accounting for Stock Received from the Demutualization of a Mutual Insurance Company
EITF 99-5 Accounting for Pre-Production Costs Related to Long-Term Supply Arrangements
EITF 99-6 Impact of Acceleration Provision in Grants Made between Initiation and Consummation of a
Pooling-of-Interests Business Combination"
EITF 99-7 Accounting for an Accelerated Share Repurchase Program
EITF 99-8 Accounting for Transfers of Assets That Are Derivative Instruments but That Are Not
Financial Assets
EITF 99-9 Effect of Derivative Gains and Losses on the Capitalization of Interest
EITF 99-10 Percentage Used to Determine the Amount of Equity Method Losses
EITF 99-11 Subsequent Events Caused by Year 2000
EITF 99-12 Accounting for Formula Arrangements under Issue No. 95-19
EITF 99-13 Application of Issue No. 97-10 and FASB Interpretation No. 23 to Entities That Enter into
Leases with Governmental Entities
EITF 99-14 Recognition of Losses on Firmly Committed Executory Contracts
EITF 99-15 Accounting for Decreases in Deferred Tax Asset Valuation Allowances Established in a
Purchase Business Combination As a Result of a Change in Tax Regulations
EITF 99-16 Accounting for Transactions with Elements of Research and Development Arrangements
EITF 99-17 Accounting for Advertising Barter Transactions
EITF 99-18 Effect on Pooling-of-Interests Accounting of Contracts Indexed to a Company's Own Stock
EITF 99-19 Reporting Revenue Gross as a Principal versus Net as an Agent
EITF 99-20 Recognition of Interest Income and Impairment on Certain Investments: Other Technical
Matters
EITF 00-1: Investor Balance Sheet and Income Statement Display under the Equity Method for
Investments in Certain Partnerships and Other Ventures
EITF 00-2: Accounting for Web Site Development Costs
EITF 00-3: Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to
Use Software Stored on Another Entity's Hardware
EITF 00-4: Majority Owner's Accounting for a Transaction in the Shares of a Consolidated Subsidiary and
a Derivative Indexed to the Minority Interest in That Subsidiary
EITF 00-5: Determining Whether a Nonmonetary Transaction Is an Exchange of Similar Productive Assets

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EITF 00-6: Accounting for Freestanding Derivative Financial Instruments Indexed to, and Potentially
Settled in, the Stock of a Consolidated Subsidiary
EITF 00-7: Application of Issue No. 96-13 to Equity Derivative Instruments That Contain Certain
Provisions That Require Net Cash Settlement if Certain Events Outside the Control of the
Issuer Occur
EITF 00-8: Accounting by a Grantee for an Equity Instrument to Be Received in Conjunction with
Providing Goods or Services
EITF 00-9: Classification of a Gain or Loss from a Hedge of Debt That Is Extinguished
EITF 00-10: Accounting for Shipping and Handling Fees and Costs
EITF 00-11: Meeting the Ownership Transfer Requirements of FASB Statement No. 13 for Leases of Real
Estate
EITF 00-12: Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity
Method Investee
EITF 00-13: Determining Whether Equipment Is "Integral Equipment" Subject to FASB Statements No. 66
and No. 98
EITF 00-14: Accounting for Certain Sales Incentives
EITF 00-15: Classification in the Statement of Cash Flows of the Income Tax Benefit Received by a
Company upon Exercise of a Nonqualified Employee Stock Option
EITF 00-16: Recognition and Measurement of Employer Payroll Taxes on Employee Stock-Based
Compensation
EITF 00-17: Measuring the Fair Value of Energy-Related Contracts in Applying Issue No. 98-10
EITF 00-18: Accounting Recognition for Certain Transactions involving Equity Instruments Granted to
Other Than Employees
EITF 00-19: Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock
EITF 00-20: Accounting for Costs Incurred to Acquire or Originate Information for Database Content and
Other Collections of Information
EITF 00-21: Accounting for Revenue Arrangements with Multiple Deliverables
EITF 00-22: Accounting for "Points" and Certain Other Time-Based or Volume-Based Sales Incentive
Offers, and Offers for Free Products or Services to Be Delivered in the Future
EITF 00-23: Issues Related to the Accounting for Stock Compensation under APB Opinion No. 25 and
FASB Interpretation No. 44
EITF 00-24: Revenue Recognition: Sales Arrangements That Include Specified-Price Trade-in Rights
EITF 00-25: Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor's
Products
EITF 00-26: Recognition by a Seller of Losses on Firmly Committed Executory Contracts
EITF 00-27: Application of Issue No. 98-5 to Certain Convertible Instruments
EITF 01-1: Accounting for a Convertible Instrument Granted or Issued to a Nonemployee for Goods or
Services or a Combination of Goods or Services and Cash
EITF 01-2: Interpretations of APB Opinion No. 29
EITF 01-3: Accounting in a Purchase Business Combination for Deferred Revenue of an Acquiree
EITF 01-4: Accounting for Sales of Fractional Interests in Equipment
EITF 01-5: Application of FASB Statement No. 52 to an Investment Being Evaluated for Impairment That
Will Be Disposed Of
EITF 01-10 Accounting for the Impact of the Terrorist Attacks of September 11, 2001 (September Meeting
Minutes)
EITF 01-11: Application of EITF Issue No. 00-19 “Accounting for Derivative Financial Instruments
Indexed to , and Potentially Settled in, a Company’s Own Stock, “to a Contemporaneous
Forward Purchase Contract and Written Put Option”
EITF 01-12: The impact of requirements of FASB Statement no. 133, “Accounting for Derivative
Instruments and Hedging Activities” on Residual Value Guarantees in Connection with a
Lease.
EITF 01-13: Income Display of Business Interruption Insurance Recoveries
EITF 02-2: When Separate Contracts That Meet the Definition of Financial Instruments Should Be
Combined For Accounting Purposes.
EITF 02-3: Recognition and Reporting of Gains and Losses on Energy Trading Contracts under EITF
Issues no. 98-10
EITF 02-4: Debtor's Accounting for a Modification or an Exchange of Debt Instruments in Accordance
with FASB Statement No. 15, Accounting by Debtors and Creditors for Troubled Debt
Restructurings
EITF 02-5: Definition of "Common Control" in Relation to FASB Statement No. 141, Business
Combinations
EITF 02-6 Classification in the Statement of Cash Flows of Payments Made to Settle an Asset Retirement

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Obligation within the Scope of FASB Statement No. 143, Accounting for Asset Retirement
Obligations
EITF 02-7: Unit of Accounting for Testing Impairment of Indefinite-Lived Intangible Assets
EITF 02-8: Accounting for Options Granted to Employees in Unrestricted, Publicly Traded Shares of an
Unrelated Entity
EITF 02-10: Determining Whether a Debtor Is Legally Released as Primary Obligor When the Debtor
Becomes Secondarily Liable under the Original Obligation
EITF 02-12 Permitted Activities of a Qualifying Special-Purpose Entity in Issuing Beneficial Interests
under FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities
EITF D-1 Implications and Implementation of an EITF Consensus
EITF D-2 Applicability of FASB Statement No. 65 to Savings and Loan Associations
EITF D-3 International Loan Swaps
EITF D-4 Argentine Government Guarantee of U.S. Dollar-Denominated Loans to the Argentine Private
Sector
EITF D-5 Extraordinary Treatment Related to Abandoned Nuclear Power Plants
EITF D-6 Income Capital Certificates and Permanent Income Capital Certificates
EITF D-7 Adjustment of Deferred Taxes to Reflect Change in Income Tax Rate
EITF D-8 Accruing Bad Debt Expense at Inception of a Lease
EITF D-9 Lessor Accounting under FASB Statement No. 91
EITF D-10 Required Use of Interest Method in Recognizing Interest Income
EITF D-11 Impact of Stock Market Decline
EITF D-12 Foreign Currency Translation--Selection of Exchange Rate When Trading Is Temporarily
Suspended
EITF D-13 Transfers of Receivables in Which Risk of Foreign Currency Fluctuation Is Retained
EITF D-14 Transactions involving Special-Purpose Entities
EITF D-15 Earnings-per-Share Presentation for Securities Not Specifically Covered by APB Opinion No.
15
EITF D-16 Hedging Foreign Currency Risks of Future Net Income, Revenues, or Costs
EITF D-17 Continued Applicability of the FASB Special Report on Implementation of Statement 96
EITF D-18 Accounting for Compensation Expense If Stock Appreciation Rights Are Cancelled
EITF D-19 Impact on Pooling-of-Interests Accounting of Treasury Shares Acquired to Satisfy
Conversions in a Leveraged Preferred Stock ESOP
EITF D-20 Disclosure of Components of Deferred Tax Expense
EITF D-21 Phase-in Plans When Two Plants Are Completed at Different Times but Share Common
Facilities
EITF D-22 Questions Related to the Implementation of FASB Statement No. 105
EITF D-23 Subjective Acceleration Clauses and Debt Classification
EITF D-24 Sale-Leaseback Transactions with Continuing Involvement
EITF D-25 Application of APB Opinion No. 10, Paragraph 7, to Market Values Recognized for Off-
Balance-Sheet Financial Instruments
EITF D-26 SEC Disclosure Requirements Prior to Adoption of Standard on Accounting for Postretirement
Benefits Other Than Pensions
EITF D-27 Accounting for the Transfer of Excess Pension Assets to a Retiree Health Care Benefits
Account
EITF D-28 SEC Disclosure Requirements Prior to Adoption of Standard on Accounting for Income Taxes
EITF D-29 Implementation of FASB Statement No. 107
EITF D-30 Adjustment Due to Effect of a Change in Tax Laws or Rates
EITF D-31 Temporary Differences Related to LIFO Inventory and Tax-to-Tax Differences
EITF D-32 Intraperiod Tax Allocation of the Tax Effect of Pretax Income from Continuing Operations
EITF D-33 Timing of Recognition of Tax Benefits for Pre-reorganization Temporary Differences and
Carryforwards
EITF D-34 Accounting for Reinsurance: Questions and Answers about FASB Statement No. 113
EITF D-35 FASB Staff Views on Issue No. 93-6, "Accounting for Multiple-Year Retrospectively Rated
Contracts by Ceding and Assuming Enterprises"
EITF D-36 Selection of Discount Rates Used for Measuring Defined Benefit Pension Obligations and
Obligations of Postretirement Benefit Plans Other Than Pensions
EITF D-37 Classification of In-Substance Foreclosed Assets
EITF D-38 Reclassification of Securities in Anticipation of Adoption of FASB Statement No. 115
EITF D-39 Questions Related to the Implementation of FASB Statement No. 115
EITF D-40 Planned Sale of Securities following a Business Combination Expected to Be Accounted for as
a Pooling of Interests
EITF D-41 Adjustments in Assets and Liabilities for Holding Gains and Losses as Related to the

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Implementation of FASB Statement No. 115

EITF D-42 The Effect on the Calculation of Earnings per Share for the Redemption or Induced
Conversion of Preferred Stock
EITF D-43 Assurance That a Right of Setoff Is Enforceable in a Bankruptcy under FASB Interpretation
No. 39
EITF D-44 Recognition of Other-Than-Temporary Impairment upon the Planned Sale of a Security
Whose Cost Exceeds Fair Value
EITF D-45 Implementation of FASB Statement No. 121 for Assets to Be Disposed Off
EITF D-46 Accounting for Limited Partnership Investments
EITF D-47 Accounting for the Refund of Bank Insurance Fund and Savings Association Insurance Fund
Premiums
EITF D-48 The Applicability of FASB Statement No. 65 to Mortgage-Backed Securities That Are Held-
to-Maturity
EITF D-49 Classifying Net Appreciation on Investments of a Donor-Restricted Endowment Fund
EITF D-50 Classification of Gains and Losses from the Termination of an Interest Rate Swap Designated
to Commercial Paper
EITF D-51 The Applicability of FASB Statement No. 115 to Desecuritizations of Financial Assets
EITF D-52 Impact of FASB Statement No. 125 on EITF Issues
EITF D-53 Computation of Earnings per Share for a Period That Includes a Redemption or an Induced
Conversion of a Portion of a Class of Preferred Stock
EITF D-54 Accounting by the Purchaser for a Seller’s Guarantee of the Adequacy of Liabilities for Losses
and Loss Adjustment Expenses of an Insurance Enterprise Acquired in a Purchase Business
Combination
EITF D-55 Determining a Highly Inflationary Economy under FASB Statement No. 52
EITF D-56 Accounting for a Change in Functional Currency and Deferred Taxes When an Economy
Becomes Highly Inflationary
EITF D-57 Accounting Issues Relating to the Deposit Insurance Funds Act of 1996
EITF D-58 Effect on Pooling-of-Interests Accounting of Certain Contingently Exercisable Options to Buy
Equity Securities
EITF D-59 Payment of a Termination Fee in Connection with a Subsequent Business Combination That Is
Accounted for Using the Pooling-of-Interests Method
EITF D-60 Accounting for the Issuance of Convertible Preferred Stock and Debt Securities with a
Nondetachable Conversion Feature
EITF D-61 Classification by the Issuer of Redeemable Instruments That Are Subject to Remarketing
Agreements
EITF D-62 Computing Year-to-Date Diluted Earnings per Share under FASB Statement No. 128
EITF D-63 Call Options “Embedded” in Beneficial Interests Issued by a Qualifying Special-Purpose
Entity
EITF D-64 Accounting for Derivatives Used to Hedge Interest Rate Risk
EITF D-65 Maintaining Collateral in Repurchase Agreements and Similar Transactions under FASB
Statement No. 125
EITF D-66 Effect of a Special-Purpose Entity's Powers to Sell, Exchange, Repledge, or Distribute
Transferred Financial Assets under FASB Statement No. 125
EITF D-67 Isolation of Assets Transferred by Financial Institutions under FASB Statement No. 125
EITF D-68 Accounting by an Equity Method Investor for Investee Losses When the Investor Has Loans to
and Investments in Other Securities of an Investee
EITF D-69 Gain Recognition on Transfers of Financial Assets under FASB Statement No. 125
EITF D-70 Questions Related to the Implementation of FASB Statement No. 131
EITF D-71 Accounting Issues Relating to the Introduction of the European Economic and Monetary
Union (EMU)
EITF D-72 Effect of Contracts That May Be Settled in Stock or Cash on the Computation of Diluted
Earnings per Share
EITF D-73 Reclassification and Subsequent Sales of Securities in Connection with the Adoption of FASB
Statement No. 133
EITF D-74 Issues Concerning the Scope of the AICPA Guide on Investment Companies
EITF D-75 When to Recognize Gains and Losses on Assets Transferred to a Qualifying Special-Purpose
Entity
EITF D-76 Accounting by Advisors for Offering Costs Paid on Behalf of Funds When the Advisor Does
Not Receive both 12b-1 Fees and Contingent Deferred Sales Charges
EITF D-77 Accounting for Legal Costs Expected to Be Incurred in Connection with a Loss Contingency
EITF D-78 Accounting for Supervisory Goodwill Litigation Awards or Settlements
EITF D-79 Accounting for Retroactive Insurance Contracts Purchased by Entities Other Than Insurance
Enterprises

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References

EITF D-80 Application of FASB Statements No. 5 and No. 114 to a Loan Portfolio
EITF D-81 Accounting for the Acquisition of Consolidated Businesses
EITF D-82 Effect of Preferred Stock Dividends Payable in Common Shares on Computation of Income
Available to Common Stockholders
EITF D-83 Accounting for Payroll Taxes Associated with Stock Option Exercises
EITF D-83 Accounting for Payroll Taxes Associated with Stock Option Exercises
EITF D-84 Accounting for Subsequent Investments in an Investee After Suspension of Equity Method
Loss Recognition When an Investor Increases Its Ownership Interest from Significant
Influence to Control Through a Market Purchase of Voting Securities
EITF D-85 Application of Certain Transition Provisions in SEC Staff Accounting Bulletin No. 101
EITF D-86 Issuance of Financial Statements
EITF D-87 Determination of the Measurement Date for Consideration Given by the Acquirer in a
Business Combination when That Consideration Is Securities Other Than Those Issued by the
Acquirer
EITF D-88 Planned Major Maintenance Activities
EITF D-89 Accounting for Costs of Future Medicare Compliance Audits
EITF D-90 Grantor Balance Sheet Presentation of Unvested, Forfeitable Equity Instruments Granted to a
Nonemployee
EITF D-91 Application of APB Opinion No. 25 and FASB Interpretation No. 44 to an Indirect Repricing
of a Stock Option
EITF D-92 The Effect of FASB Statement No. 135 on the Measurement and Recognition of Net Periodic
Benefit Cost under FASB Statements No. 87 and No. 106
EITF D-93 Accounting for the Rescission of the Exercise of Employee Stock Options
EITF D-94 Questions and Answers Related to the Implementation of FASB Statement No. 140
EITF D-95 Effect of Participating Convertible Securities on the Computation of Basic Earnings per Share
EITF D-96 Accounting for Management Fees Based on a Formula
EITF D-97 Push-Down Accounting
EITF D-98 Classification and Measurement of Redeemable Securities
EITF D-99 Questions and Answers Related to Servicing Activities in a Qualifying Special-Purpose Entity
under FASB Statement No. 140
EITF D-99 Questions and Answers Related to Servicing Activities in a Qualifying Special-Purpose Entity
under FASB Statement No. 140
EITF D-100 Clarification of Paragraph 61(b) of FASB Statement No. 141 and
EITF D-101 Clarification of Reporting Unit Guidance in Paragraph 30 of FASB Statement No. 142
EITF D-102 Documentation of the Methods Used to Measure Hedge Ineffectiveness under FASB Statement
No. 133
EITF D-103 Income Statement Characterization of Reimbursements Received for "Out-of-Pocket"
Expenses Incurred
EITF D-104 Clarification of Transition Guidance in Paragraph 51 of FASB Statement No. 144
EITF D-105 Accounting in Consolidation for Energy Trading Contracts between Affiliated Entities When
the Activities of One but Not Both Affiliates Are within the Scope of EITF Issue No. 98-10,
"Accounting for Contracts Involved in Energy Trading and Risk Management Activities"

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