Accounting Disclosure Checklist – Annual (12/10

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Entity Year End

Prepared by

Date

Purpose The Accounting Disclosure Checklist is designed to serve as a “memory jogger” of financial statement disclosures. As a memory jogger, the this disclosure checklist does not replace the preparer’s judgment in determining necessary disclosures. Refer to applicable literature for detailed disclosure requirements. Applicability This disclosure checklist is useful when preparing financial statements in conformity with generally accepted accounting principles (GAAP) in the United States of America, except compiled financial statements that omit substantially all disclosures and the financial statements of the following plans/entities: The financial statements of employee benefit plans. The financial statements of state and local governmental entities. The financial statements of certain U.S. Government entities. The disclosure checklist is designed to address current-year disclosure requirements. In situations where new standards or other literature replace previous literature, prior-year disclosures made pursuant to prioryear requirements should not be changed or deleted unless explicitly required in the new standard or literature. The disclosure checklist is designed to follow the topical structure of The FASB Accounting Standard Codification™ and contains much of the original Codification language to provide the user with the most relevant information available and limit the need to refer back to the actual Codification. Certain disclosures included in the checklist are required to be disclosed, if applicable, in the financial statements of entities subject to SEC reporting requirements (including SEC Observer comments relating to EITF issues) that are prepared in conformity with GAAP pursuant to the Securities and Exchange Commission’s Proxy Rules (Regulation 14A). The Proxy Rules incorporate Regulation S-X and certain sections of Regulation S-K. Therefore, items under sections labeled “SEC Guidance” cover the applicable sections of Regulation S-X, Regulation S-K, SEC Staff Accounting Bulletins, and other SEC staff guidance. Additionally, certain content from the Financial Accounting Standards Board (FASB) is applicable only to public entities (see definition below). Items that are identified as “SEC Guidance” or as applicable to public entities are not required to be disclosed by non-SEC registrants. All other disclosures included in the checklist (unless otherwise specifically indicated) are required to be disclosed, if applicable, in financial statements prepared in conformity with GAAP. Since the annual report to shareholders prepared under the annual Proxy Rules is often incorporated by reference into the Form 10-K, it is important to note the major differences between those financial statements required by Form 10-K and those required under the Proxy Rules (i.e., the rules that apply in
©2010 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Accounting Disclosure Checklist - Annual (12/10) Page 2 of 290 situations in which the solicitation of proxies is made in connection with an annual meeting of security holders, such as when directors are to be elected, and not when shareholders are voting on a business acquisition or other transaction requiring additional financial information). The Proxy Rules do not require separate financial statements of subsidiaries not consolidated and 50 percent-or-less-owned persons (S-X, Rule 3-09), financial statements of guarantors and issuers of guaranteed securities registered or being registered (S-X, Rule 3-10), financial statements of an inactive registrant (S-X, Rule 311), financial statements of affiliates whose securities collateralize an issue registered or being registered (S-X, Rule 3-16), or financial statement schedules (S-X, Article 12). Neither the Proxy Rules nor Form 10-K require separate financial statements of businesses acquired or to be acquired (S-X, Rule 3-05), or the pro forma financial information required by S-X, Article 11. A public entity, for the purpose of this checklist, unless otherwise noted, is a business entity or a not-forprofit entity that meets any of the following conditions: a. It has issued debt or equity securities or is a conduit bond obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local or regional markets). b. It is required to file financial statements with a stock exchange. c. It provides financial statements for the purpose of issuing any class of securities in a public market. A public entity in the context of ASC Topic 718, Compensation – Stock Compensation, and ASC Subtopic 470-20, Debt – Debt with Conversion and Other Options – Cash Conversion, includes any subsidiary of a public entity. Rules pertaining solely to regulated entities or specialized industries, such as financial institutions or oil and gas, are not included in this checklist. Although certain disclosures in this checklist are specifically for commercial and industrial public companies (as defined in Regulation S-X, Article 5 (Rule 5-01) (ASC paragraph 205-10-S99-5)), certain of the items included in this checklist may be applicable to other specialized industries.

©2010 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Accounting Disclosure Checklist - Annual (12/10) Page 3 of 290

Section I—Literature
The checklist includes coded references to certain firm and professional accounting literature. All literature listed below is available electronically in Accounting Research Online (ARO). This version of the Accounting Disclosure Checklist considers relevant information (as described in the “Purpose” on page 1) through December 2010. On July 1, 2009, the FASB launched its Accounting Standards Codification (ASC). Pursuant to FASB Statement No. 168, The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles, the Codification is the sole source of authoritative U.S. GAAP for interim and annual periods ending after September 15, 2009, except for rules and interpretive releases of the SEC, which are sources of authoritative GAAP for SEC registrants. For interim and annual periods ending after September 15, 2009, entities should refer to applicable Codification sections when citing specific guidance in U.S. GAAP in financial statements. References to legacy standards may continue to be used when there is no Codification reference (for example, “grandfathered” guidance). Additionally, it may be appropriate to refer to legacy standards when disclosing the adoption of a new accounting pronouncement, including a pronouncement to be adopted in a future reporting period, when the guidance in that pronouncement has not yet been codified or is included throughout one or more ASC topics that also contain guidance that was not affected by the accounting change. When citing specific SEC guidance in financial statements, entities should refer to the applicable SEC rule or regulation. Codification references should not be used for SEC guidance, even in periods ending after the Codification is effective. The Accounting Disclosure Checklist (12/10) includes only the references to the new Codification references, where applicable. Code ASC Issuer FASB Literature Considered in Checklist FASB Accounting Standards Codification Portions of the FASB Accounting Standards Codification™, copyright by Financial Accounting Foundation, 401 Merritt 7, Norwalk, CT 06856, have been reproduced with permission. Note: The FASB Accounting Standards Codification includes selected SEC and SEC Staff content for reference purposes by public companies. The Codification does not replace or affect how the SEC or SEC Staff issues or updates SEC content. The FASB ASC references that follow the SEC references in this document are included for information purposes only. ASU EITF SOP PB AU AR SFAS FASB EITF AcSEC AcSEC AICPA AICPA FASB FASB Accounting Standards Update EITF Abstracts (or draft ASUs) through December 17, 2010; in addition, minutes of meetings through December 17, 2010 AICPA Statements of Position AICPA Practice Bulletins U.S. Auditing Standards, Volume I of AICPA Professional Standards and/or the Auditing Standards of the PCAOB, where applicable Statements on Standards for Accounting and Review Services, Volume II of AICPA Professional Standards Statement of Financial Accounting Standards

©2010 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Accounting Disclosure Checklist - Annual (12/10) Page 4 of 290 FRR FIN FTB FSP SEC S-X S-K SAB ARB APB TPA PB SEC FASB FASB FASB SEC SEC SEC SEC FASB FASB AICPA AcSEC Codified Financial Reporting Releases, as contained in the 2010 SEC Rules and Regulations handbook FASB Interpretations FASB Technical Bulletins FASB Staff Positions Financial Reporting Manual; Speeches; Current Accounting and Disclosure Issues in the Division of Corporation Finance Regulation S-X, as contained in the 2010 SEC Rules and Regulations handbook Regulation S-K, as contained in the 2010 SEC Rules and Regulations handbook Staff Accounting Bulletins Accounting Research Bulletin Accounting Principles Board Opinions Technical Practice Aid AICPA Practice Bulletins

Financial statement preparers should consider disclosure requirements contained in literature issued subsequent to the most recent literature considered in the checklist. Additional information regarding financial statement disclosures is available in the following KPMG guides and resources on Accounting Research Online (ARO): Codification with KPMG Interpretations – (CKI) KPMG Accounting and Reporting Guide – US (KARG) Accounting for Business Combinations and Noncontrolling Interests: An Analysis of FASB Statements 141(R) (ASC Topic 805) and No. 160 (ASC Subtopic 810-10) (February 2010) SEC Financial Statement Requirements for Business Combinations (Second Edition) Business Combinations Handbook Volume III: Other Issues Related to Business Combinations Derivatives and Hedging Accounting Handbook (Updated 2010) (ASC Topic 815) FASB Derivatives Implementation Group: Final Resolutions, Including KPMG’s Observations and Handbook Revisions FAS 157 Q&A in KARG Chapter 70 Fair Value (ASC Subtopic 820-10) Quarterly Outlook Disclosures about Fair Value of Financial Instruments: A Discussion of FASB Statement 107 Implementation Issues (ASC Subtopic 825-10) Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity: An Analysis of Statement No. 150 (ASC Subtopic 480-10) Accounting for Income Taxes – An Analysis of FASB Statement 109 (Second Edition) (ASC Topic 740) FASB Statement No. 109 Question and Answers: A Supplement to KPMG’s Accounting for Income Taxes (Second Edition) – July 2009 (ASC Topic 740)
©2010 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Accounting Disclosure Checklist - Annual (12/10) Page 5 of 290 SEC Staff Accounting Bulletin No. 104 – Revenue Recognition (ASC paragraph 605-10-S99-1) Accounting for Revenue Arrangements with Multiple Deliverables: An Analysis of EITF Issue No. 00-21 (ASC Subtopic 605-25) Software Revenue Recognition: An Analysis of SOP 97-2 and Related Guidance (Third Edition) (ASC Subtopic 985-605) Share-Based Payment: An Analysis of Statement No. 123(R) (February 2008) (ASC Topic 718) Defining the Digital Future Guide to Accounting for Foreign Currency (ASC Topic 830) Consolidation of Variable Interest Entities: An Analysis of FASB Interpretation No. 46(R) (ASC Subtopic 810-10) Guide to Accounting for the Impairment or Disposal of Long-Lived Assets: An Analysis of FASB Statement 144 (ASC Subtopic 360-10) Accounting for Loan Fees and Costs: An Analysis of FASB Statement 91 (ASC Subtopic 310-20)

©2010 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Subtopic 215-10: Statement of Shareholder Equity— Overall—SEC Guidance 6. Subtopic 225-20: Income Statement—Extraordinary and Unusual Items 10. . a Swiss entity. Subtopic 255-10: Changing Prices—Overall 16. Subtopic 205-10: Presentation of Financial Statements— Overall—SEC Guidance 3. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).) 25 25 27 29 30 39 40 41 46 46 49 7.Annual (12/10) Page 6 of 290 Section II—Index to the Accounting Disclosure Checklist A. Page Ref. Subtopic 230-10: Statement of Cash Flows—Overall 12. 15 16 17 22 23 23 Category of Financial Reporting Considerations 1. a Delaware limited liability partnership and the U. Subtopic 210-20: Balance Sheet—Offsetting 5.Accounting Disclosure Checklist . Subtopic 220-10: Comprehensive Income—Overall (Note: An entity that has no items of other comprehensive income in any period presented is not required to report comprehensive income. Subtopic 225-10: Income Statement—Overall 8. Subtopic 260-10: Earnings per Share—Overall (required for public entities only) 17. Going Concern 14. All rights reserved. Subtopic 210-10: Balance Sheet—Overall – SEC Guidance 4. Subtopic 205-10: Presentation of Financial Statements— Overall 2. Subtopic 235-10: Notes to the Financial Statements— Overall 13. Subtopic 225-10: Income Statement—Overall—SEC Guidance 9. Subtopic 270-10: Interim Reporting—Overall (4th Quarter) (required for public entities only) Index to Checklist ©2010 KPMG LLP.S. Subtopic 225-30: Income Statement—Business Interruption Insurance 11. Subtopic 250-10: Accounting Changes and Error Corrections—Overall 15.

Subtopic 310-10: Receivables—Overall (after adoption of ASU 2010-20) 23. Life Settlement Contracts Subsection of Subtopic 325-30: Investments—Other—Investments in Insurance Contracts 33. 49 50 55 59 64 72 Category of Financial Reporting Considerations 18. Subtopic 280-10: Segment Reporting—Overall (required for public entities only) 21. Subtopic 310-30: Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality 26. Subtopic 340-10: Deferred Costs and Other Assets— Overall — SEC Guidance 73 73 75 76 83 86 87 87 89 92 ©2010 KPMG LLP.Accounting Disclosure Checklist . Subtopic 320-10: Investments—Debt and Equity Securities—Overall 28.S. Subtopic 310-20: Receivables—Nonrefundable Fees and Other Costs 25. a Delaware limited liability partnership and the U. Subtopic 330-10: Inventory—Overall 34. Subtopic 323-10: Investments—Equity Method and Joint Ventures—Overall Subtopic 323-740: Investments—Equity Method and Joint Ventures—Income Taxes 86 29.Annual (12/10) Page 7 of 290 Page Ref. a Swiss entity. Subtopic 310-10: Receivables—Overall (prior to the adoption of ASU 2010-20) 22. Subtopic 310-40: Receivables—Troubled Debt Restructurings by Creditors 27. Acquisitions. All rights reserved. . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Qualified Affordable Housing Project Investments Subsection of Subtopic 323-740: Investments—Equity Method and Joint Ventures—Income Taxes 30. and Construction (ADC) Arrangements Subsection of Subtopic 310-10: Receivables—Overall 24. Subtopic 272-10: Limited Liability Companies—Overall 19. Subtopic 325-20: Investments—Other—Cost Method Investments 31. Development. Subtopic 275-10: Risks and Uncertainties—Overall 20. Subtopic 325-30: Investments—Other—Investments in Insurance Contracts 32.

Annual (12/10) Page 8 of 290 Page Ref. a Delaware limited liability partnership and the U. and Equipment— Overall 40. Plant. a Swiss entity. Subtopic 405-30: Liabilities—Insurance-Related Assessments 44. .S. All rights reserved. Subtopic 410-30: Asset Retirement and Environmental Obligations—Environmental Obligations 46. and Equipment— Overall 41. Subtopic 350-20: Intangibles—Goodwill and Other— Goodwill 38. Subtopic 340-20: Deferred Costs and Other Assets— Capitalized Advertising Costs 36. Subtopic 450-30: Contingencies—Gain Contingencies 52. Subtopic 360-10: Property. Unconditional Purchase Obligations Subsection of Subtopic 440-10: Commitments—Overall 50. Subtopic 460-10: Guarantees—Overall 100 102 103 103 104 107 108 109 110 111 113 114 ©2010 KPMG LLP. Subtopic 420-10: Exit or Disposal Cost Obligations— Overall (Restructuring)—SEC Guidance 48. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Subtopic 450-20: Contingencies—Loss Contingencies 51. Subtopic 340-30: Deferred Costs and Other Assets— Insurance Contracts that Do Not Transfer Insurance Risks 37. Subtopic 405-20: Liabilities—Extinguishments of Liabilities 43.Accounting Disclosure Checklist . 92 92 93 96 98 99 Category of Financial Reporting Considerations 35. Plant. Subtopic 205-20: Presentation of Financial Statements— Discontinued Operations 42. Subtopic 350-30: Intangibles—Goodwill and Other— General Intangibles Other Than Goodwill 39. Subtopic 440-10: Commitments—Overall 49. Impairment or Disposal of Long-Lived Assets Subsection of Subtopic 360-10: Property. Subtopic 410-20: Asset Retirement and Environmental Obligations—Asset Retirement Obligations 45. Subtopic 420-10: Exit or Disposal Cost Obligations— Overall (Restructuring) 47.

Cash Conversion Subsection of Subtopic 470-20: Debt— Debt with Conversion and Other Options 57.Annual (12/10) Page 9 of 290 Page Ref. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Subtopic 605-15: Revenue Recognition—Products 69. Subtopic 470-10: Debt—Overall 55. Subtopic 605-20: Revenue Recognition—Services 70. Subtopic 505-10: Equity—Overall 63. EITF D-98) 62. Subtopic 505-50: Equity—Equity-Based Payments to Non-Employees 67.S. Subtopic 480-10: Distinguishing Liabilities from Equity— Overall—SEC Guidance (ASR 268. Subtopic 605-28: Revenue Recognition—Milestone Method (after adoption of ASU 2010-17) 143 146 ©2010 KPMG LLP. Subtopic 605-25: Revenue Recognition—Multiple Element Arrangements (after adoption of ASU 2009-13) 72. . Subtopic 470-60: Debt—Troubled Debt Restructurings by Debtors 60. a Delaware limited liability partnership and the U. All rights reserved. Subtopic 470-30: Debt—Participating Mortgage Loans 58. Subtopic 480-10: Distinguishing Liabilities from Equity— Overall (Statement 150 and related interpretations) 61.Accounting Disclosure Checklist . Subtopic 605-25: Revenue Recognition—Multiple Element Arrangements (prior to adoption of ASU 200913) 71. Subtopic 505-30: Equity—Treasury Stock 66. Subtopic 470-50: Debt—Modifications and Extinguishments 59. a Swiss entity. Subtopic 470-20: Debt—Debt with Conversion and Other Options 56. 115 116 119 121 122 122 123 124 127 132 135 138 139 139 139 140 142 143 Category of Financial Reporting Considerations 53. Product Warranties Subsection of Subtopic 460-10: Guarantees—Overall 54. Subtopic 505-10: Equity—Overall—SEC Guidance 64. Subtopic 605-10: Revenue Recognition—Overall 68. Subtopic 505-20: Equity—Stock Dividends and Stock Splits—SEC Guidance 65.

Pension and Other Postretirement Benefits Guidance (Subtopics 715-20. 715-30. 147 148 149 150 150 151 151 Category of Financial Reporting Considerations 73. and 715-60) That Applies to Public Entities Only 81. and 715-60) That Applies to Both Public and Nonpublic Entities 80. 715-30. .S. Subtopic 710-10: Compensation—General—Overall 78. Subtopic 605-40: Revenue Recognition—Gains and Losses 75. Pension and Other Postretirement Benefits Guidance (Subtopics 715-20. Subtopic 605-45: Revenue Recognition—Principal Agent Considerations 76. Medicare Prescription Drug. and 715-60) That Applies to Nonpublic Entities Only 82. Subtopic 605-50: Revenue Recognition—Customer Payments and Incentives 77.Accounting Disclosure Checklist .Annual (12/10) Page 10 of 290 Page Ref. a Swiss entity. Subtopic 718-40: Compensation—Stock Compensation— Employee Stock Ownership Plans 88. a Delaware limited liability partnership and the U. 715-30. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Subtopic 712-10: Compensation—Nonretirement Postemployment Benefits—Overall 79. Improvement. Pension and Other Postretirement Benefits Guidance (Subtopics 715-20. Subtopic 718-10: Compensation—Stock Compensation— Overall 86. and Modernization Act Subsection of Subtopic 715-60: Compensation—Retirement Benefits—Defined Benefit Plans—Other Postretirement 83. Subtopic 718-10: Compensation—Stock Compensation— Overall—SEC Guidance 87. Claims-Made Contracts Subsection of Subtopic 720-20: Other Expenses—Insurance Costs 153 159 163 164 164 165 170 171 173 ©2010 KPMG LLP. Subtopic 715-70: Compensation—Retirement Benefits— Defined Contribution Plans 84. Subtopic 715-80: Compensation—Retirement Benefits— Multiemployer Plans 85. All rights reserved. Subtopic 605-35: Revenue Recognition—ConstructionType and Production-Type Contracts 74.

Subtopic 815-35: Derivatives and Hedging—Net Investment Hedges 105. Subtopic 815-25: Derivatives and Hedging—Fair Value Hedging 103. 740-20. Subtopic 720-35: Other Expenses—Advertising Costs 90. Subtopic 820-10: Fair Value Measurements and Disclosures—Overall 190 191 192 197 203 215 216 217 218 218 220 ©2010 KPMG LLP.Accounting Disclosure Checklist . and 740-30) 94. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . Transactions Between Entities Under Common Control Subsection of Subtopic 805-50: Business Combinations— Related Issues 96. a Swiss entity. 173 173 174 174 174 182 189 Category of Financial Reporting Considerations 89. New Basis of Accounting (Pushdown) Subsection of Subtopic 805-50: Business Combinations—Related Issues—SEC Guidance 97. Subtopic 815-10: Derivatives and Hedging—Overall 101. Subtopic 730-20: Research and Development—Research and Development Arrangements 93. 805-20. Subtopic 815-15: Derivatives and Hedging—Embedded Derivatives 102.Annual (12/10) Page 11 of 290 Page Ref. Business Combinations (Subtopics 805-10. a Delaware limited liability partnership and the U. and 805-30) 95. Subtopic 808-10: Collaborative Arrangements—Overall 98. Income Taxes (Subtopics 740-10. Subtopic 720-50: Other Expenses—Fees Paid to the Federal Government by Pharmaceutical Manufacturers 91. Subtopic 815-40: Derivatives and Hedging—Contracts in Entity’s Own Equity 106. Subtopic 810-10: Consolidation—Overall 99. Variable Interest Entities Subsection of Subtopic 810-10: Consolidation—Overall 100. Subtopic 815-30: Derivatives and Hedging—Cash Flow Hedges 104.S. All rights reserved. Subtopic 730-10: Research and Development—Overall 92.

Accounting Disclosure Checklist . . Lessors Subsections of Topic 840: Leases 115. Subtopic 852-10: Reorganizations—Overall. a Swiss entity. (b) the entity’s total assets are less than $100 million on the date of the financial statements. Subtopic 860-20: Transfers and Servicing—Sales of Financial Assets 236 239 239 242 245 245 245 247 250 251 253 255 ©2010 KPMG LLP.S. Subtopic 825-20: Financial Instruments—Registration Payment Arrangements 110. Fair Vale Option Subsection of Subtopic 825-10: Financial Instruments—Overall 109. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Subtopic 825-10: Financial Instruments—Overall (Note: The disclosure guidance in this Subsection applies to all entities but is optional for an entity that meets all of the following criteria: (a) the entity is a nonpublic entity. Purchase and Sales of Inventory Subsection of Subtopic 845-10: Nonmonetary Transactions—Overall 117. Subtopic 860-10: Transfers and Servicing—Overall 122. Subtopic 830-30: Foreign Currency Matters—Translation of Financial Statements 112. Subtopic 845-10: Nonmonetary Transactions—Overall 116. Subtopic 852-20: Reorganizations—QuasiReorganizations 120. is accounted for as a derivative instrument under Topic 815 other than commitments related to the origination of mortgage loans to be held for sale during the reporting period. and (c) the entity has no instrument that. Subtopic 830-740: Foreign Currency Matters—Income Taxes 111. Subtopic 852-740: Reorganizations—Income Taxes 119. Subtopic 830-20: Foreign Currency Matters—Foreign Currency Transactions. Subtopic 835-20: Interest—Capitalization of Interest 113. Lessees and Real Estate Subsections of Topic 840: Leases 114. 226 Category of Financial Reporting Considerations 107. Subtopic 850-10: Related Party Disclosures—Overall 118.) 231 234 235 108. in whole or in part. a Delaware limited liability partnership and the U. Subtopic 855-10: Subsequent Events—Overall 121.Annual (12/10) Page 12 of 290 Page Ref.

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 2580 259 Category of Financial Reporting Considerations 123. Subtopic 860-50: Transfers and Servicing—Servicing Assets and Liabilities ©2010 KPMG LLP.S. All rights reserved. Subtopic 860-30: Transfers and Servicing—Secured Borrowing and Collateral 124. a Delaware limited liability partnership and the U. .Accounting Disclosure Checklist . a Swiss entity.Annual (12/10) Page 13 of 290 Page Ref.

Annual (12/10) Page 14 of 290 B. Research. and Other Not-for-Profits (HERON) Insurance Companies Investment Companies Management’s Discussion & Analysis Public Utilities Entities with Oil and Gas Producing Activities For other specialized industries.Accounting Disclosure Checklist .S. Index to Specialized Checklists The following specialized checklists address certain additional disclosures for selected specialized industries and supplement this Annual Disclosure Checklist (except for Accounting Disclosure Checklist – Employee Benefit Plans which substitutes for this checklist). . refer to Section IV of this disclosure checklist. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). There is also an Interim Accounting Disclosure Checklist which serves a s a “memory jogger” of the minimum disclosures in condensed interim financial information. ©2010 KPMG LLP. a Swiss entity. All rights reserved. a Delaware limited liability partnership and the U. Form Broker/Dealer Depository and Lending Institutions Health Care Higher Education.

Prior-year figures shown for comparative purposes shall in fact be comparable with those shown for the most recent period. Disclosure Implications of U. and the statement of changes in equity be presented for one or more preceding years. because of reclassifications or for other reasons. particularly those companies that offer post-employment benefits to employees. Health Care Reform: The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act (Reconciliation Act) were enacted in the first calendar quarter of 2010. as well as for the current year.06. If. KPMG & Other Guidance 1 2 Each page of the financial statements should be captioned. In addition. 3 4 ©2010 KPMG LLP. explanations. and accountants’ reports containing qualifications that appeared on the statements for the preceding years shall be repeated.13. in the comparative statements to the extent that they continue to be of significance.Annual (12/10) Page 15 of 290 Section III—Accounting Disclosure Checklist Applicability 1 Subtopic 205-10: Presentation of Financial Statements–Overall Presentation Note: See paragraphs 210-10-45-1 through 20-10-45-9 for guidance on classifying assets and liabilities as current and non-current in a classified balance sheet. changes have occurred in the manner of or basis for presenting corresponding items for two or more periods. a Delaware limited liability partnership and the U. information shall be furnished that will explain the change. In any one year it is ordinarily desirable that the statement of financial position. the income statement. Notes to financial statements. a Swiss entity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). All rights reserved. 205-10-45-3. Equity. .Accounting Disclosure Checklist . The new legislation is expected to affect companies across many industries. “Unaudited—see accompanying accountants’ report”. AU 558. For disclosure guidance on items that comprise shareholder’s equity.S.02–. Each page of unaudited financial statements and/or unaudited supplementary information should be captioned. see Topic 505.40. Disclosure 215-10-50-1. “See accompanying notes to (consolidated) financial statements. each page of compiled or reviewed financial statements and supplementary information should be captioned.” AU 504.S. 205-10-45-4. or at least referred to. > Comparative Financial Statements 205-10-45-2. AR 100. Any exceptions to comparability shall be clearly brought out as described in Topic 250. For non-public entities. “See accompanying accountants’ review (or compilation) report”. although many of the provisions of the new legislation do not take immediate effect. AU 551.03. > Changes Affecting Comparability 205-10-50-1.

Entities are also encouraged to describe the key judgments used to determine the accounting impacts and timing of when those impacts will be reflected in the financial statements. that. as appropriate: provided. All rights reserved.E. Present balance sheets as of the end of the two most recent fiscal years. Regulation S-X Rule 4-01(b).S. as a note to the financial statements). Rule 3-01. or at an appropriate point in narrative material. Regulation S-X. Financial statement disclosures may include a summary of the known or anticipated accounting impacts and a description of when those impacts will be reflected in the entity’s financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 2 Subtopic 205-10: Presentation of Financial Statements–Overall—SEC Guidance > Form and Order of Financial Statements > > Presentation of Amounts 1 2 3 Regulation S-X. See Section 41. 4 > Supplemental Schedules 6 Regulation S-X Rule 5-04(c). Entities that have determined the amount and timing of the financial statement impacts of the new legislation should also consider describing those impacts and timing. Present statements of stockholders’ equity for each period an income statement is required to be filed (alternatively. 5 SAB Topic 11. Negative amounts (red figures) shall be shown in a manner which clearly distinguishes the negative attribute. a Delaware limited liability partnership and the U. Note: Subtopic 205-20: Presentation of Financial Statements—Discontinued Operations now appears immediately after Subtopic 360-10. at the top of the money columns. All money amounts required to be shown in financial statements may be expressed in whole dollars or multiples thereof. when stated in other than whole dollars. Regulation S-X. a. a Swiss entity. Financial statements and other data read consistently from left to right in same chronological order. . ©2010 KPMG LLP. if significant.Accounting Disclosure Checklist . Present statements of income and cash flows for each of the three most recent fiscal years. b. an indication to that effect is inserted immediately beneath the caption of the statement or schedule. see Item 303 of Regulation S-K). Rule 3-04. for requirements for Supplemental Schedules I – V. Rule 3-02.Annual (12/10) Page 16 of 290 companies that may be affected by the legislation should consider disclosing information about the effects of the legislation in annual and interim financial statements (public companies should also consider disclosing certain information outside of the financial statements concerning possible future effects and consequences of the new legislation. Entities that have not yet determined the amount or timing (or both) of the financial statement impacts of the new legislation should consider disclosing that fact and state the key reasons why the impacts or timing (or both) are not yet determinable.

d. All rights reserved. b.c.02. Rules 3-01 and 3-02. e. b. the information is properly summarized. the financial statements. the change should be disclosed. when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recent fiscal year. Separate disclosure of cash or cash items restricted as to withdrawal or use. Schedule V—Supplemental Information Concerning Property-Casualty Insurance Operations Registrant as of the date and for the periods specified by S-X. Schedule IV—Mortgage Loans on Real Estate as of the date and for the periods specified in the schedule. Balance Sheets. Schedule III—Real Estate and Accumulated Depreciation as of the date of the most recent balance sheet. If the terms of arrangements require balance sheet segregation.S. Schedule II—Valuation and Qualifying Accounts for each period for which an audited income statement is required. a Swiss entity. c. 1 FRR 203. Describe in the notes to financial statements arrangements and amounts. ASSETS AND OTHER DEBITS Current Assets. Schedule I—Condensed Financial Information of Registrant as of the date and for the periods specified by S-X. if the change in the arrangements from one period to the next is so great as to constitute a fact of unusual significance to the investor in appraising the company. including contractual compensating balances. when appropriate 1 Cash and cash items. In addition. Rules 3-01 and 3-02 when a registrant. however. this should be reflected in all balance sheets presented. In general. d. if determinable. a. and the statements are not unclear or confusing. or 50 percent-orless-owned equity-basis investees have liabilities for property-casualty insurance claims. The information required in the above schedules may be furnished in a single schedule. Describe provisions of restrictions in the notes to financial statements. e.Accounting Disclosure Checklist . If the registrant information is shown separately.iv. of compensating balance arrangements that exist but are not agreements that legally restrict the use of cash amounts. 3 Subtopic 210-10: Balance Sheet—Overall—SEC Guidance Regulation S-X Rule 5-02. . including amount and ©2010 KPMG LLP. or a footnote. a Delaware limited liability partnership and the U. f. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). c. Describe in the notes to financial statements compensating balances maintained under an agreement to ensure future credit availability.Annual (12/10) Page 17 of 290 a. compensating balance arrangements should only be disclosed for the latest fiscal year and later interim period for which financial statements are presented. its subsidiaries. Pledges or restrictions.

Inventories. a Delaware limited liability partnership and the U. state. All rights reserved. Amounts representing the recognized sales value of performance and such amounts that had not been billed and were not billable to customers at the date of the balance sheet. state separately in the balance sheet or in a note to the financial statements the following amounts: 1 2 Balances billed but not paid by customers under retainage provisions in contracts. 2 Marketable securities. for accounts receivable and notes receivable. If receivables include amounts due under long-term contracts. The accounting and disclosure requirements for current marketable equity securities are specified by generally accepted accounting principles. If the aggregate amount of notes receivable exceeds 10 percent of the aggregate amount of receivables. the above information shall be set forth separately. Include a description of the nature and status of the principal items comprising such amount. and employees (other than related parties) which arose in other than the ordinary course of business. a. 3 Billed or unbilled amounts representing claims or other similar items subject to uncertainty concerning their determination or ultimate realization. along with the alternatives of the aggregate cost or the aggregate market value at the balance sheet date. Unearned income. if practicable.Accounting Disclosure Checklist . underwriters. if practicable. related parties. a. 4 5 6 Allowances for doubtful accounts and notes receivable. State separately in the balance sheet or in a note thereto. when the amounts of retainage (see (1) above) are expected to be collected. the basis of determining the aggregate amount shown in the balance sheet. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). State separately amounts receivable from 1 2 3 4 customers (trade). also state the amounts included in each item which are expected to be collected after one year. Also state. in the balance sheet or in a note thereto. and others 3 b. Accounts and notes receivable. Include a general description of the prerequisites for billing. the amounts of major classes of inventory such as: ©2010 KPMG LLP. promoters. by year.Annual (12/10) Page 18 of 290 terms. parenthetically or otherwise. 4 With respect to (1) through (3) above.S. The amount is to be set forth separately in the balance sheet or in a note thereto. . With respect to all other current marketable securities. a Swiss entity. c.

3 work in process (see § 210. first-out. The aggregate amount representing claims or other similar items subject to uncertainty concerning their determination or ultimate realization. the number of units delivered to date and the number of units on order) shall be disclosed. state in a note to the financial statements the aggregate amount of the general and administrative costs incurred in each period and the actual or estimated amount remaining in inventory at the date of each balance sheet. 4 raw materials. if material. the following information. c.) 2. initial tooling costs) which exceeds the aggregate estimated cost of all inprocess and delivered units on the basis of the estimated average cost of all units expected to be produced under long-term contracts and programs not yet complete. the aggregate number of units expected to be delivered under the program. d. Elements of cost include.Accounting Disclosure Checklist . a Swiss entity. first-out. If the LIFO inventory method is used. average cost. as well as that portion of such amount which would not be absorbed in cost of sales based on existing firm orders at the latest balance sheet date. if practicable. b.4–05). The method by which amounts are removed from inventory (e. the principal assumptions (including. if applicable.S. and 5 supplies. the excess of replacement or current cost over stated LIFO value shall. The basis of determining the amounts shall be stated. or general and administrative costs. disclose the amount of deferred costs by type of cost (e. among other items. estimated average cost per unit) shall be described.. where meaningful. be stated parenthetically or in a note to the financial statements. retained costs representing the excess of manufacturing or production costs over the amounts charged to cost of sales or delivered or in-process units. All rights reserved. initial tooling or other deferred startup costs. If the method of calculating a LIFO inventory does not allow for the practical determination of amounts assigned to major classes of inventory.Annual (12/10) Page 19 of 290 1 Finished goods. In addition.. and ©2010 KPMG LLP. g. a Delaware limited liability partnership and the U. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . initial tooling. The aggregate amount of manufacturing or production costs and any related deferred costs (e. If the estimated average cost per unit is used as a basis to determine amounts removed from inventory under a total program or similar basis of accounting. If any general and administrative costs are charged to inventory. g.. shall be stated in a note to the financial statements: 1. the amounts of those classes may be stated under cost flow assumptions other that LIFO with the excess of such total amount over the aggregate LIFO amount shown as a deduction to arrive at the amount of the LIFO inventory. deferred production. the description of this method shall include the nature of the cost elements included in inventory. 2 inventoried costs relating to long-term contracts or programs. g. etc. For all long-term contracts or programs. last-in. If cost is used to determine any portion of the inventory amounts. first-in.

With respect to any significant deferred charge. along with the alternate of the aggregate cost or aggregate market value at the balance sheet date. State separately. Any significant addition or deletion shall be explained in a note. parenthetically or otherwise. and plant adjustments. 13 Property. 15 Intangible assets. 18 Total assets. along with the basis of determining the respective amounts. 16 Accumulated depreciation and amortization of intangible assets.Annual (12/10) Page 20 of 290 include a description of the nature and status of the principal items comprising such aggregate amount. This rule shall not be applicable in respect to companies which are not required to make such a classification. state. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 7 8 9 Prepaid expenses. state the policy for deferral and amortization. 11 Indebtedness of related parties—not current. a Swiss entity. 3. as required by the system of accounts prescribed by the applicable regulatory authorities. 14 Accumulated depreciation. The accounting and disclosure requirements for non-current marketable equity securities are specified by generally accepted accounting principles. the basis of determining the aggregate amounts shown in the balance sheet. Total current assets. when appropriate. With respect to other security investments and any other investment. a. State the basis of determining the amounts.S. State separately. in the balance sheet or in a note thereto. 12 Other investments. depletion. any amounts in excess of five percent of total current assets. Tangible and intangible utility plant of a public utility company shall be segregated so as to show separately the original cost. 17 Other assets. The amount of progress payments netted against inventory at the date of the balance sheet. plant acquisition adjustments. Other current assets.Accounting Disclosure Checklist . LIABILITIES ©2010 KPMG LLP. any other item not properly classed in one of the preceding asset captions which is in excess of five percent to total assets. and amortization of property. State separately each class of such assets which is in excess of five percent of the total assets. plant and equipment. All rights reserved. b. in the balance sheet or in a note thereto. The amount is to be set forth separately in the balance sheet or in a note thereto. The amount is to be set forth separately in the balance sheet or in a note thereto. 10 Securities of related parties. . a Delaware limited liability partnership and the U. Any significant addition or deletion should be explained in a note. plant and equipment.

23 Indebtedness to related parties—noncurrent. . 4 a brief indication of priority. 3 holders of commercial paper. each issue or type of obligation and such information as will indicate: 1 The general character of each type of debt including the rate of interest. All rights reserved. ©2010 KPMG LLP. State separately. b. or. The amount and terms of unused lines of credit for short-term financing shall be disclosed. and 5 if convertible. 21 Total current liabilities.S. 20 Other current liabilities. when appropriate. Amounts applicable to (1). such as “maturing serially from 2000 to 2015”. 5 related parties. a brief indication of the serial maturities. including capitalized leases. in the balance sheet or in a note thereto.Annual (12/10) Page 21 of 290 Current Liabilities. 22 Bonds. if significant. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist . 3 if the payment of principal or interest is contingent. in the notes to the financial statements. b. (2) and (3) may be stated separately in the balance sheet or in a note thereto. a. 6 underwriters. a. 4 trade creditors. promoters. State separately. mortgages and other long-term debt. any item in excess of 5 percent of total current liabilities. 3 Separately identify the amounts that support a commercial paper or similar borrowing arrangement. the basis. 2 The date of maturity. if maturing serially. a Delaware limited liability partnership and the U. when appropriate 19 Accounts and notes payable. 2 Disclose weighted-average interest rate on short-term borrowings outstanding as of the date of each balance sheet. 1 Disclose commitment fees and conditions under which lines of credit may be withdrawn. in the balance sheet or in a note thereto. a Swiss entity. The amount and terms (including commitment fees and the conditions under which commitments may be withdrawn) of unused commitments for long-term financing arrangements that would be disclosed under this rule if used shall be disclosed in the notes to the financial statements if significant. 2 factors or other financial institutions for borrowings. an appropriate indication of such contingency. State separately amounts payable to: 1 banks for borrowings. Long-Term Debt. and employees (other than related parties). For amounts owed to related parties see Topic 850. and 7 others.

(b) deferred tax credits. Offsetting is appropriate only if the available evidence. typically a financial institution or one of its affiliates. Each of two parties owes the other determinable amounts. State separately. 4 Subtopic 210-20: Balance Sheet--Offsetting Presentation >Right of Setoff 210-20-45-1. The reporting party intends to set off. the liability should be recorded as a borrowing on which interest is recognized.Annual (12/10) Page 22 of 290 24 Other liabilities. pays its accounts payable in return for a promise to pay the other party at a future date. The nature of support required for an assertion in financial statements that a right of setoff is enforceable at law is subject to a costbenefit constraint and depends on facts and circumstances. The right of setoff is enforceable at law. If an enterprise structures an arrangement in which another party. Bankruptcy Code imposes restrictions on or prohibitions against the right of setoff in bankruptcy under certain circumstances. and (c) material items of deferred income. A right of setoff exists when all of the following conditions are met: a. 210-20-45-9. 210-20-45-2. any item not properly classified in one of the preceding liability captions which is in excess of 5 percent of total liabilities. State separately in the balance sheet amounts for (a) deferred income taxes. A debtor having a valid right of setoff may offset the related asset and liability and report the net amount.S. either supporting or questioning enforceability. > Offsetting Securities Against Taxes Payable 210-20-45-6.Accounting Disclosure Checklist . should be considered. All of the information that is available. The reporting party has the right to set off the amount owed with the amount owed by the other party. c.S. b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). State laws about the right of setoff may provide results different from those normally provided by contract or as a matter of common law. a Swiss entity. 26 Deferred credits. a Delaware limited liability partnership and the U. Similarly. The offset of cash or other assets against the tax liability or other amounts owing to governmental bodies shall not be acceptable except in the circumstances described in paragraph 210-20-45-7. both positive ©2010 KPMG LLP. All rights reserved. . > Current Liabilities Other Than Income Taxes 27 SEC-2003 AICPA National Conference on Current SEC Developments. > Assurance that Right of Setoff Is Enforceable in a Bankruptcy 210-20-45-8. in the balance sheet or in a note thereto. not as accounts payable. 25 Commitments and contingent liabilities. d. The phrase enforceable at law encompasses the idea that the right of setoff should be upheld in bankruptcy. Legal constraints should be considered to determine whether the right of setoff is enforceable. the U.

even though those terms are used throughout this Subtopic. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). c. All rights reserved. or in the footnotes: a. State separately the adjustments to the balance at the beginning of the earliest period presented for items which were retroactively applied to periods prior to that period. >> Alternative Formats for Reporting Comprehensive Income 220-10-45-8. if an entity has an outstanding noncontrolling interest (minority interest). a Swiss entity. All components of comprehensive income shall be reported in the financial statements in the period in which they are recognized. 220-10-45-5.) Presentation > Reporting Comprehensive Income 220-10-45-4. Present an analysis of the changes in each caption of stockholders’ equity and noncontrolling interests presented in the balance sheet that reconciles the beginning balance to the ending balance for each period that an income statement is required with all significant reconciling items described by appropriate captions with contributions from and distribution to owners shown separately. indicates that there is reasonable assurance that the right of setoff would be upheld in bankruptcy. A total amount for comprehensive income shall be displayed in the financial statement where the components of other comprehensive income are reported. b. 6 . The information in items (a) – (c) below may be presented in the balance sheet. An entity shall display comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements that constitute a full set of financial statements.S. ©2010 KPMG LLP. Paragraph 810-10-501A(a) (in this checklist) states that.Accounting Disclosure Checklist . Subtopic 220-10: Comprehensive Income—Overall (Note: An entity that has no items of other comprehensive income in any period presented is not required to report comprehensive income. This Subtopic requires that an entity display net income as a component of comprehensive income. 5 Subtopic 215-10: Statement of Shareholder Equity—Overall—SEC Guidance > Changes in Each Caption of Other Stockholders' Equity 1 Regulation S-X Rule 3-04. State the amount of dividends per share and in the aggregate for each class of shares. as a separate statement. a Delaware limited liability partnership and the U. amounts for both comprehensive income attributable to the parent and comprehensive income attributable to the noncontrolling interest in a less-than-wholly-owned subsidiary are reported on the face of the financial statement in which comprehensive income is presented in addition to presenting consolidated comprehensive income. This Subtopic does not require that an entity use the terms comprehensive income or other comprehensive income in its financial statements.Annual (12/10) Page 23 of 290 and negative.

the total change is reported as two amounts. including reclassification adjustments. in a statement of changes in equity. a Swiss entity. an entity may use either a gross display on the face of the financial statement or a net display on the face of the financial statement and disclose the gross change in the notes to the financial statements. If displayed net. 220-10-45-12. reclassification adjustments are combined with other changes in the ©2010 KPMG LLP. Although this Subtopic does not require a specific format for displaying comprehensive income and its components. Therefore. If displayed gross.Accounting Disclosure Checklist . reclassification adjustments are reported separately from other changes in the respective balance. An entity shall disclose the amount of income tax expense or benefit allocated to each component of other comprehensive income.S. The total of other comprehensive income for a period shall be transferred to a component of equity that is displayed separately from retained earnings and additional paid-in capital in a statement of financial position at the end of an accounting period.Annual (12/10) Page 24 of 290 Examples 1 through 2 (paragraphs 220-10-55-4 through 55-27) provide illustrations of the components of other comprehensive income and total comprehensive income being reported below the total for net income in a statement that reports results of operations. thus. All rights reserved. An entity may display components of other comprehensive income either net of related tax effects or before related tax effects with one amount shown for the aggregate income tax expense or benefit related to the total of other comprehensive income items. or in notes to the financial statements. 220-10-45-10. An entity shall disclose accumulated balances for each classification in that separate component of equity on the face of a statement of financial position. in a separate statement of comprehensive income that begins with net income. The classifications shall correspond to classifications used elsewhere in the same set of financial statements for components of other comprehensive income. a Delaware limited liability partnership and the U. or it may disclose reclassification adjustments in the notes to the financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). > Reclassification Adjustments 220-10-45-17. and in a statement of changes in equity. 220-10-45-9. A descriptive title such as accumulated other comprehensive income shall be used for that component of equity. for all classifications of other comprehensive income. >> Reporting Other Comprehensive Income in the Equity Section of a Statement of Financial Position 220-10-45-14. an entity is encouraged to display the components of other comprehensive income and total comprehensive income below the total for net income in a statement that reports results of operations or in a separate statement of comprehensive income that begins with net income. Displaying comprehensive income in an income-statement-type format is superior to displaying it in a statement of changes in equity. either on the face of the statement in which those components are displayed or in notes to the financial statements. An entity may display reclassification adjustments (See ASC paragraphs 220-10-45-15 and 45-16) on the face of the financial statement in which comprehensive income is reported. 220-10-45-11. .

S-X. reducing total operating expenses. thus. c. TPA 1200. the total change is reported as a single amount. 2.Annual (12/10) Page 25 of 290 balance. KARG 49.13. the requirement that net income be presented as one amount does not apply to the following entities that have developed income statements with formats different from those of the typical commercial entity: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Insurance entities c. Income from rentals. rather than “statement of income”. If excise taxes comprise 1 percent or more of net sales and gross revenues.04. When an entity incurs a net loss. Net income shall reflect all items of profit and loss recognized during the period with the sole exception of error corrections as addressed in Topic 250. Costs and expenses applicable to each category of sales and revenues. f. Other. Investment companies b. d. Rule 5-03(b)(2). Rule 5-03(b)(1). Insurance recoveries to the extent of costs and losses may be reported as a separate line item. Insurance recoveries in excess of the costs and losses for the accounting period (the gain) and recoveries for business interruption (and similar) insurance may be presented as a gross amount on a separate line item between total operating expenses and operating income. Service revenue. state the amount on the face of the statement.Accounting Disclosure Checklist . KARG Q&A 49. a Swiss entity.276. 2 Net sales of tangible products. All rights reserved. Certain not-for-profit entities (NFPs). Gross and net displays are illustrated in Example 1 (see paragraph 220-10-55-4).S. a Delaware limited liability partnership and the U. ©2010 KPMG LLP. b. KARG 99. 3. Operating revenues of public utilities or others. .081. However. KPMG & Other Guidance 1. An illustration of the calculation of reclassification adjustments for available-for-sale securities is included in Example 2 (see paragraph 220-10-55-18). 7 Subtopic 225-10: Income Statement--Overall Presentation 225-10-45-1. e. the term “statement of operations” should be used. 8 Subtopic 225-10: Income Statement—Overall—SEC Guidance 1 S-X. Include net sales and gross revenues and state separately: a.

Rule 5-03(b)(8). Income or from continuing operations. Rule 5-03(b)(7). Rule 5-03(b)(21). Extraordinary items. 22 S-X. Selling. including those classified as held-to-maturity. 8 9 10 S-X. 3 4 5 6 7 S-X. Nonoperating income: Dividends. Interest and amortization of debt discount and expense S-X. Cumulative effects of changes in accounting principles. a Swiss entity. a Delaware limited liability partnership and the U. 17 S-X. Expenses applicable to rental income. 20 S-X. Rule 5-03(b). Rule 5-03(b)(12). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). e. Cost of services. 21 S-X. Discontinued operations 15 S-X. Rule 5-03(b)(14).Annual (12/10) Page 26 of 290 a. 13 S-X. Rule 5-03(b)(18). interest on securities. All rights reserved. b. Operating expenses of public utilities or others. Rule 5-03(b)(16). Net income or loss. Earnings per share data. Rule 5-03(b)(11). Provision for doubtful accounts and notes. available for sale ©2010 KPMG LLP.S. Cost of tangible goods sold. Rule 5-03(b)(13). (details may be shown in a footnote) S-X. Other. 18 S-X. and administrative expenses. general.Accounting Disclosure Checklist . S-X. 16 S-X. less applicable taxes. Other operating costs and expenses. Rule 5-03(b)(3). c. Net income attributable to the noncontrolling interest. including interest income on all securities within the scope of ASC Subtopic 325-40. Net income attributable to the controlling interest. Rule 5-03(b)(6). S-X. 19 S-X. Income tax expense. Income or loss before extraordinary items and cumulative effects of changes in accounting principles. . Rule 5-03(b)(9). Rule 5-03(b)(20). Rule 5-03(b)(4). 11 S-X. Rule 5-03(b)(17). profits on securities (net of losses) and miscellaneous other income. Rule 5-03(b)(15). Disclosure in the financial statement or notes thereto. Rule 5-03(b)(10). Rule 5-03(b)(19). Other general expenses. 12 S-X. S-X. as appropriate: Interest income. (details may be shown in a footnote). Income or loss before income tax expense. d. Equity in earnings of unconsolidated subsidiaries and 50 percent-or-less-owned persons. Nonoperating expenses: loss on securities (net of profits) and miscellaneous income deductions. 14 S-X. S-X. Rule 5-03(b)(5).

26 SAB Topic 6-B. or only incidentally related to. Income or loss applicable to common stock should be reported on the face of the income statement when it is materially different in quantitative terms from reported net income or loss or when it is indicative of significant trends or other qualitative considerations.S. 225-20-45-4. b Infrequency of occurrence.Accounting Disclosure Checklist . The underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to. Equity of partnership distinguished between amounts attributable to each ownership class. 28 SAB Topic 5. those gains and losses should be presented as a separate line item in the consolidated income statement without regard for materiality and clearly be designated as nonoperating income. taking into account the environment in which the entity operates (see paragraph 22520-55-1). In periods prior to the adoption of Statement 160. 24 SAB Topic 4-F. depletion. All rights reserved. The underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future. Thus. a Delaware limited liability partnership and the U. the ordinary and typical activities of the entity. 9 Subtopic 225-10: Income Statement—Extraordinary and Unusual Items Presentation > Extraordinary Items > > Criteria for Presentation as Extraordinary Items 225-20-45-2. Revenues representing operating subsidies from governmental entities should be reported in a separate line item in the income statements either under a revenue caption or as credit in the costs and expenses section. taking into account the environment in which the entity operates (see paragraph 225-20-55-2). both of the following criteria shall be met to classify an event or transaction as an extraordinary item: a Unusual nature. Items less than 10 percent of the total of all items of a class may be combined. Certain gains and losses shall not be reported as extraordinary items (except as indicated in the following paragraph) because they are usual in nature or may be expected to recur as a consequence of customary and continuing ©2010 KPMG LLP. 23 S-X. and amortization should not be positioned in the income statement in a manner that presents income before depreciation.Annual (12/10) Page 27 of 290 and trading securities. for companies that had an accounting policy of recognizing in the income statement gains or losses arising from issuances by a subsidiary of its own stock. . Depreciation.H. Rule 5-03(b). a Swiss entity. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. 27 SAB Topic 11-A. 25 SAB Topic 11-B. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

©2010 KPMG LLP. The caption extraordinary items shall be used to identify separately the effects of events and transactions. Income before extraordinary item b. In the absence of discontinued operations (see paragraphs 205-20-45-1 through 45-5. with disclosure of the nature and amounts thereof. Examples include all of the following: a. which address the reporting of discontinued operations). the following main captions shall appear in an income statement if extraordinary items are reported: a. > > > Criteria Exceptions 225-20-45-8. Extraordinary items shall be segregated from the results of ordinary operations and shown separately in the income statement. that meet the criteria for classification as extraordinary as discussed in paragraphs 225-20-45-1 through 45-6. or a prohibition under a newly enacted law or regulation that clearly meets both criteria specified in paragraph 225-20-45-2. inventories. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 225-20-45-10.Accounting Disclosure Checklist . Adjustment of accruals on long-term contracts. a Swiss entity. Net Income 225-20-45-11. gains or losses such as those in (a) and (d) of the preceding paragraph shall be included in the extraordinary item if they are a direct result of a major casualty (such as an earthquake). In rare situations.Annual (12/10) Page 28 of 290 business activities.S. or equipment used in the business e. any portion of such losses which would have resulted from a valuation of assets on a going concern basis shall not be included in the extraordinary items. Gains or losses on disposal of a component of an entity d. As indicated in paragraph 225-20-15-2. . Other gains or losses from sale or abandonment of property. or other intangible assets b. Extraordinary items (less applicable income taxes of $__) (Note__) c. 225-20-45-5. an event or transaction may occur that clearly meets both criteria specified in paragraph 225-20-45-2 and thus gives rise to an extraordinary gain or loss that includes one or more of the gains or losses enumerated in the preceding paragraph. a Delaware limited liability partnership and the U. Write-down or write-off of receivables. In these circumstances. plant. The nature of an extraordinary event or transaction and the principal items entering into the determination of an extraordinary gain or loss should be described. including those relating to major devaluations and revaluations c. deferred research and development costs. Gains or losses from exchange or translation of foreign currencies. All rights reserved. including those against competitors and major suppliers f. However. an expropriation. the net effect of discontinuing the application of regulatory operations accounting addressed in Section 980-20-40 shall be recognized as an extraordinary item regardless of whether the criteria in paragraph 225-20-45-2 (in this checklist) are met. other than the disposal of a component of an entity. > > Presentation of Extraordinary Items 225-20-45-9. Effects of a strike. equipment leased to others.

future losses and costs and probable future insurance recoveries). The potential loss of customer base and the related revenue recognition. The amount of exposure to credit loss and how that risk was evaluated.S. KPMG & Other Guidance > Natural Disasters 1 TPA 5400. as prescribed by Section 260-10-45. a. for example.Accounting Disclosure Checklist . Circumstances attendant to extraordinary items frequently require estimates. and therefore does not meet both criteria for classification as an extraordinary item. the EPS effects of those items shall not be presented on the face of the income statement. ASC paragraph 225-20-45-2 . based on judgment and evaluation of the facts known at the time of first accounting for the event. Gains or losses of a similar nature that are not individually material shall be aggregated. A description of contingencies from the event that have not yet been recognized in the financial statements but that are reasonably expected to impact the entity’s financial statements (for example.05. Such items shall not be reported on the face of the income statement net of income taxes or in any other manner that may imply that they are extraordinary items. The nature and financial effects of each event or transaction shall be disclosed on the face of the income statement or. 3 4 5 10 Subtopic 225-30: Income Statement—Business Interruption Insurance Disclosure ©2010 KPMG LLP. > > Adjustment of Amounts Reported in Prior Periods 225-20-45-13. a Swiss entity. alternatively. Similarly. in notes to financial statements. Any significant uncertainties in the amounts recognized in the financial statements. Each adjustment in the current period of an element of an extraordinary item that was reported in a prior period shall be classified separately in the current period in the same manner as the original item. Earnings per share (EPS) data for extraordinary items shall be presented either on the face of the income statement or in the related notes. shall be reported as a separate component of income from continuing operations. A natural disaster that is reasonably expected to re-occur would not be classified as an extraordinary event. a Delaware limited liability partnership and the U. For example. > Presentation of Unusual or Infrequently Occurring Items 225-20-45-16. Additional disclosures may include: 1 2 The nature and amount of losses recognized as a result of the natural disaster and the amounts of any related insurance recoveries. A material event or transaction that is unusual in nature or occurs infrequently but not both. . . All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). of associated costs and occasionally of associated revenue. a hurricane in an area that is susceptible to hurricanes is not an extraordinary event.Annual (12/10) Page 29 of 290 225-20-45-12. Entities should provide additional disclosures to enable financial statement users to evaluate the financial effects of a natural disaster and related events.

sales.Accounting Disclosure Checklist . A business entity or NFP that provides a set of financial statements that reports both financial position and results of operations shall also provide a statement of cash flows for each period for which results of operations are provided. a Delaware limited liability partnership and the U.S. For convenience. Loans receivable c. All rights reserved. > Classification > > Cash Flows from Investing Activities 230-10-45-11. The aggregate amount of business interruption insurance recoveries recognized during the period and the line item(s) in the statement of operations in which those recoveries are classified (including amounts reported as an extraordinary item pursuant to Subtopic 225-20). credit card receivables of financial services operations—generally. > > Gross and Net Cash Flows 230-10-45-9. The nature of the event resulting in business interruption losses b. be paid in full when first billed. For purposes of this paragraph. A statement of cash flows shall explain the change during the period in cash and cash equivalents. cash receipts and payments pertaining to any of the following qualify for net reporting: a. at the cardholder’s option. 11 Subtopic 230-10: Statement of Cash Flows—Overall Presentation > Form and Content 230-10-15-3. amounts due on demand are considered to have maturities of three months or less. a Swiss entity. Providing that the original maturity of the asset or liability is three months or less. Debt. Cash flows from purchases. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The following information shall be disclosed in the notes to financial statements in the period(s) in which business interruption insurance recoveries are recognized: a. and maturities of available-for-sale securities shall be classified as cash flows from investing activities and reported gross in the statement of cash flows.Annual (12/10) Page 30 of 290 225-30-50-1. . without incurring interest charges and that do not stem from the entity’s sale of goods or services—also are considered to be loans with original maturities of three months or less. usually within one month. > > Cash and Cash Equivalents 230-10-45-4. Investments (other than cash equivalents) b. ©2010 KPMG LLP. receivables resulting from cardholder charges that may.

and subsequent payments of principal on that debt thus are financing cash outflows. and equipment and other productive assets. For purposes of this paragraph. plant. a Delaware limited liability partnership and the U.S. Payments at the time of purchase or soon before or after purchase to acquire property. All rights reserved.Annual (12/10) Page 31 of 290 230-10-45-12. and equipment include directly related proceeds of insurance settlements. plant. the down payment. Payments to acquire equity instruments of other entities (other than certain equity instruments carried in a trading account as described in paragraphs 230-10-45-18 through 45-19) c. [not used] e. Receipts from sales of property. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). incurring directly related debt to the seller is a financing transaction (see paragraphs 230-10-4514 through 45-15 in this checklist). only advance payments. debt or equity instruments. including interest capitalized as part of the cost of those assets. Proceeds from issuing equity instruments ©2010 KPMG LLP. All of the following are cash inflows from investing activities: a. > > Cash Flows from Financing Activities 230-10-45-14. plant. such as the proceeds of insurance on a building that is damaged or destroyed.Accounting Disclosure Checklist . Receipts from sales of equity instruments of other entities (other than certain equity instruments carried in a trading account as described in paragraph 23010-45-19 in this checklist) and from returns of investment in those instruments c. and equipment and other productive assets are investing cash outflows. if loans were acquired as investments. Disbursements for loans made by the entity and payments to acquire debt instruments of other entities (other than cash equivalents and certain debt instruments that are acquired specifically for resale as discussed in paragraph 230-10-45-21) b. a Swiss entity. Generally. receipts from disposing of loans. 230-10-45-13. All of the following are cash outflows for investing activities: a. plant. or other amounts paid at the time of purchase or soon before or after purchase of property. That is. . However. cash receipts from sales of those loans shall be classified as investing cash inflows regardless of a change in the purpose for holding those loans. Receipts from collections or sales of loans made by the entity and of other entities’ debt instruments (other than cash equivalents and certain debt instruments that are acquired specifically for resale as discussed in paragraph 230-10-45-21 in this checklist) that were purchased by the entity b. All of the following are cash inflows from financing activities: a. or property. Receipts from sales of loans that were not specifically acquired for resale. and equipment and other productive assets d.

Payments for debt issue costs. other than a financing element inherently included in an at-the-market derivative instrument with no prepayments e. and equity securities—interest and dividends. All of the following are cash inflows from operating activities: a. and equipment or other productive assets are financing cash outflows. including receipts from collection or sale of accounts and both short. plant. 230-10-45-15. c. Distributions to counterparties of derivative instruments that include financing elements at inception. Proceeds from issuing bonds. Repayments of amounts borrowed. plant. such as amounts received to settle lawsuits.or longterm borrowing c. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . whether the proceeds were received at inception or over the term of the derivative instrument. c. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). and from other short. excess tax benefits shall be determined on an individual award (or portion thereof) basis. For this purpose. . mortgages. b. equipment. other than a financing element inherently included in an at-the-market derivative instrument with no prepayments.and long-term notes receivable from customers arising from those sales. or improving property. Receipts from contributions and investment income that by donor stipulation are restricted for the purposes of acquiring. All of the following are cash outflows for financing activities: a. or other long-lived assets or establishing or increasing a permanent endowment or term endowment d. Cash receipts from returns on loans. Other principal payments to creditors who have extended long-term credit. e. All rights reserved. See paragraph 230-10-45-13(c). The distributions may be either at inception or over the term of the derivative instrument. including outlays to reacquire the entity’s equity instruments. Payments of dividends or other distributions to owners.Annual (12/10) Page 32 of 290 b. other debt instruments of other entities. proceeds of insurance settlements except for those that are directly related to investing ©2010 KPMG LLP. Cash receipts from sales of goods or services. > > Cash Flows from Operating Activities 230-10-45-16. Cash retained as a result of the tax deductibility of increases in the value of equity instruments issued under share-based payment arrangements that are not included in the cost of goods or services that is recognizable for financial reporting purposes. Proceeds received from derivative instruments that include financing elements at inception. as discussed in paragraph 230-10-45-21. d. The term goods includes certain loans and other debt and equity instruments of other entities that are acquired specifically for resale.S. notes. a Swiss entity. which indicates that most principal payments on seller-financed debt directly related to a purchase of property. All other cash receipts that do not stem from transactions defined as investing or financing activities. b. constructing.

. f. (This is the same amount reported as a financing cash inflow pursuant to paragraph 230-10-45-14(e).S. 230-10-45-20. fines. cash contributions to charities.Annual (12/10) Page 33 of 290 or financing activities. a Delaware limited liability partnership and the U. a Swiss entity. and other fees or penalties and the cash that would have been paid for income taxes if increases in the value of equity instruments issued under share-based payment arrangements that are not included in the cost of goods or services recognizable for financial reporting purposes also had not been deductible in determining taxable income. Cash payment made to settle an asset retirement obligation. All rights reserved. For example.) d. Cash receipts and cash payments resulting from purchases and sales of other securities and other assets shall be classified as operating cash flows if those assets are acquired specifically for resale and are carried at market value in a trading account. such as payments to settle lawsuits. such as from destruction of a building. Cash receipts and cash payments resulting from acquisitions and sales of loans also shall be classified as operating cash flows if those loans are acquired specifically for resale and are carried at market value or at the lower of cost or market value. Some loans are similar to securities in a trading account in that they are originated or purchased specifically for resale and are held for short periods of time. The term goods includes certain loans and other debt and equity instruments of other entities that are acquired specifically for resale. b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the appropriate ©2010 KPMG LLP. Cash receipts and cash payments resulting from purchases and sales of securities classified as trading securities as discussed in Topic 320 shall be classified pursuant to this Topic based on the nature and purpose for which the securities were acquired. > > More than One Class of Cash Flows 230-10-45-22. 230-10-45-21. c. Cash payments to other suppliers and employees for other goods or services. Cash payments to acquire materials for manufacture or goods for resale. All of the following are cash outflows for operating activities: a. including principal payments on accounts and both short. duties. e. > > Acquisitions and Sales of Certain Securities and Loans 230-10-45-19. Cash payments to governments for taxes. 230-10-45-17. mortgage loans held for sale are required to be reported at the lower of cost or market value in accordance with Topic 948. For example.and long-term notes payable to suppliers for those materials or goods.Accounting Disclosure Checklist . as discussed in paragraph 230-10-45-21. All other cash payments that do not stem from transactions defined as investing or financing activities. and refunds from suppliers. If so. a cash payment may pertain to an item that could be considered either inventory or a productive asset. Cash payments to lenders and other creditors for interest. and cash refunds to customers. Certain cash receipts and payments may have aspects of more than one class of cash flows.

including lessees. Interest and dividends that are donor restricted for long-term purposes as included in the list of financing activities and paragraph 230-10-45-14(c) are not part of operating cash receipts. . Entities are encouraged to provide further breakdowns of operating cash receipts and payments that they consider meaningful and feasible. and the like b. All rights reserved. A statement of cash flows for a period shall report net cash provided or used by operating. entities are encouraged to report major classes of gross cash receipts and gross cash payments and their arithmetic sum—the net cash flow from operating activities (the direct method). c. if any. Investing. In reporting cash flows from operating activities. investing. and financing activities and the net effect of those flows on cash and cash equivalents during the period in a manner that reconciles beginning and ending cash and cash equivalents. a Swiss entity. the cash that would have been paid for income taxes if increases in the value of equity instruments issued under sharebased payment arrangements that are not included as a cost of goods or services recognizable for accounting purposes also had not been deductible in determining taxable income (see subparagraph 230-10-45-14(e) in this checklist) g. 230-10-45-25. (Paragraphs 230-10-55-1 through 55-4 and paragraph 230-10-55-21. Except for those items that qualify for net reporting (see paragraph 23010-45-9). advertising. separately report the following classes of operating cash receipts and payments: a.Annual (12/10) Page 34 of 290 classification shall depend on the activity that is likely to be the predominant source of cash flows for the item. at a minimum. and the like e. Income taxes paid and separately. which may include periods long after sale or liquidation of the operation. if any d. > > Reporting Operating. An entity that nevertheless chooses to report separately operating cash flows of discontinued operations shall do so consistently for all periods affected. Cash collected from customers. Other operating cash receipts.S. respectively. a Delaware limited liability partnership and the U. investing cash inflows and outflows and financing cash inflows and outflows should be reported separately. > > Cash Receipts and Payments Related to Hedging Activities ©2010 KPMG LLP. and Financing Activities 230-10-45-24. including suppliers of insurance. Separate disclosure of cash flows pertaining to extraordinary items or discontinued operations reflected in those categories is not required. Other operating cash payments.Accounting Disclosure Checklist .) Entities that do so shall. Interest and dividends received. 230-10-45-26. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). discuss and illustrate a method by which those major classes of gross operating cash receipts and payments generally may be determined indirectly. Cash paid to employees and other suppliers of goods or services. licensees. Interest paid f.

with the statement of cash flows reporting only the net cash flow from operating activities. If the indirect method is used. > Reconciliation of Net Income and Net Cash Flow from Operating Activities 230-10-45-28. 230-10-45-29. paragraph 830-30-45-3 applies to cash receipts and cash payments. a Delaware limited liability partnership and the U. the reconciliation of net income of a business entity or change in net assets of an NFP to net cash flow from operating activities shall be provided in a separate schedule. If the reconciliation is presented in the statement of cash flows. each cash receipt or payment is to be classified according to its nature without regard to whether it stems from an item intended as a hedge of another item. 230-10-45-31. Entities that choose not to provide information about major classes of operating cash receipts and payments by the direct method as encouraged in paragraph 230-10-45-25 (in this checklist) shall determine and report the same amount for net cash flow from operating activities indirectly by adjusting net income of a business entity or change in net assets of a not-for-profit entity (NFP) to reconcile it to net cash flow from operating activities (the indirect or reconciliation method).Accounting Disclosure Checklist . and financing activities.S. investing. > Foreign Currency 830-230-45-1. That reconciliation shall separately report all major classes of reconciling items. All rights reserved. A statement of cash flows of an entity with foreign currency transactions or foreign operations shall report the reporting currency equivalent of foreign currency cash flows using the exchange rates in effect at the time of the cash flows. a Swiss entity. all adjustments to net income of a business entity or change in net assets of an NFP to determine net cash flow from operating activities shall be clearly identified as reconciling items. . An entity shall disclose its policy for determining which items are treated as cash equivalents. 230-10-45-32. If the direct method of reporting net cash flow from operating activities is used.Annual (12/10) Page 35 of 290 230-10-45-27. The reconciliation of net income of a business entity or change in net assets of an NFP to net cash flow from operating activities described in paragraph 230-10-45-28 (in this checklist) shall be provided regardless of whether the direct or indirect method of reporting net cash flow from operating activities is used. Generally.) The statement of cash flows shall report the effect of exchange rate changes on cash balances held in foreign currencies as a separate part of the reconciliation of the change in cash and cash equivalents during the period outside of operating. See Example 1 (paragraph 830230-55-1) for an illustration of this guidance. Any change to that policy is a change in accounting principle ©2010 KPMG LLP. the reconciliation may be either reported within the statement of cash flows or provided in a separate schedule. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). An appropriately weighted average exchange rate for the period may be used for translation if the result is substantially the same as if the rates at the dates of the cash flows were used. 230-10-45-30. (That is. Disclosure > Cash Equivalents Policy 230-10-50-1.

and financing activities.046.S. Combine cash flows from discontinued operations with cash flows from continuing operations within each category b. Some transactions are part cash and part noncash. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 2 SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance December 1. Cash flows relating to customerrelated receivables (which include any receivables for sales of inventory made and services provided to customers. it may be convenient to include them on the same page as the statement of cash flows. Payments made to the Pension Benefit Guaranty Corporation (the classification of these payments does not change in the event registrants reorganize in bankruptcy) are similarly classified as operating cash outflows. All rights reserved. Identify cash flows from discontinued operations within each category.042. > Noncash Investing and Financing Activities 230-10-50-3. 230-10-50-5. financing receivables for customer-related sales. However. classification as an operating or financing activity may be appropriate when the purpose of the restricted cash is directly related to the operations of the entity. Contributions to pension plans are reported as operating cash outflows. If there are only a few such noncash transactions. a Swiss entity. and lease receivables arising from sales-type lease transactions) are classified as operating activities. Ensure line item 3 KPMG & Other Guidance 1 ©2010 KPMG LLP. > Interest and Income Taxes Paid 230-10-50-2. a Delaware limited liability partnership and the U. 230-10-50-6.044. investing. and they shall clearly relate the cash and noncash aspects of transactions involving similar items. SEC Staff Speech – 2006 AICPA National Conference. . 2005. Restricted cash is typically classified as an investing activity. clearly referenced to the statement of cash flows.Accounting Disclosure Checklist . KARG 29. If the indirect method is used. “floor plan” notes. Those disclosures may be either narrative or summarized in a schedule. KARG 29. amounts of interest paid (net of amounts capitalized) and income taxes paid during the period shall be disclosed. KARG 29. SEC Guidance 1 SEC Staff Speech – If an entity that chooses to present separately cash flows from discontinued operations. the transactions may be reported elsewhere in the financial statements. Otherwise. or c. only the cash portion shall be reported in the statement of cash flows. Present cash flows from discontinued operations separately with disclosure of operating. Information about all investing and financing activities of an entity during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period shall be disclosed. the presentation must either: a.Annual (12/10) Page 36 of 290 that shall be effected by restating financial statements for earlier years presented for comparative purposes. including notes receivables.

S. That is. and investing cash flows when the retained interests are classified as either availablefor-sale or held-to-maturity. Insurance recoveries for business interruption and for minor repairs and maintenance of property and equipment should be included in operating activities. Cash payments that increase the cash surrender value of officers’ life insurance should be classified as investing outflows. investing. a Delaware limited liability partnership and the U. those proceeds generally should not be netted against the disbursements to repair or replace insured property and equipment. Disclosure of how management determines at the date of purchase or origination whether it intends to sell a loan or hold it for the foreseeable future is encouraged. If the increase in the cash surrender value is greater than the premium paid.083. the different components of those payments should be separately classified in the statement of cash flows according to the nature of each component. TPA 5600. The cash outflow upon repurchase or redemption of a zero-coupon bond is comprised of two components – an interest component and a principal component.033. the component representing payment of the imputed interest would be classified as an operating cash flow and the component representing repayment of the principal would be classified as a financing cash flow. 29.039. Generally. Cash flows resulting from acquisitions (including both purchases and originations) and sales of loans that were not specifically acquired with the intent of resale are classified as investing cash flows. Subtotals are not presented within operating. All rights reserved. ©2010 KPMG LLP. Judgment may be required in classifying cash flows from insurance recoveries in situations in which recoveries for both property damage and business interruption were negotiated with a single insurer. Cash allowances received from the landlord by a lessee in an operating lease should be classified as an operating activity.Annual (12/10) Page 37 of 290 descriptions in the statement of cash flows are consistent with those on the balance sheet and in the footnotes detailing receivables. Any amount paid in excess of the increase in the cash surrender value should be included in operating activities.083. a Swiss entity. or financing sections of the statement.17.Accounting Disclosure Checklist . and the remainder of the increase in cash surrender value should be classified as a reconciling item on the reconciliation of net income to net cash provided by operating activities. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 29. Cash payments for leasehold improvements should be classified as an investing activity by a lessee in an operating lease. even if the proceeds are not used to replace the damaged property and equipment. 2 Cash flows resulting from acquisitions (including both purchases and originations) and sales of loans that are acquired specifically for resale and are carried at market value or at the lower of cost or market value are classified as operating cash flows. the premium paid should be classified as an investing outflow. KARG 99. 29.058. Insurance recoveries for property. TPA 5600. Principal payments related to retained interests from securitizations of loans are classified as operating cash flows when the retained interests are classified as trading. plant and equipment should be included in investing activities.17. 3 4 5 6 7 8 9 10 KARG 29.036. . KARG 99.041. In addition. KARG 29.

a Swiss entity. 16 Contingent Consideration: a. paragraph 12.. The portion of the payment of the liability-classified contingent consideration arrangement recognized in earnings in the income statement should be classified as cash flows from operating activities (i. with separate presentation for net income (loss) attributable to the controlling and noncontrolling interests. Auction rate notes and variable rate demand notes generally are not cash equivalents. consolidated net income (loss) inclusive of both the controlling and noncontrolling interests).016. ASC paragraph 810-10-45-19 redefines net income (loss) such that net income (loss) is at the consolidated amounts.Accounting Disclosure Checklist . 14 KARG 29. should be classified as an operating activity in the cash flow statement. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 13 Distributions from equity method investees that constitute a “return on” investment are classified as cash flows from operations. Business Combinations. > Noncontrolling Interests 17 The cash flows from purchases and sales of a noncontrolling interest by a parent company while retaining control of a subsidiary should be presented as cash flows from financing activities in the statement of cash flows as these transaction represent equity transactions among owners. 12 FSP SOP 94-6-1.015a)..S. Disclose accounting policy for reporting changes in a “book overdraft” in which the bank has not advanced cash to the company to cover outstanding checks (KARG 29. > Reconciling Net Income to Cash Flow from Operating Activities After Adoption of Statement 160 18 For a statement of cash flows prepared using the indirect method. b. which include the amounts attributable to the owners of the parent and the noncontrolling interest. a Delaware limited liability partnership and the U. The portion of the payment of the liability-classified contingent consideration arrangement that is included as part of the initial measurement of the fair value of the consideration transferred should be classified as cash flows from financing activities in the statement of cash flows.045. ©2010 KPMG LLP. a. both (1) accretion expense and (2) changes in the amount or timing of payment). ASC Topic 230 requires a reconciliation of net income (loss) to net cash flows from operating activities. .Annual (12/10) Page 38 of 290 11 Changes in cash overdraft should be classified as financing activity. Such instruments are subject to Subtopic 320-10 or other literature applicable to financial instruments. on negative amortizing loans) should be included in the reconciliation of net income to net cash flows from operating activities. Noncash interest income (for example. KARG 109.e.e. All rights reserved. Net income as defined in ASC Subtopic 810-10 is the starting point in applying the indirect method in the statement of cash flows (i. > Business Combinations 15 Transaction costs incurred in connection with business combinations that are expensed as incurred in accordance with FASB ASC Topic 805.

Annual (12/10) Page 39 of 290 12 Subtopic 235-10: Notes to Financial Statements—Overall Disclosure > Accounting Policy Disclosure 235-10-50-1. Unusual or innovative applications of GAAP. > Examples of Disclosures 235-10-50-4. statements so presented also shall include disclosure of the pertinent accounting policies. When financial statements that are issued or are available to be issued (as discussed in Section 855-10-25) purport to present fairly financial position. cash flows. Principles and methods peculiar to the industry in which the entity operates. in particular. Depreciation methods c. a description of all significant accounting policies of the entity shall be included as an integral part of the financial statements. cash flows. and results of operations in accordance with generally accepted accounting principles (GAAP). Inventory pricing e. Basis of consolidation b. among others. In circumstances where it may be appropriate to issue one or more of the basic financial statements without the others. a Delaware limited liability partnership and the U. Accounting for recognition of profit on long-term construction-type contracts f. it shall encompass those accounting principles and methods that involve any of the following: a. Recognition of revenue from franchising and leasing operations. purporting to present fairly the information given in accordance with GAAP.Accounting Disclosure Checklist . > What to Disclose 235-10-50-3. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . Disclosure of accounting policies shall identify and describe the accounting principles followed by the entity and the methods of applying those principles that materially affect the determination of financial position. a Swiss entity. Amortization of intangibles d. or results of operations. 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. Examples of disclosures by an entity commonly required with respect to accounting policies would include. > Avoid Duplicate Details of Disclosures ©2010 KPMG LLP. A selection from existing acceptable alternatives b. In general.S. even if such principles and methods are predominantly followed in that industry c. Information about the accounting policies adopted by an entity is essential for financial statement users. those relating to the following: a. All rights reserved.

a Delaware limited liability partnership and the U. See paragraph 235-10-S99-4 for disclosure format and for the requirements for the schedule of valuation and qualifying accounts. In some cases. such as: 1.Accounting Disclosure Checklist . . provide disclosures required by S-X Rule 4-08(m). Pertinent conditions and events giving rise to the assessment of substantial doubt about the entity’s ability to continue as a going concern for a reasonable period of time. Accounting Changes and Error Corrections. This Subtopic recognizes the need for flexibility in matters of format (including the location) of disclosure of accounting policies provided that the entity identifies and describes its significant accounting policies as an integral part of its financial statements in accordance with the provisions of this Subtopic. 13 Going Concern Disclose the following: a. are included in the individual Subtopics. Rule 4-08(m). Disclosure is preferred in a separate summary of significant accounting policies preceding the notes to financial statements. or as the initial note. 3. > Format 235-10-50-6. Whether operations for the current or prior years did not generate sufficient cash to cover current obligations. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the disclosure of accounting policies shall refer to related details presented elsewhere as part of the financial statements. or if the amount at risk with any counterparty or group of related counterparties exceeds 10 percent of stockholders’ equity. composition of inventories or of plant assets) presented elsewhere as part of the financial statements.S. Whether there is a possible need to obtain additional financing (debt or equity) or to liquidate certain holdings to offset future cash flow ©2010 KPMG LLP. Whether waivers were obtained from creditors relating to the company’s default under the provisions of debt agreements. Required General Disclosures. All rights reserved. 1 S-X. SEC Guidance Note: Except for SEC item 1 below. if higher than the carrying amount for a repurchase agreement) of a repurchase or reverse repurchase agreement exceeds 10 percent of total assets. 2. > Disclosures from General Schedules 2 Regulation S-X Rule 12-09. changes in accounting policies during the period shall be described with cross-reference to the disclosure required by Topic 250. other SEC Requirements from Rule 4-08 of Regulation S-X. such as: 1. Other pertinent conditions b.Annual (12/10) Page 40 of 290 235-10-50-5. Possible effects of such conditions and events. If the aggregate carrying amount (or market value. for example. a Swiss entity. Financial statement disclosure of accounting policies shall not duplicate details (for example. under the same or a similar title.

2. Appropriate parent company information when parent is dependent upon remittances from subsidiaries to satisfy its obligations. including management’s plans for future actions. Management’s evaluation of the significance of those conditions and events and any mitigating factors. Note: Financial statements for entities that are subject to the provisions of Regulation SX (together with the Financial Reporting Releases) “must contain appropriate and prominent disclosure of the registrant’s financial difficulties and viable plans to overcome those difficulties” when the related auditors’ report includes a going concern explanatory paragraph. Approximate amount.02. d.S.Annual (12/10) Page 41 of 290 deficiencies.” Refer to SEC — Financial Reporting Release 607. a Delaware limited liability partnership and the U. of future fixed annual obligations not expected to be repaid from operations. In responding to these requirements. a Swiss entity. c. Further. the possible effects of such conditions and events. and any mitigating factors. When preparers of financial statements conclude that substantial doubt regarding the entity’s ability to continue as a going concern for a reasonable period of time is alleviated because of management’s plans. the requirements of Item 303 of Regulation S-K. “are intended to and should elicit detailed cash flow discussions” when the related auditors’ report includes a going concern explanatory paragraph. .Accounting Disclosure Checklist . the preparers team should consider whether disclosure in the financial statements of the principal conditions and events that initially caused the belief that there was substantial doubt. e. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 14 Subtopic 250-10: Accounting Changes and Error Corrections—Overall Disclosure > Accounting Changes 250-10-45-15. f. that entity shall include disclosure of the effects of the accounting change on interim-period results. if determinable. Management’s Discussion and Analysis. If a public entity that regularly reports interim information makes an accounting change during the fourth quarter of its fiscal year and does not report the data specified by paragraph 270-10-50-1 in a separate fourth-quarter report or in its annual report. would be helpful to the users of the financial statements. Management’s plans (including relevant prospective financial information) and whether resolution of the situation is dependent on realization of management’s plans. in a note to the annual financial statements for the fiscal year ©2010 KPMG LLP. as required by paragraph 250-10-501 (in this checklist). Possible discontinuance of operations. All rights reserved. 3. “any registrant with such pressing financial problems should include a reasonably detailed discussion of its ability or inability to generate sufficient cash to support its operations during the twelve month period following the date of the financial statements being reported upon. Information about the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities.

net income (or other appropriate captions of changes in the applicable net assets or performance indicator). the disclosures required by (a) shall be provided whenever the financial statements of the period of change are presented. > > Changes in Accounting Principle 250-10-50-1. 2. Compliance with this disclosure requirement is practicable unless an entity cannot comply with it after making every reasonable effort to do so. 3 4 c. Financial statements of subsequent periods need not repeat the disclosures required by this paragraph. and a description of the alternative method used to report the change (see paragraphs 250-10-45-5 through 45-7). a Swiss entity. any other affected financial statement line item. disclosure of the reasons therefor. The effect of the change on income from continuing operations. a Delaware limited liability partnership and the U. the amount of the total recognized indirect effects of the accounting change and the related per-share amounts. and the related per-share amounts. > > Change in Accounting Estimate ©2010 KPMG LLP. Presentation of the effect on financial statement subtotals and totals other than income from continuing operations and net income (or other appropriate captions of changes in the applicable net assets or performance indicator) is not required. that are attributable to each prior period presented. The nature of and reason for the change in accounting principle. The method of applying the change.S. if applicable. Unless impracticable. b. . If indirect effects of a change in accounting principle are recognized both of the following shall be disclosed: 1. If retrospective application to all prior periods is impracticable. and any affected per-share amounts for the current period and any prior periods retrospectively adjusted. including an explanation of why the newly adopted accounting principle is preferable. An entity shall disclose all of the following in the fiscal period in which a change in accounting principle is made: a.Annual (12/10) Page 42 of 290 in which the change is made. including all of the following: 1 2 A description of the prior-period information that has been retrospectively adjusted. if any.Accounting Disclosure Checklist . A description of the indirect effects of a change in accounting principle. if applicable. Note: Paragraphs 250-10-50-2 and 50-3 are omitted because they apply to interim periods only. The cumulative effect of the change on retained earnings or other components of equity or net assets in the statement of financial position as of the beginning of the earliest period presented. If a change in accounting principle has no material effect in the period of change but is reasonably certain to have a material effect in later periods. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). including the amounts that have been recognized in the current period.

When an entity effects a change in estimate by changing an accounting principle. net income (or other appropriate captions of changes in the applicable net assets or performance indicator). The effect on income from continuing operations.S. other comprehensive income. 805-20-50. The effect of the correction on each financial statement line item and any pershare amounts affected for each prior period presented b. and any related per-share amounts shall be disclosed for all periods presented. If a change in reporting entity does not have a material effect in the period of change but is reasonably certain to have a material effect in later periods. the entity shall disclose that its previously issued financial statements have been restated. the effect of the change on income before extraordinary items. along with a description of the nature of the error. ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The entity also shall disclose both of the following: a. such as a change in service lives of depreciable assets. When financial statements are restated to correct an error. > >> Change in Estimate Used in Valuation Technique 250-10-50-5. When there has been a change in the reporting entity. as of the beginning of the earliest period presented. The disclosure provisions of this Subtopic for a change in accounting estimate are not required for revisions resulting from a change in a valuation technique or its application. (Sections 805-1050. a Swiss entity. Disclosure of those effects is not necessary for estimates made each period in the ordinary course of accounting for items such as uncollectible accounts or inventory obsolescence. and any related per-share amounts of the current period shall be disclosed for a change in estimate that affects several future periods.Annual (12/10) Page 43 of 290 250-10-50-4. Financial statements of subsequent periods need not repeat the disclosures required by this paragraph. the financial statements of the period of the change shall describe the nature of the change and the reason for it. however.Accounting Disclosure Checklist . a Delaware limited liability partnership and the U. > > Change in Reporting Entity 250-10-50-6. The cumulative effect of the change on retained earnings or other appropriate components of equity or net assets in the statement of financial position. a description of that change in estimate shall be disclosed whenever the financial statements of the period of change are presented. If a change in estimate does not have a material effect in the period of change but is reasonably certain to have a material effect in later periods. . disclosure is required if the effect of a change in the estimate is material. net income (or other appropriate captions of changes in the applicable net assets or performance indicator).) > Correction of an Error in Previously Issued Financial Statements 250-10-50-7. All rights reserved. the disclosures in paragraph 250-10-50-1 (in this checklist) is also required. 805-30-50 (in this checklist). In addition. the nature of and reason for the change shall be disclosed whenever the financial statements of the period of change are presented. and 805-740-50 describe the manner of reporting and the disclosures required for a business combination.

When prior period adjustments are recorded.S. and the method by which the standard will be adopted. changes in business practices. the disclosure shall include the effects for each of the periods included in the statements. 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. Any other effects that are reasonably likely to occur (e.). b. in notes to financial statements and in management’s discussion and analysis (MD&A) if new standard will be adopted by retroactive restatement.Annual (12/10) Page 44 of 290 250-10-50-8. 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 and in interim reports issued during that year subsequent to the date of recording the adjustments. otherwise disclose in MD&A: a. Derivatives and Hedging (Topic 815): Scope Exception ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). etc. Disclosure of restatements in annual reports issued subsequent to the first such post-revision disclosure would ordinarily not be required. d. Financial statements of subsequent periods shall not repeat the disclosures required by paragraph 250-10-50-8 (in this checklist). (See Section 205-10-45 and paragraph 205-10-50-1 in this checklist. When financial statements for a single period only are presented. . A brief description of the standard and its anticipated adoption date. SEC Guidance > Disclosure of the Impact that Recently Issued Accounting Standards Will Have on the Financial Statements of the Registrant when Adopted in a Future Period 1 SAB Topic 11. a Swiss entity.. violations of debt covenants.g. All rights reserved. which is ordinarily the preferable procedure. The impact that the standard will have on the financial statements to the extent reasonably estimable or a statement that the impact is not known. 250-10-50-10.) Such disclosures shall include the amounts of income tax applicable to the prior period adjustments. Disclose the following regarding the impact of accounting standards issued. Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements ASU 2010-11.Accounting Disclosure Checklist .M (SAB 74). 250-10-50-9. a Delaware limited liability partnership and the U. Software (Topic 985): Certain Revenue Arrangements that Include Software Elements (EITF 09-3) ASU 2010-06. and c. When financial statements for more than one period are presented. Recently issued pronouncements for which SAB 74 disclosures may be required include: 1 2 3 4 ASU 2009-13. Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (EITF 08-1) ASU 2009-14. changes in availability or cost of capital. See paragraph 250-10-50-2 (in this checklist). but not yet adopted.

Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses 6 7 8 9 10 ASU 2010-23. Financial Services—Insurance (Topic 944). If a period or periods reported on include operations of a business prior to the date of acquisition. Other Expenses (Topic 720): Fees Paid to the Federal Government by Pharmaceutical Manufacturers 15 EITF 10-G. however.Annual (12/10) Page 45 of 290 Related to Embedded Credit Derivatives 5 ASU 2010-13. Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts 14 EITF 10-D. Entertainment—Casinos (Topic 924): Accruals for Casino Jackpot Liabilities (EITF 09-F) ASU 2010-17. Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts (EITF 09-G) 13 EITF 10-A. a Swiss entity. the statements shall be reconciled as to sales or revenues and net income in the statement or in a note thereto with the amounts previously reported. When preparing the SAB 74 disclosures. Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades (EITF 09-J) ASU 2010-15.e. Financial Services—Insurance (Topic 944): How Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments (EITF 09-B) ASU 2010-16.S. provided. Health Care Entities (Topic 954): Presentation of Insurance Claims and Related Insurance Recoveries (EITF 09-K) 12 ASU 2010-26. An example would be retrospective application of a new accounting standard that would materially affect the presentation of the financial statements. a Delaware limited liability partnership and the U. Revenue Recognition—Milestone Method (Topic 605): Milestone Method of Revenue Recognition (EITF 08-9) ASU 2010-20. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a registrant should focus on the actual effect adoption will have on historical financial statements (i. All rights reserved.. or for other reasons differ from reports previously issued for any period.Accounting Disclosure Checklist . Health Care Entities (Topic 954): Measuring Charity Care for Disclosure (EITF 09-L) 11 ASU 2010-24. > Retrospective Accounting Changes 3 Regulation S-X Rule 3-03(c). that such reconciliations need not be made (1) if they have been made in filings with the Commission in prior years or (2) the financial statements which are being retroactively adjusted have not previously been ©2010 KPMG LLP. will historical financial statements presented in the filing materially change). . Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations 2 SEC Staff Speech.

S. or contingent stock agreements) if those securities trade in a public market either on a stock exchange (domestic or foreign) or in the over-the-counter market. A business entity that prepares its financial statements in U. All rights reserved. Describe and quantify the effect on income before extraordinary items.S. c. warrants. Cash flow projections. June 23. securities such as options.] 16 Topic 260-10: Earnings per Share—Overall (required for public entities only) Scope > Entities 260-10-15-2 The guidance in the Earnings per Share Topic requires presentation of earnings per share (EPS) by all entities that have issued common stock or potential common stock (that is. but not required. any subsequent amendment to previously issued financial statements to correct an error should also reflect that retrospective accounting change. net income. Average tranche life.Accounting Disclosure Checklist . including securities quoted only locally or regionally. . 3 4 15 Subtopic 255-10: Changing Prices—Overall Disclosure 255-10-50-1. Entities are not discouraged from experimenting with other forms of disclosure. dollars and in accordance with U. relating to collateralized mortgage obligations (CMOs) / real estate mortgage investment conduits (REMICs)) that affects several future periods such as (not all-inclusive): a. to disclose supplementary information on the effects of changing prices.Annual (12/10) Page 46 of 290 filed with the Commission or otherwise made public. 2009 meeting of CAQ SEC Regulation Committee. and related per share amounts of the current period for a change in estimate (for example. the use of column headings labeled “As Adjusted” is not required but is considered a best practice. a Swiss entity. Reinvestment rate of return. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Delaware limited liability partnership and the U. b.S.” When prior periods have been adjusted to reflect the retrospective application of a new accounting principle. generally accepted accounting principles (GAAP) is encouraged. KPMG & Other Guidance 1 2 Columns consisting of financial information related to the correction of a material error should be labeled “As Restated. convertible securities. Once a registrant files interim financial statements that reflect the retrospective application of a new accounting principle. This Topic also requires presentation of EPS by an entity that has made a filing or is in the process of filing with a regulatory agency in preparation for the sale of those securities in a public ©2010 KPMG LLP. [Examples of such disclosures are provided in 25510-50-2 through 255-10-50-55.

Entities with simple capital structures. 260-10-15-3 The guidance in this Topic does not require presentation of EPS for investment companies that comply with the requirements of Topic 946 or in statements of wholly owned subsidiaries. . > Special Issues Affecting Basic and Diluted EPS >> Convertible Securities and the If-Converted Method >>> Contingently Convertible Instruments 260-10-45-44.Annual (12/10) Page 47 of 290 market. a Delaware limited liability partnership and the U. nonconvertible. Presentation > Required EPS Presentation on the Face of the Income Statement 260-10-45-2. including fully vested options and fully vested stock. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Any entity that is not required to present EPS in its financial statements that chooses to present EPS in its financial statements shall do so in accordance with the provisions of this Topic. are subject to the guidance in paragraph 260-10-45-60A (in this checklist). An entity that reports a discontinued operation or an extraordinary item in a period shall present basic and diluted per-share amounts for those line items either on the face of the income statement or in the notes to the financial statements. Fully vested stock-based compensation subject to the provisions of Topic 718. ©2010 KPMG LLP. EPS data shall be presented for all periods for which an income statement or summary of earnings is presented. that contain a right to receive dividends declared on the common stock of the issuer. All rights reserved. shall present basic per-share amounts for income from continuing operations and for net income on the face of the income statement. even if they are the same amounts as basic EPS. income before extraordinary items) whenever the line item income from continuing operations is referenced by the guidance in this Subtopic. those with only common stock outstanding. All other entities shall present basic and diluted per-share amounts for income from continuing operations and for net income on the face of the income statement with equal prominence. dual presentation can be accomplished in one line on the income statement. If basic and diluted EPS are the same amount. or potential common stock securities. a Swiss entity. irrespective of whether the securities are convertible. 260-10-45-61.Accounting Disclosure Checklist . 260-10-45-3. Contingently convertible instruments shall be included in diluted EPS (if dilutive) regardless of whether the market price trigger has been met. they shall be reported for all periods presented. shall be included in the computation of basic EPS using the two-class method. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common shareholders but does not require the presentation of basic and diluted EPS for securities other than common stock. 260-10-45-60A. that is. 260-10-45-7. All securities that meet the definition of a participating security. > > Participating Securities and the Two-Class Method 260-10-45-60.S. An entity that does not report a discontinued operation but reports an extraordinary item in the period shall use that line item (for example. The presentation of basic and diluted EPS for a participating security other than common stock is not precluded. If diluted EPS data are reported for at least one period.

If the number of common shares outstanding increases as a result of a stock dividend or stock split (see Subtopic 505-20) or decreases as a result of a reverse stock split. that fact shall be disclosed. If per-share computations reflect such changes in the number of shares. Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic EPS in the future that were not included in the computation of diluted EPS because to do so would have been antidilutive for the period(s) presented. the resolution of a contingency pursuant to a contingent stock agreement. c. All rights reserved. or convertible securities. b. the issuance of warrants.Accounting Disclosure Checklist . Full disclosure of the terms and conditions of these securities is required even if a security is not included in diluted EPS in the current period. an entity shall provide a description of any transaction that occurs after the end of the most recent period but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) that would have changed materially the number of common shares or potential common shares outstanding at the end of the period if the transaction had occurred before the end of the period. An entity is encouraged to refer to pertinent information about securities included in the EPS computations that is provided elsewhere in the financial statements as prescribed by Subtopic 50510. c. options. (e. A reconciliation of the numerators and the denominators of the basic and diluted per-share computations for income from continuing operations. issuance or acquisition of common shares. the per-share computations for those and any prior-period financial statements presented shall be based on the new number of shares. ©2010 KPMG LLP. Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of EPS pursuant to the twoclass method under the requirements of paragraph 260-10-45-60A (in this checklist). or reverse stock splits occur after the close of the period but before the financial statements are issued or are available to be issued (as discussed in Section 85510-25). b. Example 2 (see paragraph 260-10-55-51) illustrates that disclosure. 260-10-50-2. an entity shall disclose all of the following: a.g. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).. Presentation for the effect of stock dividends or stock splits is as follows: a. If changes in common stock resulting from stock dividends. . The reconciliation shall include the individual income and share amount effects of all securities that affect earnings per share (EPS). The effect that has been given to preferred dividends in arriving at income available to common stockholders in computing basic EPS. and the conversion or exercise of potential common shares outstanding at the end of the period into common shares) 260-10-55-12. For each period for which an income statement is presented. stock splits.S. a Delaware limited liability partnership and the U.Annual (12/10) Page 48 of 290 260-10-45-61A. Disclosure 260-10-50-1. For the latest period for which an income statement is presented. the computations of basic and diluted EPS shall be adjusted retroactively for all periods presented to reflect that change in capital structure. a Swiss entity.

The SEC staff believes that nominal issuances are recapitalizations in substance. nominal issuances of common stock should be reflected in a manner similar to a stock split or stock dividend for which retroactive treatment is required by paragraph 260-10-55-12. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). either on the face of the statement of financial position or in the notes to financial statements. undistributed earnings. unusual.B. If the limited liability company does not report the equity of each class of its members separately within the equity section.D. the aggregate effect of year-end adjustments that are material to the results of that quarter (see paragraphs 270-10-05-2 and 270-10-45-10) 18 Subtopic 272-10: Limited Liability Companies—Overall Note: See ASC paragraphs 272-10-45-1 through 45-7 for presentation guidance. users of the interim financial information often make inferences about that quarter by subtracting data based on the third quarter interim report from the annual results. Disclosure 272-10-50-1. a Swiss entity. disclose the following in the annual report in a note to the annual financial statements: a. it shall disclose those amounts in the notes to financial statements (see paragraph 272-10-50-3 in this checklist). > Nominal Issuances and Initial Public Offerings 2 SAB Topic 4.Annual (12/10) Page 49 of 290 SEC Guidance > Effect of Preferred Stock Dividends and Accretion of Carrying Amount of Preferred Stock on Earnings Per Share 1 SAB Topic 6. or unallocated capital). All rights reserved. or infrequently occurring items recognized in the fourth quarter c. a Delaware limited liability partnership and the U.S. If interim financial data and disclosures are not separately reported for the fourth quarter. In computing basic EPS for the periods covered by income statements included in the registration statement and in subsequent filings with the SEC. extraordinary. In the absence of a separate fourth quarter report or disclosure of the results (as outlined in the Interim Accounting Disclosure Checklist) for that quarter in the annual report. Income or loss applicable to common stock should be reported on the face of the income statement when it is materially different in quantitative terms from reported net income or loss or when it is indicative of significant trends or other qualitative considerations. If the limited liability company maintains separate accounts for components of members’ equity (for example.Accounting Disclosure Checklist . disposals of components of an entity b. 17 Subtopic 270-10: Interim Reporting—Overall (4th Quarter) (required for public entities only) Disclosure > Disclosure of Summarized Interim Financial Data by Publicly Traded Companies 270-10-50-2. . disclosure of those components. is ©2010 KPMG LLP. earnings available for withdrawal.

a Swiss entity.Accounting Disclosure Checklist . Method of accounting for the transfer of net assets or exchange of equity interests. The different classes of members’ interests and the respective rights. or earnings.Annual (12/10) Page 50 of 290 permitted. including the locations of those markets. 272-10-50-3. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). preferences. A description of any limitation of its members’ liability b. b. ©2010 KPMG LLP. the disclosure shall also indicate the relative importance of its operations in each business and the basis for this determination—for example. amounts shown for comparative purposes shall be comparable with those shown for the most recent period. and privileges of each class. . about equally. All rights reserved. ¶16. For limited liability companies formed by combining entities under common control or conversion from another type of entity.S. relative importance could be conveyed by use of terms such as predominately. PB 14. assets. or any exceptions to comparability shall be disclosed in the notes to financial statements. If the limited liability company has a finite life. revenues. the date it will cease to exist shall be disclosed. a Delaware limited liability partnership and the U. KPMG & Other Guidance 1 PB 14. if comparative financial statements are presented. Both of the following disclosures shall be made in the financial statements of a limited liability company: a. 2 19 Subtopic 275-10: Risks and Uncertainties—Overall Disclosure > Nature of Operations 275-10-50-2. For limited liability companies formed by combining entities under common control disclose the following items required by paragraph 805-50-50-3: a. Not-for-profit entities’ (NFPs’) disclosures should briefly describe the principal services performed by the entity and the revenue sources for the entity’s services. Financial statements shall include a description of the major products or services the reporting entity sells or provides and its principal markets. Disclosures about the nature of operations need not be quantified. ¶16. 272-10-50-4. Limited liability companies subject to income tax in any jurisdiction shall make the relevant disclosures under that Section. Section 740-10-50 requires specific disclosures relating to accounting for income taxes. or major and other. If the entity operates in more than one business. if applicable. Name and brief description of the entity included in the reporting entity as a result of the net asset transfer or exchange of equity interests. in the year of formation disclose the assets and liabilities previously held by a predecessor entity or entities. As indicated in paragraph 272-10-45-6. 272-10-50-2.

The disclosure shall indicate the nature of the uncertainty and include an indication that it is at least reasonably possible that a change in the estimate will occur in the near term. Disclosure regarding an estimate shall be made when known information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that both of the following criteria are met: a. > Use of Estimates in the Preparation of Financial Statements 275-10-50-4. (The term reasonably possible as used in this Subtopic is consistent with its use in Subtopic 450-20 to mean that the chance of a future transaction or event occurring is more than remote but less than likely. The estimate of the effect of a change in a condition. Various Topics require disclosures about uncertainties addressed by those Topics. as described below. a Swiss entity. or set of circumstances that existed at the date of the financial statements will change in the near term due to one or more future confirming events.S. . It is at least reasonably possible that the estimate of the effect on the financial statements of a condition.Accounting Disclosure Checklist . This Subtopic requires discussion of estimates when. In particular. In addition to disclosures required by Topic 450 and other accounting Topics. All rights reserved. it is reasonably possible that the estimate will change in the near term and the effect of the change will be material. situation. 275-10-50-8. this Subtopic requires disclosures regarding estimates used in the determination of the carrying amounts of assets or liabilities or in disclosure of gain or loss contingencies.) b. or set of circumstances that existed at the date of the financial statements shall be disclosed and the evaluation shall be based on known information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25). > Certain Significant Estimates 275-10-50-6. a Delaware limited liability partnership and the U. situation. Financial statements shall include an explanation that the preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires the use of management’s estimates. 275-10-50-9. ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). See Example 3 (paragraph 275-10-55-6) for an illustration of the disclosure requirements of the pervasiveness of estimates in the preparation of financial statements. See Examples 1 through 2 (paragraphs 275-10-55-2 through 55-5) for illustrations of disclosure requirements for nature of operations. Subtopic 450-20 specifies disclosures to be made about contingencies that exist at the date of the financial statements.Annual (12/10) Page 51 of 290 275-10-50-3. 275-10-50-5. 275-10-50-7. based on known information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25). The effect of the change would be material to the financial statements.

the disclosures described in paragraph 275-10-50-9 and disclosure of the risk-reduction techniques are encouraged but not required. Valuation allowances for deferred tax assets based on future taxable income d. All rights reserved. this Subtopic requires disclosure that it is at least reasonably possible that future events confirming the fact of the loss or the change in the estimated amount of the loss will occur in the near term. based on facts and circumstances existing at the date of the financial statements. Valuation allowances for commercial and real estate loans h. Environmental remediation-related obligations i. Capitalized computer software costs f. The words reasonably possible need not be used in the disclosures required by this Subtopic. and of disclosure of gain or loss contingencies included in financial statements that. a Swiss entity. Disclosure of the factors that cause the estimate to be sensitive to change is encouraged but not required. Litigation-related obligations ©2010 KPMG LLP. . If the entity determines that the criteria in paragraph 275-10-50-8 (in this checklist) are not met as a result of riskreduction techniques. a Delaware limited liability partnership and the U.Annual (12/10) Page 52 of 290 If the estimate involves a loss contingency covered by Subtopic 450-20. or state that such an estimate cannot be made. Specialized equipment subject to technological obsolescence c. If a loss contingency meets the criteria for disclosure under both Topic 450 and paragraph 275-10-50-8 (in this checklist). Many entities use risk-reduction techniques to mitigate losses or the uncertainty that may result from future events. the disclosure also shall include an estimate of the possible loss or range of loss. 275-10-50-10. 275-10-50-14. 275-10-50-15. The following are examples of assets and liabilities and related revenues and expenses. 275-10-50-12. but rather on the materiality of the effect that using a different estimate would have had on the financial statements. may be based on estimates that are particularly sensitive to change in the near term: a. Deferred policy acquisition costs of insurance entities g.Accounting Disclosure Checklist . Inventory subject to rapid technological obsolescence b. The requirements of paragraph 275-10-50-8 (in this checklist) are applicable to long-lived assets whose value may become impaired in the near term (see Subtopic 360-10).S. 275-10-50-13. Capitalized motion picture film production costs e. Whether an estimate meets the criteria for disclosure under this Subtopic does not depend on the amount that has been reported in the financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

> > Estimated Useful Life of an Intangible Asset 275-10-50-15A. All rights reserved. Amounts reported for long-term contracts. all of the following criteria are met: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 275-10-50-18. See Section 275-10-60 for links to illustrations of the disclosure requirements that are contained in other Topics. Amounts reported for long-term obligations. > Current Vulnerability Due to Certain Concentrations 275-10-50-16.S. (Group concentrations exist if a number of counterparties or items that have similar economic characteristics collectively expose the reporting entity to a particular kind of risk. In determining whether disclosure about an estimate of the useful life of an intangible asset is required under paragraph 275-10-50-8 (in this checklist). on disposition of a business or assets m. A change in the expected likelihood of renewal or extension of an intangible asset.) Some concentrations may fall into more than one of the following categories: a. and vary in significance. including known group concentrations. either individually or in aggregate by major intangible asset class: a. a Swiss entity. c. the criterion in item (b) of that paragraph shall be considered met if the effect of either of the following would be material to the financial statements. This Subtopic requires disclosure of certain defined concentrations known to management rather than a wider range of concentrations based on information of which management is reasonably expected to have knowledge. Concentrations in the volume of business transacted with a particular ©2010 KPMG LLP. Such risks of loss manifest themselves differently. The above list is not intended to be all-inclusive. 275-10-50-17. described below require disclosure if they meet the criteria of paragraph 275-10-50-16 (in this checklist).Annual (12/10) Page 53 of 290 j. a Delaware limited liability partnership and the U. The concentration exists at the date of the financial statements. . depending on the nature of the concentration. The concentration makes the entity vulnerable to the risk of a near-term severe impact. or both. It is at least reasonably possible that the events that could cause the severe impact will occur in the near term. Concentrations. Contingent liabilities for obligations of other entities k. the provisions for expected loss to be incurred. Financial statements shall disclose the concentrations described in paragraph 275-10-50-18 (in this checklist) if.Accounting Disclosure Checklist . Vulnerability from concentrations arises because an entity is exposed to risk of loss greater than it would have had it mitigated its risk through diversification. based on information known to management before the financial statements are issued or are available to be issued (as discussed in Section 855-1025). A change in the useful life of an intangible b. Estimated net proceeds recoverable. such as amounts reported for pensions and postemployment benefits l. b.

grantor. supplier. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). or contributor. disclosure shall include the carrying amounts of net assets and the geographic areas in which they are located. ©2010 KPMG LLP. are not addressed in this Subtopic. Concentrations in the market or geographic area in which an entity conducts its operations. However.Annual (12/10) Page 54 of 290 customer. a Swiss entity. Adequate information about some concentrations may already be presented in other parts of the financial statements. Concentrations in revenue from particular products. This Subtopic does not. a Delaware limited liability partnership and the U. grantor. In accordance with the guidance in this Subtopic. (2) For operations located outside the entity’s home country. or of licenses or other rights used in the entity’s operations. For purposes of this Subtopic. For purposes of this Subtopic. such as Subtopic 825-10 . 275-10-50-19. For example. Disclosure of concentrations meeting the criteria of paragraph 275-1050-16 (in this checklist) shall include information that is adequate to inform users of the general nature of the risk associated with the concentration. c. these other concentrations may be required to be disclosed pursuant to other Topics. grantors. such information need not be repeated. the following specific disclosures are required: (1) For labor subject to collective bargaining agreements. For those concentrations of labor (see paragraph 275-10-50-18(c) in this checklist) subject to collective bargaining agreements and concentrations of operations located outside of the entity’s home country (see paragraph 275-10-50-18(d) in this checklist) that meet the criteria in paragraph 275-10-50-16. it is always considered at least reasonably possible that any customer. however. Concentrations of financial instruments. adequate information about assets or operations located outside the entity’s home country may be included in disclosures made to comply with Subtopic 280-10. prohibit entities from also stating in disclosures of concentrations related to customers.S. labor. . disclosure shall include both the percentage of the labor force covered by a collective bargaining agreement and the percentage of the labor force covered by a collective bargaining agreement that will expire within one year. 275-10-50-20. b. and other concentrations not described in the preceding paragraph. 275-10-50-21. or services. lender. it is always considered at least reasonably possible that operations located outside an entity’s home country will be disrupted in the near term. or fund-raising events. d. All rights reserved. or contributors or operations located outside the entity’s home country that the entity does not expect that the business relationship will be lost or does not expect that the foreign operations will be disrupted if such is the case. or contributor will be lost in the near term. services. Concentrations in the available sources of supply of materials.Accounting Disclosure Checklist .

whether management has chosen to organize the public entity around differences in products and services. Revenues from transactions with other operating segments of the same public entity c. a Swiss entity.S. Depreciation. even if not included in that measure of segment profit or loss (see Example 3. A public entity shall disclose all of the following for each period for which an income statement is presented.Accounting Disclosure Checklist . 20 Subtopic 280-10: Segment Reporting—Overall (required for public entities only) Disclosure > Operating Segments > > Disclosure Requirements 280-10-50-20. > > > Information About Profit or Loss and Assets 280-10-50-22. Case B [paragraph 280-10-55-48]): a. geographic areas. A public entity shall report a measure of profit or loss and total assets for each reportable segment. reconciliations of balance sheet amounts for reportable segments to consolidated balance sheet amounts are required only for each year for which a balance sheet is presented. However. A public entity also shall disclose all of the following about each reportable segment if the specified amounts are included in the measure of segment profit or loss reviewed by the chief operating decision maker or are otherwise regularly provided to the chief operating decision maker. Case A [paragraph 280-10-55-47]): a. or a combination of factors and whether operating segments have been aggregated) b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Interest expense e. Types of products and services from which each reportable segment derives its revenues. > > > General Information 280-10-50-21. . Revenues from external customers b. Interest revenue d. Previously reported information for prior periods shall be restated as described in paragraphs 280-10-50-34 through 50-35 (in this checklist). See Examples 2 and 4 through 8 (paragraphs 275-10-55-4 and 275-1055-8 through 55-19) for illustrations of the disclosure requirements for current vulnerability due to certain concentrations. a Delaware limited liability partnership and the U. All rights reserved.Annual (12/10) Page 55 of 290 275-10-50-22. including the basis of organization (for example. and amortization expense ©2010 KPMG LLP. Factors used to identify the public entity’s reportable segments. depletion. A public entity shall disclose the following general information (see Example 3. regulatory environments.

Equity in the net income of investees accounted for by the equity method h. The nature of any differences between the measurements of the reportable segments’ profits or losses and the public entity’s consolidated income before income taxes. At a minimum. The amount of investment in equity method investees b. extraordinary items. If the segment has no financial operations or only immaterial financial operations. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Case B. paragraph 280-10-55-48): (1) Financial Instruments. > > > > Measurement 280-10-50-29. Cases A through C. a Swiss entity. a public entity shall disclose all of the following (see Example 3. (4) Deferred policy acquisition costs. 280-10-50-26. depletion. 280-10-50-24. Unusual items as described in paragraph 225-20-45-16 g. and amortization expense.S.Accounting Disclosure Checklist . no information about interest is required. A public entity shall disclose both of the following about each reportable segment if the specified amounts are included in the determination of segment assets reviewed by the chief operating decision maker or are otherwise regularly provided to the chief operating decision maker. . j. 280-10-50-25. a Delaware limited liability partnership and the U. that fact and the reason therefor shall be disclosed. paragraphs 280-10-55-47 through 55-49): a. (5) Deferred tax assets. and discontinued operations (if not ©2010 KPMG LLP. A public entity shall report interest revenue separately from interest expense for each reportable segment unless a majority of the segment’s revenues are from interest and the chief operating decision maker relies primarily on net interest revenue to assess the performance of the segment and make decisions about resources to be allocated to the segment. In that situation. A public entity shall provide an explanation of the measurements of segment profit or loss and segment assets for each reportable segment. All rights reserved. b. If a segment is primarily a financial operation. even if not included in the determination of segment assets: a. The basis of accounting for any transactions between reportable segments. interest revenue probably constitutes most of segment revenues and interest expense will constitute most of the difference between reported segment revenues and reported segment profit or loss. Extraordinary items Significant noncash items other than depreciation. (2) Long-term customer relationships of a financial institution. a public entity may report that segment’s interest revenue net of its interest expense and disclose that it has done so. Total expenditures for additions to long-lived assets other than any of the following (see Example 3.Annual (12/10) Page 56 of 290 f. (3) Mortgage and other servicing rights. Income tax expense or benefit i. If no asset information is provided for a reportable segment.

For example. All significant reconciling items shall be separately identified and described.Accounting Disclosure Checklist . However. the public entity may choose to reconcile the total of the segments’ measures of profit or loss to consolidated income after those items. e. Those differences could include accounting policies and policies for allocation of centrally incurred costs that are necessary for an understanding of the reported segment information. the amount of each significant adjustment to reconcile accounting methods used in determining segment profit or loss to the public entity’s consolidated amounts shall be separately identified and described. the ©2010 KPMG LLP. Case C [paragraphs 280-10-55-49 through 55-50]): a.Annual (12/10) Page 57 of 290 apparent from the reconciliations described in paragraphs 280-10-50-30 through 50-31). The total of the reportable segments’ revenues to the public entity’s consolidated revenues. The total of the reportable segments’ measures of profit or loss to the public entity’s consolidated income before income taxes. Those differences could include accounting policies and policies for allocation of jointly used assets that are necessary for an understanding of the reported segment information. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). in which case the public entity would reconcile the total of reportable segments’ liabilities for each segment to the public entity’s consolidated liabilities if the segment liabilities are significant. c. The nature of any differences between the measurements of the reportable segments’ assets and the public entity’s consolidated assets (if not apparent from the reconciliations described in paragraphs 280-10-50-30 through 50-31 in this checklist). 280-10-50-31. The total of the reportable segments’ assets to the public entity’s consolidated assets. a public entity may choose to disclose liabilities for its reportable segments. The nature of any changes from prior periods in the measurement methods used to determine reported segment profit or loss and the effect. The nature and effect of any asymmetrical allocations to segments. extraordinary items. if any. The total of the reportable segments’ amounts for every other significant item of information disclosed to the corresponding consolidated amount. a Swiss entity. b. d. > > > Reconciliations 280-10-50-30.S. . a Delaware limited liability partnership and the U. if a public entity allocates items such as income taxes and extraordinary items to segments. For example. A public entity shall provide reconciliations of all of the following (see Example 3. For example. of those changes on the measure of segment profit or loss. All rights reserved. a public entity might allocate depreciation expense to a segment without allocating the related depreciable assets to that segment. If a public entity changes the structure of its internal organization in a manner that causes the composition of its reportable segments to change. and discontinued operations. d. c. > > > Restatement of Previously Reported Information 280-10-50-34.

Annual (12/10) Page 58 of 290 corresponding information for earlier periods. a Swiss entity. a Delaware limited liability partnership and the U. All rights reserved. shall be restated unless it is impracticable to do so. Revenues from external customers attributed to the public entity’s country of domicile and attributed to all foreign countries in total from which the public entity derives revenues. If providing the information is impracticable.Accounting Disclosure Checklist . Although restatement is not required to reflect a change in measurement of segment profit and loss. 280-10-50-35. is not restated to reflect the change. A public entity shall report the following geographic information unless it is impracticable to do so (see Example 3. If providing the geographic information is impracticable. Long-lived assets other than financial instruments. Case D [paragraph 280-10-55-51]): a. > > > Information About Products and Services 280-10-50-40. those revenues shall be disclosed separately. including interim periods. > > > Entity-Wide Information 280-10-50-38. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). b. it is preferable to show all segment information on a comparable basis to the extent it is practicable to do so. mortgage and other servicing rights. those assets shall be disclosed separately. deferred policy acquisition costs. . long-term customer relationships of a financial institution. Information required by paragraphs 280-10-50-40 through 50-42 (in this checklist) need be provided only if it is not provided as part of the reportable operating segment information required by this Subtopic. If assets in an individual foreign country are material. in addition to the information required by the preceding paragraph. A public entity may wish to provide. that fact shall be disclosed. > > > Information About Geographic Areas 280-10-50-41. ©2010 KPMG LLP.S. A public entity shall disclose the basis for attributing revenues from external customers to individual countries. The amounts reported shall be based on the financial information that is used to produce the general-purpose financial statements. and deferred tax assets located in the public entity’s country of domicile and located in all foreign countries in total in which the public entity holds assets. Following a change in the composition of its reportable segments. The amounts of revenues reported shall be based on the financial information used to produce the public entity’s general-purpose financial statements. A public entity shall report the revenues from external customers for each product and service or each group of similar products and services unless it is impracticable to do so. If a public entity has changed the structure of its internal organization in a manner that causes the composition of its reportable segments to change and if segment information for earlier periods. a public entity shall disclose whether it has restated the corresponding items of segment information for earlier periods. 280-10-50-36. that fact shall be disclosed. including interim periods. If revenues from external customers attributed to an individual foreign country are material. the public entity shall disclose in the year in which the change occurs segment information for the current period under both the old basis and the new basis of segmentation unless it is impracticable to do so.

Case E [paragraph 280-10-55-52]). A public entity shall provide information about the extent of its reliance on its major customers. the public entity shall disclose that fact. SEC Guidance > Segment Disclosures 1 Regulation S-X Rule 3-03(e). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). and requires disclosures to be made at a greater level of disaggregation. To the extent that the segment information presented pursuant to this instruction complies with the provisions of Item 101 of Regulation S-K. or if management intends to make a change.S. If an entity changes the structure of its internal organization after fiscal year end. a county or municipality). ASU 2010-20 significantly increases disclosures about credit quality of financing receivables and the allowance for credit losses. The public entity need not disclose the identity of a major customer or the amount of revenues that each segment reports from that customer. 2 21 Subtopic 310-10: Receivables—Overall (prior to adoption of ASU 2010-20) Note: The content in this Subtopic has not been updated for ASU 2010-20. disclosures based on historical reportable segments should be presented until financial statements for the new structure are presented. a state government.Annual (12/10) Page 59 of 290 subtotals of geographic information about groups of countries. . a Delaware limited liability partnership and the U. 2005 SEC Staff Speech. If revenues from transactions with a single external customer amount to 10 percent or more of a public entity’s revenues. Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. Disclosures of information as of period-end are effective for public companies in interim and annual periods ending on or after December 15. a group of entities known to a reporting public entity to be under common control shall be considered as a single customer. the total amount of revenues from each such customer. the disclosures may be combined by cross referencing to or from the financial statements. see Section 22. while disclosures about activity occurring throughout the period are effective for interim and annual periods beginning on or after December 15.Accounting Disclosure Checklist . For entities that have adopted ASU 2010-20. Presentation > Loans or Trade Receivables ©2010 KPMG LLP. a Swiss entity. the new segment structure should not be presented in the financial statements until operating results of the new structure are reported. All rights reserved. Disclosures regarding segments required by generally accepted accounting principles shall be provided for each year for which an audited statement of income is provided. > > > Information About Major Customers 280-10-50-42. and the federal government. For purposes of this Subtopic. 2010. Similarly. and the identity of the segment or segments reporting the revenues. 2010. The ASU will be effective for nonpublic companies in fiscal years ending on or after December 15. a local government (for example. or a foreign government each shall be considered as a single customer (see Example 3. 2011.

> Bad-Debt Expense 310-10-45-6. notes or accounts receivable due from officers. The observable market price of an impaired loan or the fair value of the collateral of an impaired collateral-dependent loan may change from one reporting period to the next. trade receivables. or Affiliates 310-10-45-13.S. For guidance on a note received as a contribution to an entity’s equity. Unearned discounts (other than cash or quantity discounts and similar items). such as inventory. Employees. a Delaware limited liability partnership and the U. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). or retained interests in securitizations that can be contractually prepaid or otherwise settled in a way that the holder would not recover substantially all of its recorded investment ©2010 KPMG LLP. loans. shall not be classified separately if the assets subsequently are to be utilized by the entity in operations. and interest included in the face amount of receivables shall be shown as a deduction from the related receivables. All rights reserved. aggregate or individual asset basis) c. Loans or trade receivables may be presented on the balance sheet as aggregate amounts. The method used in determining the lower of cost or fair value of nonmortgage loans held for sale (that is. The classification and method of accounting for interest-only strips. As indicated in paragraph 850-10-50-2. a Swiss entity. > Foreclosed or Repossessed Assets 310-10-45-3. The summary of significant accounting policies shall include the following: a. finance charges. > Note Received as an Equity Contribution 310-10-45-14. Reporting the note as an asset is generally not appropriate. other receivables. Major categories of loans or trade receivables shall be presented separately either in the balance sheet or in the notes to the financial statements.Accounting Disclosure Checklist .Annual (12/10) Page 60 of 290 310-10-45-2. except in very limited circumstances when there is substantial evidence of ability and intent to pay within a reasonably short period of time. The basis for accounting for loans. or affiliated companies shall be shown separately and not included under a general heading such as notes receivable or accounts receivable. see paragraph 505-10-45-2 (in this checklist). > Receivables from Officers. Certain returned or repossessed assets. employees. However. > Unearned Discounts 310-10-45-8. Disclosure > Loans and Trade Receivables 310-10-50-2. Changes in observable market prices or the fair value of the collateral shall be reported as bad-debt expense or a reduction in bad-debt expense. including those classified as held for sale b. such receivables held for sale shall be a separate balance sheet category. Foreclosed and repossessed assets shall be classified as a separate balance sheet amount or included in other assets on the balance sheet with separate disclosures in the notes to financial statements. and lease financings. .

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . an entity shall disclose a description of the accounting policies and methodology the entity used to estimate its allowance for loan losses. For trade receivables that do not accrue interest until a specified period has elapsed. historical losses and existing economic conditions) and may also include discussion of risk elements relevant to particular categories of financial instruments. 310-10-50-4. and. whether past due status is based on how recently payments have been received or contractual terms) 310-10-50-7. trade receivables. a Delaware limited liability partnership and the U. > Accounting Policies for Credit Losses and Doubtful Accounts 310-10-50-9. The policy for placing loans and trade receivables.Accounting Disclosure Checklist .S. In addition to disclosures required by this Subsection and Subtopic 45020. past due 90 days or more and still accruing. trade receivable or other credit losses in the notes to the financial statements. All rights reserved. if applicable c. on nonaccrual status as of each balance sheet date b. any unamortized premiums and discounts. > Nonaccrual and Past Due Loans and Trade Receivables 310-10-50-6. shall be disclosed in the financial statements. securities and financial instruments that serve as collateral for borrowings. The method for recognizing interest income on loan and trade receivables. they shall be presented in the notes to the financial statements.Annual (12/10) Page 61 of 290 d. The policy for recording payments received on nonaccrual loans and trade receivables. The allowance for credit losses. and any liability for off-balance-sheet credit losses and related charges for loan. Such a description shall identify the factors that influenced management’s judgment (for example. nonaccrual status would be the point when accrual is suspended after the receivable becomes past due (310-10-50-8). The recorded investment in loans and trade receivables. The policy for resuming accrual of interest d. a Swiss entity. The summary of significant accounting policies shall include the following: a. if applicable. as applicable. if applicable. The recorded investment in loans and trade receivables. For required disclosures of the carrying amount of loans. and any net unamortized deferred fees and costs. If major categories of loans or trade receivables are not presented separately in the balance sheet. ©2010 KPMG LLP. any unearned income. allowance for doubtful accounts. The policy for charging off uncollectible loans and trade receivables e. the allowance for doubtful accounts. The following disclosures related to nonaccrual and past due loans and trade receivables are also required. > Assets Serving as Collateral 310-10-50-5. if applicable. The policy for determining past due or delinquency status (that is. a. 310-10-50-3. on nonaccrual status (or discontinuing accrual of interest) b. including a statement about the entity’s policy for treatment of related fees and costs. including the method of amortizing net deferred fees or costs. see paragraph 860-30-50-1A (in this checklist).

All rights reserved. as discussed in paragraphs 310-30-35-8(a) and 310-30-35-10(a). Information about loans meeting the scope of Subtopic 310-30. and recoveries of amounts previously charged off. a Delaware limited liability partnership and the U. and other similar instruments. As of the date of each statement of financial position presented. direct write-downs charged against the allowance. except for instruments within the scope of Topic 815. . shall be included in the disclosures required by paragraph 310-10-50-15(a) through (b) (in this checklist) as noted above if there has been an other-than-temporary decline in the fair value of a loan below amortized cost (see paragraphs 320-10-35-18 through 35-34) or if it is probable that a loan has been impaired (see 450-20-25-2(a)). all of the following information about loans that meet the definition of an impaired loan in paragraphs 310-10-35-16 through 35-17: a.Annual (12/10) Page 62 of 290 310-10-50-10. For each period for which results of operations are presented. Paragraphs 310-10-45-5 through 45-6 explains that a creditor that measures impairment based on the present value of expected future cash flows is ©2010 KPMG LLP. additions charged to operations. the total recorded investment in the impaired loans at the end of each period and both of the following: 1 The amount of that recorded investment for which there is a related allowance for credit losses determined in accordance with Section 31010-35 and the amount of that allowance 2 The amount of that recorded investment for which there is no related allowance for credit losses determined in accordance with Section 31010-35. the average recorded investment in the impaired loans during each period. b. either in the body of the financial statements or in the accompanying notes. 310-10-50-19. Loans and Debt Securities Acquired with Deteriorated Credit Quality. the related amount of interest income recognized during the time within that period that the loans were impaired. A creditor shall disclose. 310-10-50-16. Those disclosures noted above in paragraph 310-10-50-15 shall be provided for impaired loans that have been charged off partially. including the balance in the allowance at the beginning and end of each period.Accounting Disclosure Checklist . financial guarantees. Off-balance-sheet credit losses refers to losses on off-balance-sheet loan commitments.S. a Swiss entity. > Impaired Loans 310-10-50-15. a creditor shall disclose the activity in the total allowance for credit losses related to loans. > Allowance for Credit Losses Related to Loans 310-10-50-12. the amount of interest income recognized using a cash-basis method of accounting during the time within that period that the loans were impaired. For each period for which results of operations are presented. standby letters of credit. including how cash receipts are recorded c. Those disclosures cannot be provided for loans that have been charged off fully because both the recorded investment and the allowance for credit losses will equal zero. unless not practicable. The creditor’s policy for recognizing interest income on impaired loans. 310-10-50-14. 310-10-50-18. Asset valuation allowances for losses such as those on receivables and investments shall be deducted from the assets or groups of assets to which the allowances relate and shall have an appropriate disclosure. and. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

The nature of the contingency b. Paragraph 825-10-50-14 explains that.S. a Swiss entity. The reporting entity shall include in the disclosure both of the following: a. it is not probable that a loss has been incurred. Receivables for insurance recoveries ©2010 KPMG LLP. or both). a Delaware limited liability partnership and the U.e. no disclosure is required under that Topic when the carrying amount approximates fair value. See Section 450-20-50 for further guidance on required disclosures for loss contingencies. Section 825-10-50 provides guidance on the required disclosure of fair values of certain assets and liabilities. 310-10-50-22. All rights reserved. or the loss is not reasonably estimable. as discussed in paragraph 275-10-50-1. > Imputed Interest 835-30-45-2 The description of a note with imputed interest shall include the effective interest rate. > Risks and Uncertainties 310-10-50-25.Annual (12/10) Page 63 of 290 permitted to report the entire change in present value as bad-debt expense but may also report the change in present value attributable to the passage of time as interest income. for trade receivables and payables. 310-10-50-24. . insurance receivables and the related liabilities should be presented gross on the balance sheet. > Fair Value Disclosures 310-10-50-26. 3 In the typical situation where an insured entity is not released from being the primary obligor of the liability. a schedule of annual amounts due should be furnished. Creditors that choose the latter alternative shall disclose the amount of interest income that represents the change in present value attributable to the passage of time. disclosure of the loss contingency shall be made if there is at least a reasonable possibility that a loss or an additional loss may have been incurred. See Section 275-10-50 for disclosure guidance related to those loan products. > Loss Contingencies 310-10-50-21. For circumstances in which no accrual is made for a loss contingency because one or both of the conditions in paragraph 450-20-25-2 are not met (i.Accounting Disclosure Checklist . An estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. KPMG & Other Guidance 1 If operating cycle is longer than a year. The face amount shall also be disclosed in the financial statements or in the notes to the statements. 2 If amounts of installment receivables that will be collected after one year are material to an understanding of liquidity. Certain loan products have contractual terms that expose entities to risks and uncertainties that fall into one or more categories.. or if an exposure to loss exists in excess of the amount accrued pursuant to the provisions of paragraph 450-20-25-2. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). disclose estimate of amounts realizable within one year. Paragraph 460-10-50-2 (in this checklist) states that an entity shall disclose certain loss contingencies even though the possibility of loss may be remote.

Disclosures of information as of period-end are effective for public companies in interim and annual periods ending on or after December 15.281. an entity should provide comparative disclosures for those reporting periods ending after initial adoption. a Delaware limited liability partnership and the U. > Foreclosed or Repossessed Assets 310-10-45-3. 2011. notes or accounts receivable due ©2010 KPMG LLP. As indicated in paragraph 850-10-50-2. or Affiliates 310-10-45-13.5). 2010. 99. Changes in observable market prices or the fair value of the collateral shall be reported as bad-debt expense or a reduction in bad-debt expense. ASU 2010-20 significantly increases disclosures about credit quality of financing receivables and the allowance for credit losses. Foreclosed and repossessed assets shall be classified as a separate balance sheet amount or included in other assets on the balance sheet with separate disclosures in the notes to financial statements. and requires disclosures to be made at a greater level of disaggregation. Employees.Annual (12/10) Page 64 of 290 should not be netted against the related liabilities or otherwise grouped to offset impairment losses unless the right of setoff exists under Subtopic 210-20. Major categories of loans or trade receivables shall be presented separately either in the balance sheet or in the notes to the financial statements. finance charges. (ASC Section 210-20-45) (KARG 49.4. Unearned discounts (other than cash or quantity discounts and similar items). > Bad-Debt Expense 310-10-45-6. such receivables held for sale shall be a separate balance sheet category. Presentation > Loans or Trade Receivables 310-10-45-2. a Swiss entity. 2010. while disclosures about activity occurring throughout the period are effective for interim and annual periods beginning on or after December 15. The observable market price of an impaired loan or the fair value of the collateral of an impaired collateral-dependent loan may change from one reporting period to the next. The amendments in this ASU encourage. 99. Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. All rights reserved. such as inventory. but do not require. . comparative disclosures for earlier reporting periods that ended before initial adoption. 99.S.Accounting Disclosure Checklist . Loans or trade receivables may be presented on the balance sheet as aggregate amounts. > Unearned Discounts 310-10-45-8. and interest included in the face amount of receivables shall be shown as a deduction from the related receivables.079. The ASU will be effective for nonpublic companies in fiscal years ending on or after December 15. However. 22 Subtopic 310-10: Receivables—Overall (after the adoption of ASU 2010-20) Note: The content in this Subtopic has been updated for ASU 2010-20. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). shall not be classified separately if the assets subsequently are to be utilized by the entity in operations. However. Certain returned or repossessed assets. > Receivables from Officers.

loans. see paragraph 505-10-45-2 (in this checklist). The guidance in paragraphs 310-10-50-2 through 50-4A applies only to the following financing receivables: a. For required disclosures of the carrying amount of loans. The classification and method of accounting for interest-only strips. The method for recognizing interest income on loan and trade receivables. including the method of amortizing net deferred fees or costs. Loans b. The basis for accounting for loans and trade receivables b. > Nonaccrual and Past Due Financing Receivables ©2010 KPMG LLP. Reporting the note as an asset is generally not appropriate. as applicable. securities and financial instruments that serve as collateral for borrowings. . The allowance for credit losses (also referred to as the allowance for doubtful accounts) and. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 310-10-50-4A.Accounting Disclosure Checklist . Disclosure > Loans and Trade Receivables 310-10-50-1A. including a statement about the entity’s policy for treatment of related fees and costs. 310-10-50-3.Annual (12/10) Page 65 of 290 from officers. Trade receivables 310-10-50-2. a Delaware limited liability partnership and the U. aggregate or individual asset basis) c. or retained interests in securitizations that can be contractually prepaid or otherwise settled in a way that the holder would not recover substantially all of its recorded investment d.S. The method used in determining the lower of cost or fair value of nonmortgage loans held for sale (that is. For guidance on a note received as a contribution to an entity’s equity. or affiliated companies shall be shown separately and not included under a general heading such as notes receivable or accounts receivable. > Note Received as an Equity Contribution 310-10-45-14. except in very limited circumstances when there is substantial evidence of ability and intent to pay within a reasonably short period of time. The summary of significant accounting policies shall include the following: a. shall be disclosed in the financial statements. any unamortized premiums and discounts. They arose from the sale of goods or services. > Assets Serving as Collateral 310-10-50-5. trade receivables. employees. and any net unamortized deferred fees and costs. see paragraph 860-30-50-1A (in this checklist). If major categories of loans or trade receivables are not presented separately in the balance sheet. 310-10-50-4. other receivables. they shall be presented in the notes to the financial statements. Except for credit card receivables. They have contractual maturity of one year or less b. All rights reserved. a Swiss entity. an entity shall disclose its policy for charging off uncollectible trade accounts receivable that have both of the following characteristics: a. any unearned income.

The recorded investment in financing receivables on nonaccrual status b. The recorded investment in financing receivables past due 90 days or more and still accruing. > Accounting Policies for Off-Balance-Sheet Credit Exposures 310-10-50-9. 310-10-50-7A. as determined by the entity’s policy. 310-10-50-6. The guidance in paragraphs 310-10-50-6 through 50-8 does not apply to loans acquired with deteriorated credit quality (accounted for under Subtopic 31030). An entity shall provide an analysis of the age of the recorded investment in financing receivables at the end of the reporting periods that are past due. Trade accounts receivable. except for credit card receivables. The policy for recording payments received on nonaccrual financing receivables. In addition to disclosures required by Subtopic 450-20. a. 310-10-50-5B. An entity’s summary of significant accounting policies for financing receivables shall include all of the following: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The policy for determining past due or delinquency status. a Swiss entity. an entity shall disclose a description of the accounting policies and methodology the entity used ©2010 KPMG LLP.S. The policy for placing financing receivables. Receivables measured at lower of cost or fair value c. The guidance in paragraph 310-10-80-7A does not apply to the following receivables: a.Annual (12/10) Page 66 of 290 310-10-50-5A. Receivables measured at fair value with changes in fair value reported in earnings b. [not used] e. . They have a contractual maturity of one year or less 2. The guidance in paragraphs 310-10-50-6 through 50-7A shall be provided by class of financing receivable except for the following financing receivables: a. d. All rights reserved. on nonaccrual status (or discontinuing accrual of interest) b. They arose from the sale of goods or services d. Participant loans in defined contribution pension plans. An entity shall provide both of the following disclosures related to nonaccrual and past due financing receivables as of each balance sheet date. Receivables measured at fair value with changes in fair value reported in earnings b. They arose from the sale of goods or services. They have a contractual maturity of one year or less 2. Participant loans in defined contribution pension plans. 310-10-50-7B. Except for credit card receivables. trade receivables that have both of the following characteristics: 1. that have both of the following characteristics: 1. The policy for resuming accrual of interest d. a Delaware limited liability partnership and the U. if applicable c.Accounting Disclosure Checklist . Receivables measured at lower of cost or fair value c. if applicable. 310-10-50-7.

d. historical losses and existing economic conditions) and a discussion of risk elements relevant to particular categories of financial instruments. Off-balance-sheet credit exposures refers to credit exposures on offbalance-sheet loan commitments. a Delaware limited liability partnership and the U. 2 A discussion of risk characteristics relevant to each portfolio segment 3 Identification of any changes to the entity’s accounting policies or methodology from the prior period and the entity’s rationale for the change. 2010. including both of the following: i. financial guarantees. An entity shall disclose all of the following by portfolio segment: a. Lessor’s net investments in leveraged leases. A description of the entity’s accounting policies and methodology used to estimate the allowance for credit losses. The guidance in paragraph 310-10-50-11B does not apply to the following financing receivables: a. The amount of any significant purchases of financing receivables during each reporting period (Note: Required for interim and annual periods beginning on or after December 15. including all of the following: (Note: Required for interim and annual periods beginning on or after December 15. b.Accounting Disclosure Checklist . A description of the policy for charging off uncollectible financing receivables c. The activity in the allowance for credit losses for each period.) g. The amount of any significant sales of financing receivables or reclassifications of financing receivables to held for sale during each reporting period (Note: Required for interim and annual periods beginning on or after December 15. standby letters of credit. Financing receivables listed in paragraph 310-10-50-7B b. All rights reserved.Annual (12/10) Page 67 of 290 to estimate liability for off-balance-sheet credit exposures and related charges for those credit exposures. Such a description shall identify the factors that influenced management’s judgment (for example. Historical losses ii.) f. except for instruments within the scope of Topic 815. > Allowance for Credit Losses Related to Financing Receivables 310-10-50-11A.) 1 The balance in the allowance at the beginning and end of each period 2 Current period provision 3 Direct write-downs charged against the allowance 4 Recoveries of amounts previously charged off. The quantitative effect of changes identified in item (a)(2) on item (c)(2) e. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 310-10-50-10. 310-10-50-11B. Existing economic conditions. 2010.S. a Swiss entity. The balance in the allowance for credit losses at the end of each period ©2010 KPMG LLP. . and other similar instruments. 2010. including all of the following: 1 A description of the factors that influenced management’s judgment.

The entity’s policy for recognizing interest income on impaired loans.Annual (12/10) Page 68 of 290 disaggregated on the basis of the entity’s impairment method h. b. including how cash receipts are recorded c. disaggregated on the basis of the entity’s impairment methodology in the same manner as the disclosure in item (g). The related amount of interest income recognized during the time ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The accounting for impaired loans b. an entity shall separately disclose the following amounts: a. . The recorded investment in financing receivables at the end of each period related to each balance in the allowance for credit losses. 2010. 310-10-50-15. a Delaware limited liability partnership and the U. 310-10-50-11C. All rights reserved. The amount of that recorded investment for which there is no related allowance for credit losses determined in accordance with Section 310-10-35. The amount of impaired loans. The amount of that recorded investment for which there is a related allowance for credit losses determined in accordance with Section 310-10-35 and the amount of that allowance ii. Amounts collectively evaluated for impairment (determined under Subtopic 450-20) b. 310-10-50-14. To disaggregate the information required by items (g) and (h) in the preceding paragraph on the basis of the impairment methodology. As of the date of each statement of financial position presented: 1 [not used] 2 [not used] 3 The recorded investment in impaired loans and both of the following: i. > Impaired Loans 310-10-50-14A. For each class of financing receivable. an entity shall disclose both of the following for loans that meet the definition of an impaired loan in paragraphs 310-10-35-16 through 35-17 (individually evaluated for impairment): a. The average recorded investment in the impaired loans 2. Amounts related to loans acquired with deteriorated credit quality (determined under Subtopic 310-30).) 1. Amounts individually evaluated for impairment (determined under Section 310-10-35) c. a Swiss entity. An entity shall disclose all of the following information about loans that meet the definition of an impaired loan in paragraphs 310-10-35-16 through 35-17 by class of financing receivable: a.S. 4 The total unpaid principal balance of the impaired loans. Asset valuation allowances for losses such as those on receivables and investments shall be deducted from the assets or groups of assets to which the allowances relate and shall have an appropriate disclosure. For each period for which results of operations are presented: (Note: Required for interim and annual periods beginning on or after December 15.Accounting Disclosure Checklist .

Information about loans meeting the scope of Subtopic 310-30. See Section 275-10-50 for disclosure guidance related to those loan products. a Delaware limited liability partnership and the U. Those disclosures cannot be provided for loans that have been charged off fully because both the recorded investment and the allowance for credit losses will equal zero. The entity’s policy for determining which loans the entity assesses for impairment under Section 310-10-35 e. 310-10-50-19. as discussed in paragraphs 310-30-35-8(a) and 310-30-35-10(a). All rights reserved. Section 825-10-50 provides guidance on the required disclosure of fair values of certain assets and liabilities.Annual (12/10) Page 69 of 290 within that period that the loans were impaired 3. d.Accounting Disclosure Checklist . Those disclosures shall be provided for impaired loans that have been charged off partially. no disclosure is required under that Topic when the carrying amount approximates fair value. 310-10-50-16. Paragraphs 310-10-45-5 through 45-6 explains that a creditor that measures impairment based on the present value of expected future cash flows is permitted to report the entire change in present value as bad-debt expense but may also report the change in present value attributable to the passage of time as interest income. The factors considered in determining that the loan is impaired. > Credit Quality Information ©2010 KPMG LLP. if practicable. > Loss Contingencies 310-10-50-21. Creditors that choose the latter alternative shall disclose the amount of interest income that represents the change in present value attributable to the passage of time. Paragraph 825-10-50-14 explains that. or if an exposure to loss exists in excess of the amount accrued pursuant to the provisions of paragraph 450-20-25-2. > Fair Value Disclosures 310-10-50-26. . shall be included in the disclosures required by paragraph 310-10-50-15(a) through (b) (in this checklist) as noted above if there has been an other-than-temporary decline in the fair value of a loan below amortized cost (see paragraphs 320-10-35-18 through 35-34) or if it is probable that a loan has been impaired (see 450-20-25-2(a)). > Risks and Uncertainties 310-10-50-25. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Certain loan products have contractual terms that expose entities to risks and uncertainties that fall into one or more categories.S. The disclosures required by paragraphs 450-20-50-3 through 50-6 do not apply to loss contingencies arising from an entity’s estimation of its allowance for credit losses. Paragraph 450-20-50-3 provides disclosure guidance for circumstances in which no accrual is made for a loss contingency because one or both of the conditions in paragraph 450-20-25-2 (probable and reasonable estimated) are not met. 310-10-50-18. a Swiss entity. as discussed in paragraph 275-10-50-1. for trade receivables and payables. The amount of interest income recognized using a cash-basis method of accounting during the time within that period that the loans were impaired. Loans and Debt Securities Acquired with Deteriorated Credit Quality.

They arose from the sale of goods or services. an entity ©2010 KPMG LLP. Participant loans in defined contribution pension plans. trade accounts receivable that have both of the following characteristics: 1. including all of the following: a. Except for credit card receivables. Receivables measured at fair value with changes in fair value reported in earnings b. . Receivables measured at lower of cost or fair value c. All rights reserved. the guidance in paragraphs 310-10-50-33 through 50-34 applies only to a creditor’s troubled debt restructurings of financing receivables. If an entity discloses internal risk ratings. Assess the quantitative and qualitative risks arising from the credit quality of its financing receivables. The recorded investment in financing receivables by credit quality indicator c. 310-10-50-29. the Board decided to defer the effective date for disclosures about trouble debt restructurings in ASU 2010-20 (paragraphs 310-10-50-31 through 50-34) to make it concurrent with the effective date of proposed guidance to be issued at a later date on identifying a troubled debt restructuring. > Modifications Note: At the December 1. an entity shall provide quantitative and qualitative information by class about the credit quality of its financing receivables. Except as noted in the following paragraph. a Delaware limited liability partnership and the U. For each period for which a statement of income is presented. the date or range of dates in which the information was updated for that credit quality indicator. To meet the objective in the preceding paragraph. For each credit quality indicator. Understand how and to what extent management monitors the credit quality of its financing receivables in an ongoing manner b. then the entity shall provide qualitative information on how those internal risk ratings relate to the likelihood of loss. 310-10-50-30. Loans acquired with deteriorated credit quality (determined under Subtopic 310-30) that are accounted for within a pool. The guidance in paragraphs 310-10-50-28 through 50-30 does not apply to the financing receivables listed below: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). A final ASU deferring the effective date is expected to be issued shortly. 310-10-50-31. They have a contractual maturity of one year or less 2. Financing receivables listed in paragraph 310-10-50-7B b.Annual (12/10) Page 70 of 290 310-10-50-27. 310-10-50-28. d. A description of the credit quality indicator b.S. 2010 FASB meeting. This guidance does not apply to troubled debt restructurings of either of the following: a. For purposes of this disclosure guidance. a creditor’s modification of a lease receivable that meets the definition of a troubled debt restructuring is subject to this disclosure guidance. 310-10-50-32. An entity shall provide information that enables financial statement users to do both of the following: a. 310-10-50-33. a Swiss entity.Accounting Disclosure Checklist .

The face amount shall also be disclosed in the financial statements or in the notes to the statements.) a.Accounting Disclosure Checklist . By class of financing receivable. 310-10-50-34. Identify each such class of valuation and qualifying accounts and reserves by descriptive title. List by major classes. 2010 and expected to be deferred further as described above. The types of financing receivables that defaulted. qualitative information about how such defaults are factored into the determination of the allowance for credit losses. a Delaware limited liability partnership and the U.Annual (12/10) Page 71 of 290 shall disclose the following about troubled debt restructurings of financing receivables that occurred during the period: (Note: Currently required for interim and annual periods beginning on or after December 15. SEC Guidance 1 Regulation S-X Rule 12-09.S. b. How the financing receivables were modified 2. b. -- ©2010 KPMG LLP. all valuation and qualifying accounts and reserves not included in specific schedules. . All rights reserved. The amount of financing receivables that defaulted. By portfolio segment. Group (a) those valuation and qualifying accounts which are deducted in the balance sheet from the assets to which they apply and (b) those reserves which support the balance sheet caption. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The financial assets of the modifications. qualitative and quantitative information. qualitative information about how such modifications are factored into the determination of the allowance for credit losses.) a. 2. qualitative and quantitative information about those defaulted financing receivables. including both of the following: 1. By class of financing receivable. a Swiss entity. > Imputed Interest 835-30-45-2 The description of a note with imputed interest shall include the effective interest rate. Reserves Valuation and qualifying accounts and reserves as to which the additions. and balances were not individually significant may be grouped in one total and in such case the information called for under columns C and D need not be given. For each period for which a statement of income is presented. 2010 and expected to be deferred further as described above. By portfolio segment. an entity shall disclose the following for financing receivables modified as troubled debt restructurings within the previous 12 months and for which there was a payment default during the period: (Note: Currently required for interim and annual periods beginning on or after December 15. deductions. including both of the following: 1.

it is not appropriate to delay recognition of credit losses that can be estimated based on current information and events. Receivables for insurance recoveries should not be netted against the related liabilities or otherwise grouped to offset impairment losses unless the right of setoff exists under Subtopic 210-20. development. 2006): a. Acquisition. a schedule of annual amounts due should be furnished. Those suggested MD&A disclosure items include information about higher-risk loans. and construction arrangements accounted for as loans. KPMG & Other Guidance 1 If operating cycle is longer than a year. Explain how it determines which loans/receivables are initially accounted for as held for sale or are later transferred to the held for sale classification. d. disclose estimate of amounts realizable within one year. SEC Guidance 1 See SAB Topic 1. a Delaware limited liability partnership and the U. 3 Registrants accounting for loans and receivables that it intends to sell under Section 310-10-35 should consider the need for the following additional clarifying disclosures (SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. 3 In the typical situation where an insured entity is not released from being the primary obligor of the liability.281. a Swiss entity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Reconcile the changes in loans/receivables held for sale balances to the amounts presented in the consolidated statement of cash flows. changes in practices for determining the allowance for loan losses. 23 Acquisition. 2 If amounts of installment receivables that will be collected after one year are material to an understanding of liquidity.Accounting Disclosure Checklist . November 30. 2 . Identify the amount of loans/receivables held for sale. development. The letter states that the SEC will take appropriate action if it believes that a financial institution’s financial statements are inconsistent with GAAP. c. (ASC Section 210-20-45) (KARG 49. Development. b. 99. Describe the method it uses to determine the lower of cost or fair value for loans/receivables held for sale.Annual (12/10) Page 72 of 290 August 2009.4. 99. and Construction (ADC) Arrangements Subsection of Subtopic 31010: Receivables—Overall Presentation 310-10-45-15.S. and construction ©2010 KPMG LLP. Dear CFO letter. The SEC’s letter also contained a reminder that.I for SEC Staff views on disclosures and separate financial statement requirements related to acquisition. 99. Letter issued to certain financial institutions expressing views about a number of disclosures related to provisions and allowances for loan losses that should be considered in preparing Management’s Discussion and Analysis (MD&A). insurance receivables and the related liabilities should be presented gross on the balance sheet.5). and declines in collateral value.079. development. and construction arrangements accounted for as investments in real estate or joint ventures shall be combined and reported in the balance sheet separately from those acquisition. while the determination of allowances for loan losses requires management to apply judgment. All rights reserved.

Amortization of other fees. commitment. All rights reserved.Annual (12/10) Page 73 of 290 arrangements. a Swiss entity.S. shall be reported as service fee income. The unamortized net fees and costs shall be reported as a part of each loan category. The summary of significant accounting policies shall include the method for recognizing interest income on loan and trade receivables. 310-20-50-2. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). With respect to credit card fees and costs for both purchased and originated credit cards. . commitment. Additional disclosures such as unamortized net fees and costs may be included in the footnotes to the financial statements if the lender believes that such information is useful to the users of financial statements. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . and other fees and costs recognized as an adjustment of yield shall be reported as part of interest income. 24 Subtopic 310-20: Receivables—Nonrefundable Fees and Other Costs Presentation > Balance Sheet Classification 310-20-45-1 The unamortized balance of loan origination. 2010-18. > Income Statement Classification 310-20-45-3. 25 Subtopic 310-30: Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality Note: The FASB recently issued Accounting Standards Update No. such as commitment fees that are being amortized on a straight-line basis over the commitment period or included in income when the commitment expires. and other fees and costs and purchase premiums and discounts that is being recognized as an adjustment of yield pursuant to this Subtopic shall be reported on the entity’s balance sheet as part of the loan balance to which it relates. Receivables (Topic 310): Effect of a Loan Modification When the Loan is Part of a Pool That is Accounted for as a Single Asset (EITF 09-I). including a statement about the entity’s policy for treatment of related fees and costs. Under ASU 2010-18. 310-20-50-3. Disclosure > Net Fees and Costs 310-20-50-1. Purchased loans evidencing credit deterioration at the time of acquisition (purchased creditimpaired loans) may be grouped together and accounted for as a single asset if they have common risk characteristics. and the amortization period(s). a modified loan in a pool of purchased credit-impaired loans should remain in the pool even if the ©2010 KPMG LLP. Entities that anticipate prepayments in applying the interest method shall disclose that policy and the significant assumptions underlying the prepayment estimates. the net amount capitalized at the balance sheet date. 310-20-45-2. an entity shall disclose its accounting policy. 310-20-50-4. Commitment fees that meet the criteria of paragraph 310-20-35-3 shall be classified as deferred income in the financial statements. including the method of amortizing net deferred fees or costs. Amounts of loan origination.

. 2 The amount of accretable yield at the beginning and end of the period. ASU 2010-18 is effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim and annual reporting period ending after July 15. For loans that have a net carrying amount. Amounts legally discharged shall not be included. penalties. The outstanding balance does not include amounts that would be accrued under the contract as interest.Annual (12/10) Page 74 of 290 modification would otherwise be considered a troubled debt restructuring. fees. In addition to disclosures required by other generally accepted accounting principles (GAAP). a loss accrual. and other after the reporting date. cash flows expected to be collected. All rights reserved. for each balance sheet presented. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). fees. and other under the loan. Disclosure > Footnote Disclosures for Loans 310-30-50-1. 310-30-50-2. all of the following: 1 The outstanding balance and related carrying amount at the beginning and end of the period. whether or not currently due and whether or not any such amounts have been written or charged off by the investor. which may be made on a pool-by-pool basis. a Delaware limited liability partnership and the U. and by any other means shall be included. Presentation > Accretable Yield 310-30-45-1. an investor shall disclose the following information about loans within the scope of this Subtopic: a. The loan’s contractually required payments receivable in excess of the amount of its cash flows expected at acquisition (nonaccretable difference) shall not be displayed in the balance sheet or recognized as an adjustment of yield.Accounting Disclosure Checklist .S. 2010. The ASU does not require additional disclosures about modifications within a pool. and reclassifications to or from nonaccretable difference during the period 3 For loans acquired during the period. or a valuation allowance for credit risk. Amounts forgiven in a debt restructuring but contingently payable to the investor shall be included in the forgiven contract balance. A onetime election to terminate accounting for loans in a pool. Separately for both those loans that are accounted for as debt securities and those loans that are not accounted for as debt securities. penalties. and fair value at the acquisition date 4 For those loans within the scope of this Subtopic for which the income recognition model in this Subtopic is not applied in accordance with paragraph 310-30-35-3. accretion. is provided upon adoption of the ASU. disposals of loans. The notes to financial statements shall describe how prepayments are considered in the determination of contractual cash flows and cash flows expected to be collected. owed to the investor at the reporting date. the contractually required payments receivable. the carrying amount at the acquisition date for loans acquired during the period and the carrying amount of all loans at ©2010 KPMG LLP. including amounts deemed principal. but amounts irrevocably forgiven in a debt restructuring shall not be included. Amounts payable to the investor in cash. reconciled for additions. a Swiss entity. The amount of accretable yield shall not be displayed in the balance sheet. in kind. the outstanding balance is the undiscounted sum of all amounts. interest.

for those loans that are not accounted for as debt securities. . either in the body of the financial statements or in the accompanying notes. both of the following: 1 The amount of both of the following: a. a Delaware limited liability partnership and the U. All rights reserved.Accounting Disclosure Checklist . b. the restructured loans shall be considered separately when assessing the applicability of the disclosures in paragraphs 310-10-50-15 (in this checklist).Annual (12/10) Page 75 of 290 the end of the period. SEC Guidance > Impaired Loans Restructured in a Troubled Debt Restructuring 1 SEC Observer Comment: Applicability of the Disclosures Required by Topic 310 when a Loan is Restructured in a Troubled Debt Restructuring into Two or More Loans. Further. > Loan Restructured Into Two (or More) Loan Agreements 310-40-50-5. the SEC staff is ©2010 KPMG LLP. 26 Subtopic 310-40: Receivables—Troubled Debt Restructurings by Creditors Disclosure > Creditor Disclosure of Troubled Debt Restructurings 310-40-50-1. if any. b.S. Any expense recognized pursuant to paragraph 310-30-35-10(a) b. The loan is not impaired based on the terms specified by the restructuring agreement. 2 The amount of the allowance for uncollectible accounts at the beginning and end of the period. to lend additional funds to debtors owing receivables whose terms have been modified in troubled debt restructurings. When a loan is restructured in a troubled debt restructuring into two (or more) loan agreements. Any reductions of the allowance recognized pursuant to paragraph 310-30-35-10(b)(1) for each period for which an income statement is presented. The creditor would continue to base its measure of loan impairment on the contractual terms specified by the original loan agreement in accordance with paragraphs 310-10-35-20 through 35-26 and 310-10-35-37. 310-40-50-2. That exception shall be applied consistently for paragraph 310-10-5015(in this checklist) to all loans restructured in a troubled debt restructuring that meet the criteria in the preceding paragraph. The restructuring agreement specifies an interest rate equal to or greater than the rate that the creditor was willing to accept at the time of the restructuring for a new loan with comparable risk. the amount of commitments. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). With respect to paragraph 310-40-50-5 noted above. Information about an impaired loan that has been restructured in a troubled debt restructuring involving a modification of terms need not be included in the disclosures required by paragraphs 310-10-50-15(a) and 310-10-50-15(c) (in this checklist) in years after the restructuring if both of the following conditions exist: a. a creditor shall disclose. in years after the restructuring because they are legally distinct from the original loan. As of the date of each balance sheet presented. 310-40-50-3. a Swiss entity.

Present the aggregate of those fair value and non-fair-value amounts in the same line item and parenthetically disclose the amount of fair value included in the aggregate amount b. Note: For debt securities that are held by a not-for-profit entity that reports a performance indicator. and • Risk and uncertainties disclosures related to valuation. All rights reserved.S. Presentation > Balance Sheet Classification 320-10-45-1 An entity shall report its investments in available-for-sale securities and trading securities separately from similar assets that are subsequently measured using another measurement attribute on the face of the statement of financial position. currency exchange rates. individual available-for-sale ©2010 KPMG LLP. 27 Subtopic 320-10: Investments—Debt and Equity Securities—Overall Note: Concerns that certain highly leveraged European governments could default on their debt obligations have resulted in significant price declines and price volatility in sovereign debt securities. a Swiss entity. a Delaware limited liability partnership and the U. and related issues. an entity shall do either of the following: a. . Present two separate line items to display the fair value and non-fair-value carrying amounts. 320-10-45-2 An entity that presents a classified statement of financial position shall report individual held-to-maturity securities. in some circumstances. • Counterparty credit exposure through derivative activities or currency swaps with financial institutions with significant European sovereign exposure. To accomplish that. Reporting entities should consider related accounting and disclosure issues including: • Fair value estimates related to European sovereign debt securities with significantly reduced liquidity. throughout this Subtopic the term earnings shall be replaced with performance indicator. • Loan loss provisioning considerations related to direct loans to European governments. Accordingly. imply that the quality of the loan portfolio had improved solely as a result of the troubled debt restructurings. financial institutions that lend to those governments or to corporate clients with significant operations in affected regions. the SEC staff believes that registrants should make clear to the users of the financial statements the impact of the multiple loan structures on the impaired loan disclosures.Annual (12/10) Page 76 of 290 concerned that disclosures of impaired loans after loans are restructured in troubled debt restructurings into multiple loan structures might.Accounting Disclosure Checklist . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). concentrations. • Other-than-temporary impairment issues related to European sovereign and financial institution debt securities. and the term other comprehensive income shall be replaced with outside the performance indicator. and securities issued by the financial institutions (primarily European banks) that lend to these governments.

>> Other-Than-Temporary Impairment 320-10-45-9A. > Presentation of Deferred Tax Assets Relating to Losses on Available-for-Sale Securities 320-10-45-3. as appropriate.S. However. This Subtopic does not specify the income statement classification of gains and losses for transfers involving trading securities. In periods in which an entity determines that a security’s decline in fair value below its amortized cost basis is other than temporary. gains and losses that have accumulated before the transfer shall be classified consistently with realized gains and losses for the category from which the security is being transferred. All rights reserved. .Annual (12/10) Page 77 of 290 securities. 320-10-45-8A. and individual trading securities as either current or noncurrent. a Delaware limited liability partnership and the U. not the category into which the security is being transferred. if not an other-thantemporary impairment. Subsequent increases in the fair value of available-for-sale securities shall be included in other comprehensive income pursuant to paragraphs 320-10-351(b) and 320-10-45-8. (See paragraphs 320-10-45-4 through 456 for additional guidance on changes in valuation allowances in subsequent periods. An entity that recognizes a deferred tax asset relating only to a net unrealized loss on available-for-sale securities may at the same time conclude that it is more likely than not that some or all of that deferred tax asset will not be realized. 109 (Second Edition) and related FASB Statement No. In that circumstance. if any. a Swiss entity. Example 2A (see paragraph 320-10-55-21A) illustrates the application of this guidance. > Income Statement Classification 320-10-45-7. The entity shall also report the offsetting entry to the valuation allowance in the component of other comprehensive income classified as unrealized gains and losses on certain investments in debt and equity securities if the entity concludes on the need for a valuation allowance in a later interim period of the same fiscal year in which the deferred tax asset is initially recognized. also shall be included in other comprehensive income. the entity shall report the offsetting entry to the valuation allowance in the component of other comprehensive income classified as unrealized gains and losses on certain investments in debt securities and equity securities because the valuation allowance is directly related to the unrealized holding loss on the available-for-sale securities. > Other Comprehensive Income 320-10-45-9. An entity shall separately present. amounts recognized therein related to held-to-maturity and available-for-sale debt ©2010 KPMG LLP.) Also see KPMG’s Accounting for Income Taxes – An Analysis of FASB Statement No. the entity shall present the total other-than-temporary impairment in the statement of earnings with an offset for the amount of the total other-than-temporary impairment that is recognized in other comprehensive income. 109 Question and Answers: A Supplement to KPMG’s Accounting for Income Taxes (Second Edition) – July 2009.Accounting Disclosure Checklist . under the guidance of Section 210-10-45. subsequent decreases in fair value. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). in the financial statement in which the components of accumulated other comprehensive income are reported. in accordance with paragraph 320-1035-34D.

Cash flows from purchases. This Subtopic does not require the presentation of individual amounts for the three categories of investments on the face of the statement of financial position. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). entities that report certain investments in debt securities as cash equivalents in accordance with the provisions of Topic 230 can continue that practice. Paragraph 230-10-45-8 permits reporting activity in cash equivalents as a net change.Accounting Disclosure Checklist . In determining whether disclosure for a particular security type is necessary and whether it is necessary to further separate a particular security type into greater detail. Aggregate fair value ©2010 KPMG LLP. Economic characteristic. a Swiss entity. 320-10-45-12. > Cash Flow Presentation 320-10-45-11. an entity shall consider all of the following: a.Annual (12/10) Page 78 of 290 securities for which a portion of an other-than-temporary impairment has been recognized in earnings. . Aggregate cost basis aa. sales. provided the information is presented in the notes. a Delaware limited liability partnership and the U. Disclosure > General 320-10-50-1B.S. provided that the notes reconcile the reporting classifications used in the statement of financial position. > Securities Classified as Available for Sale 320-10-50-2. Major security types shall be based on the nature and risks of the security. However. Thus. Cash flows from purchases. Vintage c. and maturities of trading securities shall be classified based on the nature and purpose for which the securities were acquired. For securities classified as available for sale. Credit quality e. Geographic concentration d. (Shared) activity or business sector b. securities that are considered cash equivalents are subject to the accounting and disclosure requirements of this Subtopic. and maturities of available-for-sale securities and held-to-maturity securities shall be classified as cash flows from investing activities and reported gross for each security classification in the statement of cash flows. all reporting entities shall disclose all of the following by major security type as of each date for which a statement of financial position is presented: a. 320-10-45-13. sales. such as disclosure of amortized cost and fair value by major security types.

Total other-than-temporary impairment recognized in accumulated other comprehensive income b. For all investments in an unrealized loss position. government debt securities may be shown separately rather than grouped with other equity securities in the disclosures by major security type required by paragraph 942320-50-2. . > Impairment of Securities 320-10-50-6. if allocated. a Swiss entity. Investments in mutual funds that invest only in U. All rights reserved. Total losses for securities with net losses in accumulated other comprehensive income d. Gross unrecognized holding gains c. Information about the contractual maturities of those securities as of the date of the most recent statement of financial position presented.Accounting Disclosure Checklist . including those that fall within the scope of Subtopic 325-40. Securities not due at a single maturity date. Amortized cost basis aa. Net carrying amount dd. the basis for allocation also shall be disclosed. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). may be disclosed separately rather than allocated over several maturity groupings. Securities not due at a single maturity date.S. Total gains for securities with net gains in accumulated other comprehensive income c. Information about the contractual maturities of those securities as of the date of the most recent statement of financial position presented. > Securities Classified as Held to Maturity 320-10-50-5. a Delaware limited liability partnership and the U. 320-10-50-3. 320-10-50-4. the basis for allocation also shall be disclosed. Gross gains and losses in accumulated other comprehensive income for any derivatives that hedged the forecasted acquisition of the held-to-maturity securities f.Annual (12/10) Page 79 of 290 aaa. all reporting entities shall disclose all of the following by major security type as of each date for which a statement of financial position is presented: a. such as mortgage-backed securities.). such as mortgage-backed securities. if allocated. Maturity information may be combined in appropriate groupings. may be disclosed separately rather than allocated over several maturity groupings. Gross unrecognized holding losses d.S. (Maturity information may be combined in appropriate groupings. Aggregate fair value b. for which other-than-temporary impairments ©2010 KPMG LLP. For securities classified as held to maturity. Total other-than-temporary impairment recognized in accumulated other comprehensive income e.

As of the date of the most recent statement of financial position. a Swiss entity. b. As of each date for which a statement of financial position is presented. All rights reserved. additional information (in narrative form) that provides sufficient information to allow financial statement users to understand the quantitative disclosures and the information that the entity considered (both positive and negative) in reaching the conclusion that the impairment or impairments are not other than temporary. . 2 b. including any of the following: 1. The disclosures required may be aggregated by investment categories. a Delaware limited liability partnership and the U. Current levels of subordination e. for example. quantitative information. Loan-to-collateral-value ratios c. The aggregate amount of unrealized losses (that is.) This disclosure could include all of the following: 1 2 3 4 5 The nature of the investment(s) The cause(s) of the impairment(s) The number of investment positions that are in an unrealized loss position The severity and duration of the impairment(s) Other evidence considered by the investor in reaching its conclusion that the investment is not other-than-temporarily impaired. aggregated by category of investment—each category of investment that the entity discloses in accordance with this Subtopic and cost-method investments—in tabular form: 1 The aggregate related fair value of investments with unrealized losses. Performance indicators of the underlying assets in the security. Default rates 2. including. Vintage ©2010 KPMG LLP. any of the following: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the amount by which cost exceeds fair value). Percentage of nonperforming assets.Accounting Disclosure Checklist . but individually significant unrealized losses generally shall not be aggregated. an entity shall disclose all of the following in its interim and annual financial statements: a. Delinquency rates 3. (The application of Step 2 in paragraph 320-10-35-30 shall provide insight into the entity’s rationale for concluding that unrealized losses are not other-than-temporary impairments. Third-party guarantees d.Annual (12/10) Page 80 of 290 have not been recognized in earnings (including investments for which a portion of an other-than-temporary impairment has been recognized in other comprehensive income).S.

Annual (12/10) Page 81 of 290 f. Third-party guarantees d. Industry analyst reports h. Examples of significant inputs include. Vintage f. 320-10-50-8. including all of the following: 1 2 3 Default rates Delinquency rates Percentage of nonperforming assets b. the reference point is the annual balance sheet date of the period during which the impairment was identified. all of the following: a. Performance indicators of the underlying assets in the security. but are not limited to.S. All rights reserved. The recognition of the total amount by which amortized cost basis exceeds fair value as an other-than-temporary impairment in earnings b. The continuous unrealized loss position ceases upon either of the following: a. The reference point for determining how long an investment has been in a continuous unrealized loss position is the balance sheet date of the reporting period in which the impairment is identified. Current levels of subordination e. Geographic concentration g. 320-10-50-8A. 320-10-50-7. Loan-to-collateral-value ratios c. The disclosures in (a)(1) through (a)(2) in the preceding paragraph shall be segregated by those investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or longer. Volatility of the security’s fair value Any other information that the investor considers relevant. an entity shall disclose by major security type. j. For entities that do not prepare interim financial information. . Geographic concentration g. the methodology and significant inputs used to measure the amount related to credit loss. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . For interim and annual periods in which an other-than-temporary impairment of a debt security is recognized and only the amount related to a credit loss was recognized in earnings. The investor becoming aware of a recovery of fair value up to (or beyond) the cost of the investment during the period. Sector credit ratings i. Credit ratings. a Swiss entity. ©2010 KPMG LLP.

The gross gains and gross losses included in earnings from transfers of securities from the available-for-sale category into the trading category d. The amount of the net unrealized holding gain or loss on available-for-sale securities for the period that has been included in accumulated other comprehensive income and the amount of gains and losses reclassified out of accumulated other comprehensive income into earnings for the period ©2010 KPMG LLP. The beginning balance of the amount related to credit losses on debt securities held by the entity at the beginning of the period for which a portion of an other-than-temporary impairment was recognized in other comprehensive income b. an entity shall disclose a tabular rollforward of the amount related to credit losses recognized in earnings in accordance with paragraph 320-10-35-34D. Additions for the amount related to the credit loss for which an other-thantemporary impairment was not previously recognized c. a Delaware limited liability partnership and the U. Reductions for securities sold during the period (realized) d. average cost. a Swiss entity.Annual (12/10) Page 82 of 290 320-10-50-8B. and Related Matters that Occurred During the Period 320-10-50-9. If the entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis. All rights reserved. which shall include at a minimum. . For each interim and annual reporting period presented. an entity shall disclose all of the following: a.S. specific identification. > Sales. or other method used) c. Reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis e.Accounting Disclosure Checklist . The basis on which the cost of a security sold or the amount reclassified out of accumulated other comprehensive income into earnings was determined (that is. The proceeds from sales of available-for-sale securities and the gross realized gains and gross realized losses that have been included in earnings as a result of those sales b. additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized f. The ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an other-thantemporary impairment was recognized in other comprehensive income. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). all of the following: a. Transfers. Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security (see paragraph 320-10-3535) g. For each period for which the results of operations are presented.

regardless of the treatment of remaining held-to-maturity securities. The net gain or loss in accumulated other comprehensive income for any derivative that hedged the forecasted acquisition of the held-to-maturity security c. an investor’s share of earnings or losses from its investment shall be shown in its income ©2010 KPMG LLP. . The portion of trading gains and losses for the period that relates to trading securities still held at the reporting date. The circumstances leading to the decision to sell or transfer the security. All sales or transfers of held-to-maturity securities are subject to the disclosure requirements of paragraph 320-10-50-10 (in this checklist). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist .Annual (12/10) Page 83 of 290 e. 320-10-50-10. All rights reserved.S. The portion of trading gains and losses for the period related to trading securities still held at the reporting date (required by paragraph 320-10-50-9(e) in this checklist) is calculated as follows. an investment in common stock shall be shown in the balance sheet of an investor as a single amount. a Delaware limited liability partnership and the U. 320-10-50-14. Net gains and losses recognized during the period on trading securities Less: Net gains and losses recognized during the period on trading securities sold during the period Unrealized gains and losses recognized during the reporting period on trading securities still held at the reporting date $ 105 (80) 25 $ 28 Subtopic 323-10: Investments—Equity Method and Joint Ventures—Overall. an entity shall disclose all of the following in the notes to the financial statements for each period for which the results of operations are presented: a. Under the equity method. 320-10-50-12.) 320-10-50-11. The related realized or unrealized gain or loss d. Likewise. (Such sales or transfers should be rare. Paragraph 320-10-25-14 sets forth the conditions under which sales of debt securities may be considered as maturities for purposes of the disclosure requirements under paragraph 320-10-50-10 (in this checklist). except for sales and transfers due to the changes in circumstances identified in paragraph 320-10-25-6(a) through (f). For any sales of or transfers from securities classified as held-tomaturity. The net carrying amount of the sold or transferred security b. a Swiss entity. Subtopic 323-740: Investments—Equity Method and Joint Ventures—Income Taxes Presentation > The Equity Method—Overall Guidance 323-10-45-1.

disclosures wholly or partly on a combined basis may be appropriate. All rights reserved. Disclosure > General 323-10-50-1. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 323-10-50-2. > Alternative Formats for Reporting Comprehensive Income 323-10-45-3. All of the following disclosures generally shall apply to the equity method of accounting for investments in common stock: a. Disclosure shall include the names of any significant investee entities in which the investor holds 20 percent or more of the voting stock.Accounting Disclosure Checklist . or in separate statements or schedules: 1 The name of each investee and percentage of ownership of common stock. 323-10-45-2. The accounting policies of the investor with respect to investments in common stock. Regardless of how an investee chooses to display other comprehensive income. except for the extraordinary items as specified in the following paragraph. Subtopic 946-323 (pending content) discusses the circumstances in which the specialized accounting in Topic 946 shall not be retained by a noninvestment company equity method investor of an investment company. a Swiss entity. an investor shall be permitted to combine its proportionate share of those amounts with its own other comprehensive income items and display the aggregate of those amounts in an income-statement-type format or in a statement of changes in equity. Paragraph 323-10-15-3 explains that references in this Subtopic to common stock refer to both common stock and in-substance common stock that give the investor the ability to exercise significant influence over operating and financial policies of an investee even though the investor holds 50% or less of the common stock or in-substance common stock (or both common stock and insubstance common stock). The significance of an investment to the investor’s financial position and results of operations shall be considered in evaluating the extent of disclosures of the financial position and results of operations of an investee. In those cases. > Equity Method Investments in an Investment Company 323-10-45-4. but the common stock is not accounted for on the equity 2 ©2010 KPMG LLP.Annual (12/10) Page 84 of 290 statement as a single amount. If the investor has more than one investment in common stock. a Delaware limited liability partnership and the U. The investor’s share of extraordinary items and its share of accounting changes reported in the financial statements of the investee shall be classified separately in accordance with Subtopic 225-20. in notes to financial statements. Subtopic 810-10 applies to the investments held by the investment company equity method investee for the purposes of the equity method investor’s financial statements. . Financial statements of an investor shall disclose all of the following parenthetically. 323-10-50-3.S.

and other contingent issuances of an investee may have a significant effect on an investor’s share of reported earnings or losses. the aggregate value of each identified investment based on the quoted market price usually shall be disclosed.Accounting Disclosure Checklist . SEC Guidance > Stock-Based Compensation Granted to Employees of an Equity Method Investee > > Classification of Resulting Income or Expense 1 SEC Observer Comment. a Swiss entity. and results of operations for subsidiaries not consolidated or 50 percentor-less-owned persons accounted for by the equity method if the criteria for a significant subsidiary are met. if any. liabilities. ©2010 KPMG LLP. either individually or in groups. it may be necessary for summarized information as to assets. > Summarized Financial Information of Subsidiaries Not Consolidated and 50 Percent or Less Owned Persons > > Annual Financial Statements 2 Regulation S-X Rule 4-08(g). together with the reasons why the equity method is considered appropriate. a Delaware limited liability partnership and the U. (Also see Regulation S-X 1-02(w)) In the year a consolidated subsidiary becomes an equity method investee. . d. Investors that are SEC registrants should classify any income or expense resulting from recognizing stock-based compensation granted to employees of an equity method investee in the same income statement caption as the equity in earnings (or losses) of the investee. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). This disclosure is not required for investments in common stock of subsidiaries. and the names of any significant investee corporations in which the investor holds less than 20 percent of the voting stock and the common stock is accounted for on the equity method. 3 The difference. b. c. For those investments in common stock for which a quoted market price is available. Present summarized information as to assets. All rights reserved. Accordingly.S. exercise of outstanding options and warrants. exercises. in the aggregate. together with the reasons why the equity method is not considered appropriate. the financial information should be presented for only the period of the fiscal year in which the investee has been accounted for by the equity method (SEC-Reporting Matters Discussed at the June 2005 AICPA SEC Regulations Committee Meeting). If investments in common stock of corporate joint ventures or other investments accounted for under the equity method are. between the amount at which an investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference. material in relation to the financial position or results of operations of an investor. or contingent issuances shall be disclosed in notes to financial statements of an investor. and results of operations of the investees to be presented in the notes or in separate statements. liabilities. material effects of possible conversions. Conversion of outstanding convertible securities. as appropriate.Annual (12/10) Page 85 of 290 method.

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Such disclosures should include a brief description of the factual circumstances and give the date on which the special tax status will terminate.2. The aggregate carrying amount of cost-method investments that the investor did not evaluate for impairment (see Section 325-20-35) c. the tax credit allocated. The aggregate carrying amount of all cost-method investments b. The fact that the fair value of a cost-method investment is not estimated if ©2010 KPMG LLP. . and effective yield methods. a Swiss entity. net of the amortization of the investment in the limited partnership. In some instances where 50% or less owned persons are accounted for by the equity method of accounting in the financial statements of the registrant.Accounting Disclosure Checklist . If an equity method investee has an effective tax rate which differs by more than 5% from the applicable statutory Federal income tax rate. if applicable. as of each date for which a statement of financial position is presented in its annual financial statements: a. and that such disclosures are also applicable to 50% or less owned persons. All rights reserved.Annual (12/10) Page 86 of 290 > Income Taxes of Equity Method Investee 3 SAB Topic 6. other investments such as preferred stock and loans to the investee. equity. Under the effective yield method. Example 1 (see paragraph 323-740-55-2) illustrates the application of accounting guidance to a limited partnership investment in a qualified affordable housing project using the cost. whenever the tax components are known and material to the investor’s (registrant’s) financial position or results of operations. It should also be noted that it is generally necessary to disclose the aggregate dollar and per-share effect of situations where temporary tax exemptions or “tax holidays” exist.I. an investor shall disclose all of the following additional information. in addition to common stock investment. is recognized in the income statement as a component of income taxes attributable to continuing operations. Any other tax benefits received shall be accounted for pursuant to the general requirements of Topic 740. appropriate disclosure should be made. For cost-method investments. 30 Subtopic 325-20: Investments—Other—Cost Method Investments Disclosure 325-20-50-1. 29 Qualified Affordable Housing Project Investments Subsection of Subtopic 323-740: Investments—Equity Method and Joint Ventures—Income Taxes Presentation 323-740-45-2. 323-740-45-3. the registrant may not know the rate at which the various components of income are taxed and it may not be practicable to provide disclosure concerning such components.S. > KPMG and Other Content 1 Recognition of equity-method losses when an investor’s total investment in an investee includes. a Delaware limited liability partnership and the U.

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). All rights reserved. To accomplish that separate reporting. an investor shall do either of the following: a. in accordance with paragraphs 825-10-5016 through 50-19. an investor shall do ©2010 KPMG LLP. . An investor shall report the investment income from its investments in life settlement contracts that are remeasured at fair value on the face of the income statement separately from the investment income from those accounted for under the investment method.S. 325-30-45-3. An investor shall report its investments in life settlement contracts that are remeasured at fair value on the face of the statement of financial position separately from those accounted for under the investment method. > Income Statement 325-30-45-2. Present the aggregate of those fair value method and investment method carrying amounts and parenthetically disclose the amount of those investments accounted for under the fair value method included in the aggregate amount. 2 3 31 Subtopic 325-30: Investments—Other—Investments in Insurance Contracts Disclosure > General 325-30-50-1. A policyholder shall disclose contractual restrictions on the ability to surrender a policy. To accomplish that separate reporting. a Delaware limited liability partnership and the U. 32 Life Settlement Contract Subsection of Subtopic 325-30: Investments—Other—Investments in Insurance Contracts Presentation > Statement of Financial Position 325-30-45-1.Accounting Disclosure Checklist . Display separate line items on the statement of financial position for the fair value method and investment method carrying amounts b. The investor shall classify the amount recognized upon the death of the insured on life settlement contracts in accordance with paragraph 325-30-35-9 in earnings (or other performance indicators for entities that do not report earnings). The investor is exempt from estimating interim fair values because it does not meet the definition of a publicly traded company. that it is not practicable to estimate the fair value of the investment That the investor is exempt from estimating fair value under Subtopic 825-10.Annual (12/10) Page 87 of 290 there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. and either of the following: 1 That the investor determined. a Swiss entity.

The face value (death benefits) of the life insurance policies underlying the contracts. a Swiss entity. 325-30-50-3.S. An investor applying the fair value method shall account for premiums paid and life insurance proceeds received on the same financial reporting line as the changes in fair value are reported. If the investor becomes aware of new or updated information that causes it to change its expectations on the timing of the realization of proceeds from the investments in life settlement contracts. 325-30-50-5. Display separate line items on the income statement for the investment income from the investments in life settlement contracts that are accounted for under the fair value method and investment method b. 325-30-45-4. An investor shall disclose all of the following for life settlement contracts accounted for under the investment method based on the remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter. An investor shall classify cash receipts and cash payments related to life settlement contracts in accordance with Topic 230. Disclosure 325-30-50-2. Present the aggregate of the investment income in life settlement contracts and parenthetically disclose the investment income from those investments accounted for under the fair value method that are included in the aggregate amount. All rights reserved. An investor shall disclose the life insurance premiums anticipated to be paid for each of the five succeeding fiscal years to keep the life settlement contracts in force as of the date of the most recent statement of financial position presented.Accounting Disclosure Checklist . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The carrying value of the life settlement contracts c. a Delaware limited liability partnership and the U. as well as in the aggregate: a.S. > Statement of Cash Flows 325-30-45-5. including other disclosure requirements on the use of fair value. The disclosure requirements in this Subsection do not eliminate disclosure requirements included in other U. The number of life settlement contracts b. generally accepted accounting principles (GAAP) pronouncements. the investor shall disclose the nature of the information and the related effect on the timing of the realization of proceeds ©2010 KPMG LLP. . based on the nature and purpose for which the life settlements were acquired.Annual (12/10) Page 88 of 290 either of the following: a. 325-30-50-6. An investor shall disclose its accounting policy for life settlement contracts including the classification of cash receipts and cash disbursements in statement of cash flows. > Investment Method 325-30-50-4.

whenever a significant change is made therein. a Delaware limited liability partnership and the U. An investor shall disclose all of the following for life settlement contracts accounted for under the fair value method based on remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter. The carrying value of the life settlement contracts c. as well as in the aggregate: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The face value (death benefits) of the life insurance policies underlying the contracts.Accounting Disclosure Checklist . This includes disclosing significant changes to the amounts disclosed in accordance with paragraph 325-30-50-4 (in this checklist). there shall be disclosure of the nature of the change and. 325-30-50-9. The unrealized gains or losses recognized during the period on investments that are still held at the date of the statement of financial position.Annual (12/10) Page 89 of 290 from the life settlement contracts. a Swiss entity. The investor shall disclose the reasons for changes in its expectation of the timing of the realization of the investments in life settlement contracts. The gains or losses recognized during the period on investments sold during the period b. upon income shall be made. an investor shall not be required to actively seek out new or updated information to update the assumptions used in determining the remaining life expectancy of the life settlement contracts. > Losses from Application of Lower of Cost or Market ©2010 KPMG LLP.S. if material. 325-30-50-10. and hence. if material. An investor shall disclose both of the following for each reporting period presented in the income statement: a. a full disclosure of its nature and of its effect. . The basis of stating inventories shall be consistently applied and shall be disclosed in the financial statements. 325-30-50-8. All rights reserved. including any mortality assumptions. An investor shall disclose the method(s) and significant assumptions used to estimate the fair value of investments in life settlement contracts. This includes disclosing significant changes to the amounts disclosed in accordance with paragraph 325-30-50-8 (in this checklist). > Fair Value Method 325-30-50-7. A change of such basis may have an important effect upon the interpretation of the financial statements both before and after that change. in the event of a change. 33 Subtopic 330-10: Inventory—Overall Disclosure > Basis for Stating Inventories 330-10-50-1. The number of life settlement contracts b. However. the effect on income.

All rights reserved.A.F. November 30. > Disclosure of Significant Estimates 330-10-50-6. > Stating Inventories at Sales Prices 330-10-50-4.) ©2010 KPMG LLP. > Losses on Firm Purchase Commitments 330-10-50-5. SEC Guidance > LIFO Inventories 1 2 FR 205.Accounting Disclosure Checklist . the use of such basis shall be fully disclosed in the financial statements. 1984): a. LIFO reserve or replacement cost of the inventory. > Goods Stated Above Cost 330-10-50-3. . The amounts of net losses on firm purchase commitments accrued under paragraph 330-10-35-17 shall be disclosed separately in the income statement. Where goods are stated above cost this fact shall be fully disclosed. Disclosure may be made either in a footnote or parenthetically on the face of the income statement. SEC registrants should avoid terminology such as “LIFO reserve” or “LIFO adjustment”. Disclose purchase obligations including agreements to purchase goods and services.2. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Amount of any inventory consigned to others should be reported separately as “inventory consigned to others” or other appropriate caption. (See Regulation S-X Rule 5-02. When substantial and unusual losses result from the application of the rule of lower of cost or market it will frequently be desirable to disclose the amount of the loss in the income statement as a charge separately identified from the consumed inventory costs described as cost of goods sold. Disclose income realized as a result of a last-in. first-out (LIFO) liquidation. SAB Topic 11. 3-03(a)(5).S.6(c) above for SEC registrants.Annual (12/10) Page 90 of 290 330-10-50-2. Where such inventories are stated at sales prices. > Consigned Inventory 3 SAB 104 Topic 13. a Swiss entity. Identification and Discussion of Certain Financial Accounting and Reporting Issues Concerning LIFO Inventories.02c. For non-SEC registrants. > Purchase Obligations 4 S-K. a Delaware limited liability partnership and the U. See Example 1 (paragraph 330-10-55-8) for an illustration of the disclosure of significant estimates applicable to inventories as required by Section 275-10-50. KPMG & Other Guidance > LIFO Inventories 1 For LIFO inventories (AICPA Issues Paper.

variable expenses that would have affected the income statement or the statement of financial position. variable expenses. a Swiss entity. the effects of income taxes also should be considered in such disclosures.02c.S. with an overarching principle that when such supplemental disclosures are provided. However. if any. Extent to which LIFO is used for entities not fully adopting LIFO. an entity should include changes in non-discretionary.g. All rights reserved.Annual (12/10) Page 91 of 290 b. Dollar amount of inventory valued on LIFO and. a Delaware limited liability partnership and the U. press releases. 6 SEC FR 205. the dollar amount of inventory valued on other acceptable methods. Assessing probability is enhanced when such nondiscretionary. should be included in the notes to the financial statements or in MD&A. the disclosures should not imply that the non-LIFO earnings are the “real earnings” of the entity. November 30. e. or the president’s letter in an annual report to shareholders.02c. separately. In addition to adjusting non-LIFO supplemental disclosures for the probable effects of non-discretionary. 1984) 2 Supplemental non-LIFO disclosures may include the effects on the income statement and the statement of financial position and include certain pro forma effects of using LIFO. 3 4 5 ©2010 KPMG LLP. SEC FR 205. In providing supplemental non-LIFO disclosures. such as a profit sharing arrangement. Supplemental non-LIFO disclosures. Present essential information about the supplemental income calculation to enable users of the financial statements to appreciate the quality of the information presented.Accounting Disclosure Checklist . In order to promote better understanding of the non-LIFO supplemental disclosures. variable expenses are based on a pre-determined formula. c. there are limitations on nature of the supplemental non-LIFO disclosures that may be provided. . In presenting supplemental non-LIFO disclosures some entities may want to include the effects of non-discretionary. > > Optional Supplemental Disclosures Regarding the Effect of Using LIFO (From AICPA Issues Paper. The SEC does not permit such disclosures to be made in financial highlights. variable expenses if it is probable that the nondiscretionary variable expenses would have been different based on the supplemental information. the basis for the determination of the non-discretionary. c.. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). State clearly that the use of LIFO results in a better matching of costs and revenues. Identification and Discussion of Certain Financial Accounting and Reporting Issues Concerning LIFO Inventories. Indicate the reason why the supplemental disclosures are provided. FIFO. variable expense should be disclosed. When such expenses are not based on a pre-determined formula but it is probable that the variable expense would have changed based on the supplemental information. b. the SEC requires entities to: a. The income tax effect in such disclosures should be computed in accordance with GAAP and should not be adjusted for any interest costs associated with losing the tax advantages associated with using LIFO.

36 Subtopic 340-30: Deferred Costs and Other Assets—Insurance Contracts that Do Not Transfer Insurance Risks Presentation > Deposit Asset and Liability 340-30-45-1. Registrants will be expected to disclose their accounting policy for pre-production design and development costs (paragraph 34010-25-1) as well as the aggregate amount of: a. if any. Assets recognized for molds. a Delaware limited liability partnership and the U. paragraph 340-20-55-1. for a sample footnote disclosure): a. The total amount of advertising reported as assets in each balance sheet presented. Disclosure 340-20-50-1. The accounting policy selected from the two alternatives in paragraph 720-3525-1 for reporting advertising. and other tools that the supplier does not own. A description of the direct-response advertising reported as assets (if any). dies. dies. The notes to the financial statements shall disclose all of the following (see Example 1. and other tools that the supplier owns c.Annual (12/10) Page 92 of 290 34 Topic 340-10: Deferred Costs and Other Assets—Overall — SEC Guidance > Pre-Production Costs Related to Long-Term Supply Agreements 1 SEC Observer Comment: Accounting for Pre-Production Costs Related to LongTerm Supply Arrangements. c. and the amortization period. 35 Subtopic 340-20: Deferred Costs and Other Assets—Capitalized Advertising Costs Presentation > Presentation of Qualifying Direct-Response Advertising Assets 340-20-45-1. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Deposit assets and liabilities shall be reported on a gross basis. Assets recognized pursuant to agreements that provide for contractual reimbursement of pre-production design and development costs b. unless the ©2010 KPMG LLP. a Swiss entity. the accounting policy for it. d. then they shall be reported as assets net of accumulated amortization. The total amount charged to advertising expense for each income statement presented.Accounting Disclosure Checklist . representing a writedown to net realizable value. indicating whether such costs are expensed as incurred or the first time the advertising takes place b. If the costs of direct-response advertising meet the recognition criteria as capitalized assets of paragraph 340-20-25-4. Assets recognized for molds. with separate disclosure of amounts. . All rights reserved.S.

Goodwill and Other (Topic 350). Changes in the recorded amount of the deposit. In determining whether it is more likely than not that a goodwill impairment exists. an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists.S. . Entities shall disclose a description of the contracts accounted for as deposits and the separate amounts of total deposit assets and total deposit liabilities reported in the statement of financial position.Accounting Disclosure Checklist . When to Perform Step 2 of the Goodwill Impairment Test for Reporting Unites with Zero or Negative Carrying Amounts. a Swiss entity. The qualitative factors are consistent with the existing guidance and examples in paragraph 350-20-35-30. The accounting by the insured and insurer are symmetrical. Changes in the carrying amount of the deposit shall be reported as interest income or interest expense. Disclosure > Deposit Asset or Liability 340-30-50-1. arising from an insurance or reinsurance contract that transfers only significant underwriting risk shall be recorded in an insured’s income statement as an offset against the loss recorded by the insured that will be reimbursed under the insurance or reinsurance contract and in an insurer’s income statement as an incurred loss. except as noted in paragraphs 340-30-35-6 through 35-7. 340-30-45-4. an entity should consider whether there are any adverse qualitative factors. other than the unexpired portion of the coverage provided. For those reporting units.Annual (12/10) Page 93 of 290 right of offset exists as defined in Subtopic 210-20. > Insurance and Reinsurance Contracts that Transfer Only Significant Timing Risk and Insurance and Reinsurance Contracts that Transfer Neither Timing nor Significant Underwriting Risk 340-30-45-2. 340-30-45-5. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The amendments in this EITF modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. ©2010 KPMG LLP. Insurance entities shall record the reduction in the deposit related to the unexpired portion of the coverage provided as an adjustment to incurred losses. a Delaware limited liability partnership and the U. > Insurance and Reinsurance Contracts that Transfer Only Significant Underwriting Risk 340-30-45-3. which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. the reduction in the deposit related to the unexpired portion of the coverage provided shall be recorded as an expense. All rights reserved. If the insured is an entity other than an insurance entity. 37 Topic 350-20: Intangibles—Goodwill and Other—Goodwill Note: The FASB recently ratified EITF 10-A.

an entity with reporting units that have carrying amounts that are zero or negative is required to assess whether it is more likely than not that the reporting units’ goodwill is impaired.S. 350-20-45-3. Presentation 350-20-45-1. and interim periods within those years. For nonpublic entities. Additional goodwill recognized during the period. Adjustments resulting from the subsequent recognition of deferred tax assets during the period in accordance with paragraphs 805-740-25-2 through 25-4 and 805-740-45-2 d. 350-20-45-2. Disclosure > Information for Each Period for Which a Statement of Financial Position Is Presented 350-20-50-1. beginning after December 15. a Swiss entity. Goodwill included in a disposal group classified as held for sale in accordance with paragraph 360-10-45-9and goodwill derecognized during the period without having previously been reported in a disposal group classified as held for sale e.Annual (12/10) Page 94 of 290 EITF 10-A is effective for public entities for fiscal years. Impairment losses recognized during the period in accordance with this Subtopic ©2010 KPMG LLP. The changes in the carrying amount of goodwill during the period shall be disclosed. Upon adoption of the EITF. Any resulting goodwill impairment should be recorded as a cumulative-effect adjustment to beginning retained earnings in the period of adoption. the EITF is effective for fiscal years. The aggregate amount of goodwill impairment losses shall be presented as a separate line item in the income statement before the subtotal income from continuing operations (or similar caption) unless a goodwill impairment loss is associated with a discontinued operation. All rights reserved. Early adoption is not permitted. 2011. on acquisition. showing separately (see Example 3 paragraph 350-20-55-24): a. 2010. The aggregate amount of goodwill shall be presented as a separate line item in the statement of financial position. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). meets the criteria to be classified as held for sale in accordance with paragraph 360-10-45-9 c. and interim periods within those years. a Delaware limited liability partnership and the U. the entity should perform Step 2 of the goodwill impairment test for those reporting unit(s). except goodwill included in a disposal group that. The gross amount and accumulated impairment losses at the beginning of the period b.Accounting Disclosure Checklist . beginning after December 15. Nonpublic entities may early adopt the EITF using the effective date for public entities. . A goodwill impairment loss associated with a discontinued operation shall be included (on a net-of-tax basis) within the results of discontinued operations. If the entity determines that it is more likely than not that the goodwill of one or more of its reporting units is impaired.

Disclosures in MD&A about potential for future impairment charges (early warning disclosures). The gross amount and accumulated impairment losses at the end of the period (accumulated goodwill impairment losses from the adoption date of Topic 350 (Statement 142)). Rule 10-01(b)(6).Annual (12/10) Page 95 of 290 f. or a combination thereof) c. and critical accounting ©2010 KPMG LLP. in subsequent periods. b. Goodwill Impairment Loss 350-20-50-2. If any portion of goodwill has not yet been allocated to a reporting unit at the date the financial statements are issued. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a.Accounting Disclosure Checklist . the SEC staff discussed appropriate impairment matters for public companies. The amount of the impairment loss and the method of determining the fair value of the associated reporting unit (whether based on quoted market prices. 2 . SEC staff speech: At the 2008 AICPA National Conference on Current SEC and PCAOB Developments. Impairment charges recognized – the SEC staff discussed the significance of disclosures of the facts and circumstances that led to the impairment. that fact and the reasons therefore and. The SEC staff also addressed the reconciliation of market capitalization and the fair value of reporting units and the need for more robust disclosures related to possible and actual goodwill impairment under current market conditions. prices of comparable businesses. the registrant is required to disclose the date of and reason for the change. impact of facts and circumstances leading to impairment loss on expectations of future earnings and cash flows.S. For each goodwill impairment loss recognized. all of the following information shall be disclosed in the notes to the financial statements that include the period in which the impairment loss is recognized: a. Net exchange differences arising during the period in accordance with Topic 830 g. If any change to the date of the annual goodwill impairment test is made. a present value or other valuation technique. the nature and amount of any significant adjustments made to the initial estimate of the impairment loss SEC Guidance 1 S-X. a Swiss entity. If a recognized impairment loss is an estimate that has not yet been finalized (see paragraphs 350-20-35-18 through 19). i. Entities that report segment information in accordance with Topic 280 shall provide the above information about goodwill in total and for each reportable segment and shall disclose any significant changes in the allocation of goodwill by reportable segment. All rights reserved. a Delaware limited liability partnership and the U. Any other changes in the carrying amounts during the period h. A description of the facts and circumstances leading to the impairment b. that unallocated amount and the reasons for not allocating that amount shall be disclosed.

Accounting Disclosure Checklist . A discussion of the potential events and circumstances that could have a negative effect on the assumptions. the SEC staff expects that this assertion would be disclosed.S. all intangible assets shall be aggregated and presented as a separate line item in the statement of financial position. 350-30-45-3. the SEC staff expects registrants to provide the following disclosures: a. 3 SEC staff speech: At the 2009 AICPA Conference. if the fair value of a reporting unit is not “substantially in excess” of the carrying value. The percentage by which the fair value of the reporting unit exceeded its carrying value b. and an impairment of goodwill allocated to that reporting unit would be material. the SEC staff would expect that registrant to highlight the risk of impairment in its financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). all of the following ©2010 KPMG LLP. If the fair value of a reporting unit substantially exceeds its carrying value. The SEC staff discussed their expectation with respect to the types of disclosures they expect in MD&A. Disclosure > Disclosures in the Period of Acquisition 350-30-50-1. . the SEC staff indicated that they have increased their focus on disclosures associated with goodwill impairment testing. if a registrant has a reporting unit that is at risk of failing step one of the goodwill impairment test. The amortization expense and impairment losses for intangible assets shall be presented in income statement line items within continuing operations as deemed appropriate for each entity. For intangible assets acquired either individually or as part of a group of assets (in either an asset acquisition or business combination). A discussion of the assumptions used and any uncertainty inherent in those assumptions d. 350-30-45-2. The amount of goodwill allocated to the reporting unit c. However. a Swiss entity. Paragraphs 350-30-35-9 through 35-12 and 350-30-35-15 through 35-17 require that an intangible asset be tested for impairment when it is determined that the asset shall no longer be amortized or shall begin to be amortized due to a reassessment of its remaining useful life.Annual (12/10) Page 96 of 290 estimates. a Delaware limited liability partnership and the U. For example. 38 Subtopic 350-30: Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill Presentation 350-30-45-1. They noted a fairly wide diversity in practice as to the nature and extent of the disclosures registrants provide. Further. that requirement does not preclude presentation of individual intangible assets or classes of intangible assets as separate line items. At a minimum. An impairment loss resulting from that impairment test shall not be recognized as a change in accounting principle. All rights reserved.

a Swiss entity. All rights reserved. The following information shall be disclosed in the financial statements or the notes to financial statements for each period for which a statement of financial position is presented: a. For intangible assets that have been renewed or extended in the period for which a statement of financial position is presented. This information also shall be disclosed separately for each material business combination or in the aggregate for individually immaterial business combinations that are material collectively if the aggregate fair values of intangible assets acquired. For intangible assets not subject to amortization. c. both of the following: ©2010 KPMG LLP. For intangible assets subject to amortization. in total and by major intangible asset class. d. in total and by major intangible asset class The aggregate amortization expense for the period The estimated aggregate amortization expense for each of the five succeeding fiscal years. the weighted-average period before the next renewal or extension (both explicit and implicit). The amount of research and development assets acquired in a transaction other than a business combination and written off in the period and the line item in the income statement in which the amounts written off are aggregated.Annual (12/10) Page 97 of 290 information shall be disclosed in the notes to financial statements in the period of acquisition: a. For intangible assets with renewal or extension terms. the total carrying amount and the carrying amount for each major intangible asset class c. . The entity’s accounting policy on the treatment of costs incurred to renew or extend the term of a recognized intangible asset d. in total and by major intangible asset class The weighted-average amortization period. other than goodwill. all of the following: 1 2 3 The gross carrying amount and accumulated amortization.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). For intangible assets subject to amortization. For intangible assets not subject to amortization. by major intangible asset class. b. are significant. the total amount assigned and the amount assigned to any major intangible asset class. > Disclosures for Each Period for Which a Statement of Financial Position Is Presented 350-30-50-2.Accounting Disclosure Checklist . all of the following: 1 2 3 The total amount assigned and the amount assigned to any major intangible asset class The amount of any significant residual value. b. a Delaware limited liability partnership and the U.

©2010 KPMG LLP. Plant. 2 Example 13 (see paragraph 350-30-55-39) illustrates these disclosure requirements. the segment in which the impaired intangible asset is reported under Topic 280.S. the total amount of costs incurred in the period to renew or extend the term of a recognized intangible asset. For a recognized intangible asset. at the balance sheet date. c. Depreciation expense for the period. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). > Disclosures Relating to Impairment Losses 350-30-50-3. > Certain Significant Estimates 350-30-50-5. a Swiss entity. see paragraph 275-10-50-15A (in this checklist). For each impairment loss recognized related to an intangible asset. Balances of major classes of depreciable assets. b. All rights reserved. b. by major intangible asset class. an entity shall disclose information that enables users of financial statements to assess the extent to which the expected future cash flows associated with the asset are affected by the entity’s intent or ability (or both intent and ability) to renew or extend the arrangement. 39 Subtopic 360-10: Property. The amount of the impairment loss and the method for determining fair value.Annual (12/10) Page 98 of 290 1 For entities that capitalize renewal or extension costs. all of the following disclosures shall be made in the financial statements or in notes thereto: a. If applicable. at the balance sheet date. . and Equipment—Overall Disclosure 360-10-50-1. For guidance on determining whether disclosures about an estimate of the useful life of an intangible asset are required under paragraph 275-10-50-8 (in this checklist). by major intangible asset class The weighted-average period before the next renewal or extension (both explicit and implicit). c. all of the following information shall be disclosed in the notes to financial statements that include the period in which the impairment loss is recognized: a. > Renewal or Extension of an Intangible Asset’s Legal or Contractual Life 350-30-50-4. by nature or function. A description of the impaired intangible asset and the facts and circumstances leading to the impairment. Accumulated depreciation.Accounting Disclosure Checklist . The caption in the income statement or the statement of activities in which the impairment loss is aggregated. either by major classes of depreciable assets or in total. d. Because of the significant effects on financial position and results of operations of the depreciation method or methods used. a Delaware limited liability partnership and the U.

a Swiss entity. All of the following information shall be disclosed in the notes to financial statements that include the period in which an impairment loss is recognized: a. Any required adjustment to the carrying amount of a long-lived asset that is reclassified as held and used shall be included in income from continuing operations in the period of the subsequent decision not to sell. it shall include the amounts of those gains or losses. 40 Impairment or Disposal of Long-Lived Assets Subsection of Subtopic 360-10: Property. > > Presentation of Disposal Gains or Losses in Continuing Operations 360-10-45-5. and Equipment—Overall Presentation > Impairment of Long-Lived Assets Classified as Held and Used > > Presentation of Impairment Loss for Long-Lived Assets to Be Held and Used 360-10-45-4. if any. A general description of the method or methods used in computing depreciation with respect to major classes of depreciable assets. it shall include the amount of that loss. If circumstances arise that previously were considered unlikely and. Plant. the amount of the impairment loss and the caption in the income statement or the statement of activities that includes that loss ©2010 KPMG LLP. 360-10-45-7. the results of operations of the component previously reported in discontinued operations in accordance with paragraph 205-20-45-3 (in this checklist) shall be reclassified and included in income from continuing operations for all periods presented. . All rights reserved.Accounting Disclosure Checklist . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Annual (12/10) Page 99 of 290 d. An impairment loss recognized for a long-lived asset (asset group) to be held and used shall be included in income from continuing operations before income taxes in the income statement of a business entity. A gain or loss recognized on the sale of a long-lived asset (disposal group) that is not a component of an entity shall be included in income from continuing operations before income taxes in the income statement of a business entity. If a subtotal such as income from operations is presented. If not separately presented on the face of the statement.S. Disclosure 360-10-50-2. If a component of an entity is reclassified as held and used. A description of the impaired long-lived asset (asset group) and the facts and circumstances leading to the impairment b. a Delaware limited liability partnership and the U. an entity decides not to sell a long-lived asset (disposal group) previously classified as held for sale. That adjustment shall be reported in the same income statement caption used to report a loss. as a result. the asset (disposal group) shall be reclassified as held and used. > > Changes to a Plan of Sale 360-10-45-6. If a subtotal such as income from operations is presented. recognized in accordance with paragraph 360-10-45-5 (in this checklist).

Accounting Disclosure Checklist . or another valuation technique) d. The method or methods for determining fair value (whether based on a quoted market price. the segment in which the impaired long-lived asset (asset group) is reported under Topic 280. . 205-20-45-3. The results of operations of a component of an entity that either has been disposed of or is classified as held for sale under the requirements of paragraph 360-10-45-9. in discontinued operations. The results of discontinued operations. All rights reserved. b. including any gain or loss recognized in accordance with paragraphs 360-10-35-40 and 360-10-40-5. a Swiss entity. The results of operations of a component classified as held for sale shall be reported in discontinued operations in the period(s) in which they occur. Those assets and liabilities shall not be offset and ©2010 KPMG LLP. Interest on debt that is to be assumed by the buyer and interest on debt that is required to be repaid as a result of a disposal transaction shall be allocated to discontinued operations.Annual (12/10) Page 100 of 290 c. shall be reported in discontinued operations in accordance with paragraph 205-20-45-3 (in this checklist) if both of the following conditions are met: a. 205-20-45-4. The entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. the income statement of a business entity or statement of activities of a not-for-profit entity (NFP) for current and prior periods shall report the results of operations of the component. The assets and liabilities of a disposal group classified as held for sale shall be presented separately in the asset and liability sections. The operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction. A gain or loss recognized on the disposal shall be disclosed either on the face of the income statement or in the notes to financial statements (see paragraph 205-20-50-1(b) in this checklist). of the statement of financial position. respectively. In a period in which a component of an entity either has been disposed of or is classified as held for sale. a Delaware limited liability partnership and the U. prices for similar assets. 41 Subtopic 205-20: Presentation of Financial Statements—Discontinued Operations Presentation 205-20-45-1.S. less applicable income taxes (benefit). shall be reported as a separate component of income before extraordinary items (if applicable). Adjustments to amounts previously reported in discontinued operations that are directly related to the disposal of a component of an entity in a prior period shall be classified separately in the current period in discontinued operations. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). > > Disposal Group Classified as Held for Sale 205-20-45-10. > > Allocation of Interest to Discontinued Operations 205-20-45-6. If applicable.

A description of the facts and circumstances leading to the expected disposal. if not separately presented on the face of the statement. b. d. . The following shall be disclosed in the notes to financial statements that cover the period in which a long-lived asset (disposal group) either has been sold or is classified as held for sale under the requirements of paragraph 360-10-45-9: a. a Delaware limited liability partnership and the U. If the held for sale criteria are met after the balance sheet date but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25). > Continuing Cash Flows ©2010 KPMG LLP. If the asset (asset group) is tested for recoverability (on a held-and-used basis) as of the balance sheet date. c.Annual (12/10) Page 101 of 290 presented as a single amount. The major classes of assets and liabilities classified as held for sale shall be separately disclosed either on the face of the statement of financial position or in the notes to financial statements (see paragraph 205-20-501(a) in this checklist). If applicable. In addition. The gain or loss recognized in accordance with paragraphs 360-10-35-40 and 360-10-40-5 and if not separately presented on the face of the income statement. > > Change of Classification After Balance Sheet Date but Before Issuance of Financial Statements 360-10-45-13. a description of the facts and circumstances leading to the decision to change the plan to sell the longlived asset (disposal group) and its effect on the results of operations for the period and any prior periods presented shall be disclosed in the notes to financial statements that include the period of that decision. Disclosure 205-20-50-1. the caption in the income statement or the statement of activities that includes that gain or loss. > Change to a Plan of Sale 205-20-50-3. If applicable. the carrying amount(s) of the major classes of assets and liabilities included as part of a disposal group. and. the expected manner and timing of that disposal. including the assessment of the likelihood of the future sale of the asset. a Swiss entity. All rights reserved. a long-lived asset shall continue to be classified as held and used in those financial statements when issued or when available to be issued. That assessment made as of the balance sheet date shall not be revised for a decision to sell the asset after the balance sheet date. amounts of revenue and pretax profit or loss reported in discontinued operations.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). If an entity either decides not to sell a long-lived asset (disposal group) previously classified as held for sale or removes an individual asset or liability from a disposal group previously classified as held for sale. information required by paragraph 205-20-50-1(a) shall be disclosed in the notes to financial statements.Accounting Disclosure Checklist . the estimates of future cash flows used in that test shall consider the likelihood of possible outcomes that existed at the balance sheet date. the segment in which the long-lived asset (disposal group) is reported under Topic 280.

Accounting Disclosure Checklist . > Adjustments to Previously Reported Amounts 205-20-50-5. . 2 > Allocation of Interest to Discontinuation of Operations 3 SEC Observer Comment. The nature of the activities that give rise to continuing cash flows. That information shall be disclosed in the period in which operations are initially classified as discontinued. Material contingent liabilities. Changes in the carrying value of assets received as consideration in the disposal or of residual interests in the business disposed should be classified within continuing operations. see ©2010 KPMG LLP. > Continuing Involvement by Ongoing Entity 205-20-50-6. The following information shall be disclosed in the notes to financial statements for each discontinued operation that generates continuing cash flows: a. The SEC staff will expect registrants electing to allocate interest in accordance with paragraph 205-20-45-6 to clearly disclose the accounting policy (including the method of allocation) and the amount allocated to and included in discontinued operations for all periods presented. if any. a Swiss entity. SAB Topic 5-Z. SEC Guidance 1 SAB Topic 5-Z. such as product or environmental liabilities or litigation that remain with an entity notwithstanding disposal of the underlying business. The period of time continuing cash flows are expected to be generated. In addition. c. should be disclosed along with the disclosure requirements of Topic 450. a Delaware limited liability partnership and the U. 42 Subtopic 405-20: Liabilities—Extinguishments of Liabilities Disclosure 405-20-50-1. The types of continuing involvement. The nature and amount of adjustments to amounts previously reported in discontinued operations that are directly related to the disposal of a component of an entity in a prior period shall be disclosed. All rights reserved. intra-entity amounts before the disposal transaction shall be disclosed for all periods presented.S. See paragraph 470-50-50-1 for a disclosure requirement for debt considered to be extinguished by in-substance defeasance. b. For each discontinued operation in which the ongoing entity will engage in a continuation of activities with the disposed component after its disposal and for which the amounts presented in continuing operations after the disposal transaction include a continuation of revenues and expenses that were intra-entity transactions (eliminated in consolidated financial statements) before the disposal transaction.Annual (12/10) Page 102 of 290 205-20-50-4. The principal factors used to conclude that the expected continuing cash flows are not direct cash flows of the disposed component. that the entity will have after the disposal transaction shall be disclosed. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

An entity may use any descriptor for accretion expense so long as it conveys the underlying nature of the expense. Sections 275-10-50 and 450-20-55 address disclosures related to loss contingencies. if amounts have been discounted. 44 Subtopic 410-20: Asset Retirement and Environmental Obligations—Asset Retirement Obligations Presentation 410-20-45-1. A reconciliation of the beginning and ending aggregate carrying amount of asset retirement obligations showing separately the changes attributable to the following components. Disclosure 410-20-50-1. That guidance is applicable to assessments covered by this Subtopic. the entity shall disclose in the financial statements the amounts of the liability.Annual (12/10) Page 103 of 290 paragraph 860-30-50-2 for disclosure requirements for assets that are set aside solely for the purpose of satisfying scheduled payments of a specific obligation. 43 Subtopic 405-30: Liabilities—Insurance-Related Assessments Disclosure 405-30-50-1. and the period over which the recorded premium tax offsets or policy surcharges are expected to be realized.Accounting Disclosure Checklist . If amounts have not been discounted. All rights reserved. A general description of the asset retirement obligations and the associated long-lived assets b. a Delaware limited liability partnership and the U. Additionally. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Accretion expense shall be classified as an operating item in the statement of income. a Swiss entity. The fair value of assets that are legally restricted for purposes of settling asset retirement obligations c. An entity shall disclose all of the following information about its asset retirement obligations: a. the entity shall disclose in the financial statements the undiscounted amounts of the liability and any related asset for premium tax offsets or policy surcharges as well as the discount rate used.S. any related asset for premium tax offsets or policy surcharges. the periods over which the assessments are expected to be paid. whenever there is a significant change in any of these components during the reporting period: 1 2 3 Liabilities incurred in the current period Liabilities settled in the current period Accretion expense ©2010 KPMG LLP. .

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). If the fair value of an asset retirement obligation cannot be reasonably estimated. disclosure of accrual benchmarks for remediation obligations is useful to further users’ understanding of the entity’s financial statements. The incurrence of environmental remediation obligations is not an event that is unusual in nature. the related costs and recoveries do not meet the criteria for classification as extraordinary. It would be rare. . As such. A debtor that has a right of setoff that meets all of the conditions in paragraph 210-20-45-1 (in this checklist) may offset the related asset and liability and report the net amount. Example 1 (paragraph 410-30-55-7) illustrates the application of those disclosure requirements. during or upon completion of the feasibility study). Also. that fact and the reasons therefor shall be disclosed. (See Example 2 paragraph 410-30-55-14.Accounting Disclosure Checklist . to disclose the event. if ever.) 410-30-50-9. Uncertainties associated with environmental remediation loss contingencies are pervasive. entities are encouraged. Disclosure > Disclosures that Are Required 410-30-50-5. Accordingly. 410-30-50-6. 410-20-50-2. that the facts and circumstances surrounding environmental remediation liabilities and related receivables and potential recoveries would meet all of these conditions. entities are encouraged to disclose their policy concerning the timing of recognition of recoveries. 45 Subtopic 410-30 : Asset Retirement and Environmental Obligations—Environmental Obligations Presentation 410-30-45-2. All rights reserved. and they often result in wide ranges of reasonably ©2010 KPMG LLP. a Swiss entity. or set of circumstances that generally triggers recognition of loss contingencies that arise out of the entity’s environmental remediation-related obligations (for example.Annual (12/10) Page 104 of 290 4 Revisions in estimated cash flows. financial statements shall disclose if any portion of the accrued obligation is discounted. The disclosure requirements of Subtopic 275-10 also apply to environmental remediation liabilities. 410-30-45-3.S. and because the accounting for many environmental loss contingencies often involves subjective judgments. the undiscounted amount of the obligation. > Disclosures that Are Encouraged but Not Required 410-30-50-8. and the discount rate used in the present-value determinations. Subtopic 450-20 provides the primary guidance applicable to disclosures of environmental remediation loss contingencies. Because environmental remediation costs have become increasingly significant. 410-30-50-7. situation. but not required. a Delaware limited liability partnership and the U. With respect to recorded accruals for environmental remediation loss contingencies and assets for third-party recoveries related to environmental remediation obligations.

. additional specific disclosures with respect to environmental remediation loss contingencies that would be useful to further users’ understanding of the entity’s financial statements. The estimated time frame of disbursements for recorded amounts if expenditures are expected to continue over the long term b.S. Accordingly. All rights reserved. Entities also are encouraged (see paragraph 410-30-55-15 through 5516). but not required. If information about the reasonably possible loss or the recognized and additional reasonably possible loss for an environmental remediation obligation related to an individual site is relevant to an understanding of the financial position. and an estimate of the possible loss or the fact that an estimate cannot be made and the reasons why it cannot be made Whether other potentially responsible parties are involved and the entity’s estimated share of the obligation The status of regulatory proceedings The estimated time frame for resolution of the contingency. but does not require. this Subtopic encourages. The estimated time frame for realization of recognized probable recoveries. to disclose the estimated time frame for resolution of the uncertainty as to the amount of the loss (see paragraph 410-30-55-17). The income statement caption in which environmental remediation costs and credits are included. or results of operations of the entity. the following with respect to the site: 1 2 The total amount accrued for the site The nature of any reasonably possible loss contingency or additional loss. Entities are encouraged but not required to disclose the amount of environmental remediation costs recognized in the income statement in the following detail: a. resolution of the uncertainties and the cash-flow effects of the loss contingencies often occur over a span of many years. cash flows. If an estimate of the probable or reasonably possible loss or range of loss cannot be made. See paragraphs 410-30-55-14 through 55-15. a Delaware limited liability partnership and the U. Entities also are encouraged. b. 3 4 5 410-30-50-11. 410-30-50-12. but not required.Annual (12/10) Page 105 of 290 possible losses with respect to such contingencies. 410-30-50-10. to disclose the following: a. if realization is not expected in the near term c. c. Further. The amount of any recovery from third parties that is credited to environmental remediation costs in each period. ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist . The amount recognized for environmental remediation loss contingencies in each period. a Swiss entity. the reasons why it cannot be made d.

Expected aggregate undiscounted amount of the liability and related recovery. Such disclosures often acknowledge the uncertainty of the effect of possible future changes to environmental laws and their application. or other exit costs that may occur on the sale. 2 SAB Topic 5. For environmental liabilities that have been discounted: a. a Swiss entity. Disclose material liabilities for site restoration. However. or abandonment of a property. Loss Contingencies. d. Types of cost involved. a Delaware limited liability partnership and the U. considering the entity’s total exposures for all its environmental sites. 410-30-50-14. Disclosures should include: a. Such contingency conclusions may state. that “management believes that the outcome of these uncertainties should not have [or “may have”] a material adverse effect on the financial condition. b.Annual (12/10) Page 106 of 290 > Disclosure Related to Loss Contingencies 410-30-50-13. then in accordance with paragraph 450-20-50-6 (in this checklist) no disclosure is required. Entities may wish to provide a description of the general applicability and impact of environmental laws and regulations upon their business and how the existence of such laws and regulations may give rise to loss contingencies for future environmental remediation. Expected payments for each of the five succeeding years and the aggregate amount thereafter. and monitoring commitments. .Y. SEC Guidance > Disclosures Related to Discounting an Environmental Liability. if an entity is required by existing laws and regulations to report the release of hazardous substances and to begin a remediation study or if assertion of a claim is deemed probable. Reconciliation of the expected aggregate undiscounted amount to amounts recognized in the balance sheets. or operating results of the entity. disposal. All rights reserved. post-closure. Whether notification by regulatory authorities in relation to particular environmental laws and regulations constitutes the assertion of a claim is a matter of legal determination. the disclosure may indicate that the adverse effect could be material to a particular financial statement or to results and cash flows of a quarterly or annual reporting period.Accounting Disclosure Checklist . and they are frequently made on an aggregated basis.Y. for example. regardless of a lack of involvement by a regulatory agency. Financial statements may include a contingency conclusion that addresses the estimated total unrecognized exposure to environmental remediation and other loss contingencies. and Remediation Costs 1 SAB Topic 5. the matter would represent a loss contingency subject to the disclosure provisions of paragraphs 450-20-50-3 through 50-4. ©2010 KPMG LLP.” Alternatively. c. 410-30-50-17.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Discount rate used. If an entity concludes that it has no current legal obligation to remediate a situation of probable or possible environmental impact. cash flows.

contract termination costs. e. Balance sheet classification of accrued amounts. as defined in paragraphs 225-20-45-1 through 45-8. However. both of the following shall be disclosed: ©2010 KPMG LLP. If a subtotal such as income from operations is presented.Y. Total cost accrued to date. The cumulative effect of a change resulting from a revision to either the timing or the amount of estimated cash flows shall be reported in the same line item(s) in the income statement (statement of activities) used when the related costs were recognized initially in the period of change. Total anticipated cost. For assets held for sale or development. Range or amount of reasonably possible additional losses. because neither an exit activity nor a disposal activity is both unusual and infrequent (see paragraph 225-20-45-16 in this checklist). and other associated costs). All of the following information shall be disclosed in notes to financial statements that include the period in which an exit or disposal activity is initiated and any subsequent period until the activity is completed: a. 4 46 Subtopic 420-10: Exit or Disposal Cost Obligations—Overall (Restructuring) Presentation 420-10-45-1.Y. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 420-10-45-3. 3 SAB Topic 5. onetime employee termination benefits. d.Accounting Disclosure Checklist . disclose how necessary remediation expenditures are considered in the assessment of the assets’ net realizable value. SAB Topic 5.S. it is prohibited to present exit and disposal costs in the income statement net of income taxes or in any manner that implies they are similar to an extraordinary item. Costs associated with an exit or disposal activity involving a discontinued operation shall be included within the results of discontinued operations in accordance with Section 205-20-45. Disclose the exposure for remediation of environmental damage relating to assets or businesses previously disposed. Separate presentation of exit and disposal costs in the income statement is not prohibited. All rights reserved. Disclosure 420-10-50-1. A description of the exit or disposal activity. 420-40-45-2. .Annual (12/10) Page 107 of 290 b. b. c. For each major type of cost associated with the activity (for example. Costs associated with an exit or disposal activity that does not involve a discontinued operation shall be included in income from continuing operations before income taxes in the income statement of a business entity and in income from continuing operations in the statement of activities of a not-for-profit entity (NFP). it shall include the amounts of those costs. a Delaware limited liability partnership and the U. including the facts and circumstances leading to the expected activity and the expected completion date. a Swiss entity.

costs paid or otherwise settled. KPMG & Other Guidance 1 2 KARG 117. For each reportable segment. SAB Topic 5. The staff has requested the following disclosures to fulfill the disclosure requirements of Subtopic 420-10 including MD&A: 2 3 ©2010 KPMG LLP. All rights reserved. and the cumulative amount incurred to date. or if reported in a single “special charge” line item. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the accounting policy for the classification of accretion expense. and ending balances) from balance sheet date in order to explain fully the components and effects of significant restructuring charges. a Delaware limited liability partnership and the U.3. Also. If material. an entity that separately presents charges related to an exit or disposal activity in its income statement should not present a subtotal representing “income from continuing operations before exit costs” before those charges are presented. A reconciliation of the beginning and ending liability balances showing separately the changes during the period attributable to costs incurred and charged to expense. that fact and the reasons why. If a liability for a cost associated with the activity is not recognized because fair value cannot be reasonably estimated. the total amount of costs expected to be incurred in connection with the activity. the amount incurred in the period. SAB Topic 5. The SEC staff believes that it is necessary for a public company to present in the notes to the financial statements involuntary termination charges and exit charges in tabular form. and (c) impairment charges (ASC paragraph 360-10-S99-2) that should be reported as separate line items in the income statement.126. and any adjustments to the liability with an explanation of the reason(s) why. with the related liability balances and activity (e.Annual (12/10) Page 108 of 290 1 The total amount expected to be incurred in connection with the activity the amount incurred in the period. a Swiss entity.g.4. as defined in Subtopic 280-10.P. It is not appropriate to classify the following costs as “restructuring” in an enterprise’s income statement: (a) termination benefits under ASC Subtopic 712-10 that meet the ASC Subtopic 710-10 criteria and are accrued over the service period. clearly disclosed in the footnotes to the financial statements. The line item(s) in the income statement or the statement of activities in which the costs in (b) are aggregated d. new charges.127. net of any adjustments to the liability with an explanation of the reason(s) why e. cash payments. . KARG 117.P. An entity should present a charge related to a liability associated with an exit activity as a component of income from continuing operations and separately disclosed if material.P. other adjustments with explanations. beginning balance. and the cumulative amount incurred to date. 2 c. Disclosures. 47 Subtopic 420-10: Exit or Disposal Cost Obligations—Overall (Restructuring)—SEC Guidance 1 SAB Topic 5.Accounting Disclosure Checklist . (b) inventory write-downs (ASC paragraph 420-10-S99-2).S.

If multiple exit plans have been implemented in the period. and. adjustments for warranties and product returns. and other facility exit costs. results of operations. involuntary employee terminations and related costs.Annual (12/10) Page 109 of 290 a. all of the following situations shall be disclosed in financial statements: a. When the registrant began formulating exit plans for which accrual may be necessary b. Long-term leases (see Sections 840-10-50. Note: The SEC staff would expect similar disclosures for employee termination benefits whether those costs have been recognized pursuant to Subtopics 715-30. c. Any unresolved contingencies or purchase price allocation issues and the types of additional liabilities that may result in an adjustment of the acquisition cost allocation. leasehold termination payments. changes in valuation of current assets such as inventory writedowns. changes in valuation of current assets such as inventory write-downs.Accounting Disclosure Checklist . SAB Topic 5. Disclose losses relating to asset impairments separately from charges based on estimates of future cash expenditures b. present separate information for each individual exit plan that has a material effect on the balance sheet.g. Unused letters of credit b. long-term asset disposals. or cash flows. a Delaware limited liability partnership and the U. and adjustments for warranties and product returns) that appear quantitatively or qualitatively material 4 Examples of common components of exit costs and other types of restructuring charges which if material should be separately disclosed include.. 712-10 or 420-10. All rights reserved. and 840-30-50 in this checklist) c. 5 6 48 Subtopic 440-10: Commitments—Overall Disclosure 440-10-50-1. but are not limited to. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). employee terminations. Assets pledged as security for loans d. Disclose the nature and amounts of additional types of exit costs and other types of restructuring charges (e. long term asset disposals.S. The types and amounts of liabilities recognized for exit costs and involuntary employee termination benefits and included in the acquisition cost allocation. a Swiss entity. leasehold termination payments. Notwithstanding more explicit disclosures required elsewhere in this Codification. 840-20-50. the staff has requested disclosure in either MD&A or the financial statements of: a.P. For material exit or involuntary employee termination costs related to an acquired business. . Pension plans (see Section 715-20-50 in this checklist) ©2010 KPMG LLP. among others.

carrying costs for contracted goods). It is noncancelable. Disclosures of similar or related unconditional purchase obligations may be combined. b. A purchaser is not required to investigate whether a supplier used an unconditional purchase obligation to help secure financing. in the aggregate and. for each of the five succeeding fiscal years 3 The nature of any variable components of the obligation(s) 4 The amounts purchased under the obligation(s) (for example. The existence of cumulative preferred stock dividends in arrears f. including: 1 A commitment for plant acquisition 2 An obligation to reduce debts 3 An obligation to maintain working capital 4 An obligation to restrict dividends 49 Unconditional Purchase Obligations Subsection of Subtopic 440-10: Commitments—Overall Disclosure 440-10-50-2. Disclosure of the amount of imputed interest necessary to reduce the ©2010 KPMG LLP. a Delaware limited liability partnership and the U.Annual (12/10) Page 110 of 290 e. c. or cancelable only in any of the following circumstances: 1 Upon the occurrence of some remote contingency 2 With the permission of the other party 3 If a replacement agreement is signed between the same parties 4 Upon payment of a penalty in an amount such that continuation of the agreement appears reasonably assured. An unconditional purchase obligation that has all of the following characteristics shall be disclosed in accordance with paragraph 440-10-50-4 (in this checklist) (if not recorded on the purchaser's balance sheet) or in accordance with paragraph 440-10-50-6 (in this checklist) (if recorded on the purchaser's balance sheet): a. The disclosures shall include all of the following: 1 The nature and term of the obligation(s) 2 The amount of the fixed and determinable portion of the obligation(s) as of the date of the latest balance sheet presented. It was negotiated as part of arranging financing for the facilities that will provide the contracted goods or services or for costs related to those goods or services (for example. . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist . Commitments. 440-10-50-5.S. if the purchaser would otherwise be unaware of that fact. a Swiss entity. if determinable. A purchaser shall disclose unconditional purchase obligations that meet the criteria of paragraph 440-10-50-2 (in this checklist) and that have not been recognized on its balance sheet. It has a remaining term in excess of one year > Unrecognized Commitments 440-10-50-4. the takeor-pay or throughput contract) for each period for which an income statement is presented. All rights reserved.

if an unconditional purchase obligation is subject to the requirements of both this Subtopic and Subtopic 815-10. Paragraph 815-10-50-6 (in this checklist) explains that. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). recognized and unrecognized. a Swiss entity. An estimate of the possible loss or range of loss or a statement that such an ©2010 KPMG LLP. disclose the following: a. c. . disclose the nature and in some circumstances the amount accrued. b. the entity shall comply with the disclosure requirements of each Subtopic including paragraph 440-10-50-4 (in this checklist). A purchaser shall disclose for each of the five years following the date of the latest balance sheet presented the aggregate amount of payments for unconditional purchase obligations that meet the criteria of paragraph 440-10-502 (in this checklist) and that have been recognized on the purchaser’s balance sheet. a Delaware limited liability partnership and the U. The nature of the contingency b. 440-10-50-7. for goods or services are to be included in the tabular disclosure of contractual obligations. Purchase obligations. If it is at least reasonably possible that the loss estimate will change in the near term and the change would be material to the financial statements. Disclosure of the factors that cause the estimate to be sensitive to change is encouraged but not required.S. Estimate of the possible loss or range of loss. Include an indication that it is at least reasonably possible that a change in the estimate will occur in the near term. if necessary for the financial statements not to be misleading. Indicate the nature of the uncertainty.) 450-20-50-3 through 50-4. 50 Subtopic 450-20: Contingencies—Loss Contingencies Disclosure > Accruals for Loss Contingencies 450-20-50-1. SEC Guidance > Purchase Obligations 1 Regulation S-K Rule 3-03(a)(5). 450-20-50-2.Annual (12/10) Page 111 of 290 unconditional purchase obligation(s) to present value is encouraged but not required.Accounting Disclosure Checklist . > Recognized Commitments 440-10-50-6. For loss contingencies that are probable and estimable. The disclosures required by paragraphs 450-20-50-3 through 50-6 do not apply to loss contingencies arising from an entity’s recurring estimation of its allowance for credit losses. (See paragraph 310-10-50-21. d. All rights reserved. or state that such an estimate cannot be made. > Unrecognized Contingencies 450-20-50-2A. The following disclosures for unrecognized loss contingencies shall be made if there is at least a reasonable possibility that a loss or an additional loss has been incurred: a.

or a loss contingency. in columnar form on the face of the historical financial statements.Annual (12/10) Page 112 of 290 estimate cannot be made. .Accounting Disclosure Checklist . the disclosures of 450-20-50-4 shall be provided. disclosure may best be made by supplementing the historical financial statements with pro forma financial data giving effect to the loss as if it had occurred at the date of the financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Extent to which unasserted claims are reflected in an accrual or may affect the magnitude of the contingency. However. If both conditions are met. Disclosure of noninsured or underinsured risks is not required by this Subtopic. arising after the date of an entity’s financial statements but before those financial statements are issued. c. It is considered probable that a claim will be asserted. including disclosure of the aggregate expected cost to remediate particular sites that are individually material for which the ©2010 KPMG LLP.S. It may be desirable to present pro forma statements. Disclosure is not required of a loss contingency involving an unasserted claim or assessment if there has been no manifestation by a potential claimant of an awareness of a possible claim or assessment unless both of the following conditions are met: a. The nature of the loss or loss contingency b. a Delaware limited liability partnership and the U. 2 SAB Topic 5. usually a balance sheet only. a Swiss entity. An estimate of the amount or range of loss or possible loss or a statement that such an estimate cannot be made. b. > Disclosures Related to Product and Environmental Liabilities Note: See also Subtopic 410-30 for disclosures about environmental liabilities. 450-20-50-7. 450-20-50-10. Disclose the accounting policy for legal costs expected to be incurred in connection with a loss contingency under this Topic. as described in paragraphs 450-20-25-6 through 25-7. All rights reserved. Disclosure of a loss. Occasionally. If disclosure is deemed necessary. in the case of a loss arising after the date of the financial statements if the amount of asset impairment or liability incurrence can be reasonably estimated. Circumstances affecting the reliability and precision of loss estimates. 450-20-50-6. There is a reasonable possibility that the outcome will be unfavorable. may be necessary to keep the financial statements from being misleading if an accrual is not required. the financial statements shall include both of the following: a. Uncertainties with respect to joint and several liabilities that may affect the magnitude of the contingency. disclosure in appropriate circumstances is not discouraged. > Losses Arising After the Date of the Financial Statements 450-20-50-9. SEC Guidance > Policy for Accrual of Legal Costs 1 SEC Staff Announcement (formerly EITF Topic D-77): Accounting for Legal Costs Expected to be Incurred in Connection with a Loss Contingency.Y. Consider the need to disclose the following related to product and environmental contingent liabilities a. b.

51 Subtopic 450-30: Contingencies—Gain Contingencies Disclosure 450-30-50-1.14–. AU 317. a Delaware limited liability partnership and the U. including requirements concerning disclosures of amounts or ranges of reasonably possible losses or the fact that an estimate cannot be made. All rights reserved. Uncertainties regarding the legal sufficiency of insurance claims or the solvency of carriers. . f. Disclose the potential effects of illegal acts on the entity’s operations and on amounts presented in the financial statements. indemnification arrangements. KPMG & Other Guidance 1. 2. that is reasonably possible. disclose the estimated additional loss or range of loss. but care shall be exercised to avoid misleading implications as to the likelihood of realization. h. a Swiss entity. including the addition of quantitative information as a matter gets close to resolution.Annual (12/10) Page 113 of 290 likelihood of contribution by other responsible parties have not been established. or state that such an estimate cannot be made. Time period over which accrued or presently unrecognized amounts may be paid out. g. d. In the October 2010 Dear CFO letter related to potential risks and costs associated with mortgage and foreclosure-related activities or exposures. The Staff reminded registrants that neither “precision” nor “confidence” is included in the relevant standards.S.Accounting Disclosure Checklist . Nature and terms of cost-sharing agreements.15. e. ©2010 KPMG LLP. The Staff observed that many registrants fail to disclose an “estimate of the possible loss or range of loss” because they assert they are unable to make such an estimate with precision or confidence. or other sources. Adequate disclosure shall be made of a contingency that might result in a gain. The Staff indicated that they expect loss contingency disclosures to be updated as additional information becomes available. In addition. the SEC staff reiterated the disclosure requirements of Subtopic 45020. The SEC staff has recently raised questions about disclosures of loss contingencies under current accounting guidance. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Extent to which disclosed but unrecognized contingent losses are expected to be recoverable through insurance. If there is at least a reasonable possibility that a loss exceeding amounts already recognized may have been incurred and the amount of that additional loss would be material. Material components of the accrual and significant assumptions underlying estimate. and any material limitations of that recovery. i. the SEC staff has indicated that they are scrutinizing whether companies are fully complying with existing standards.

the reasons why it cannot estimate the maximum potential amount. such as from the guarantor’s right to proceed against an outside party.Annual (12/10) Page 114 of 290 52 Subtopic 460-10: Guarantees—Overall Disclosure > Information About Each Guarantee or Group of Similar Guarantees > > Loss Contingencies 460-10-50-2. b. Consideration should be given to disclosing. Other agreements that in substance have the same guarantee characteristic. The disclosure of the above loss contingencies shall include the nature and amount of the guarantee. Guarantees to repurchase receivables (or.Accounting Disclosure Checklist . Guarantees of indebtedness of others. All rights reserved. to repurchase the related property) that have been sold or otherwise assigned d. in some cases. a Delaware limited liability partnership and the U. as of the date of the statement of financial position) of the payment/performance risk of the guarantee (for example. including indirect guarantees of indebtedness of others b. 460-10-50-3. including all of the following: 1 The approximate term of the guarantee 2 How the guarantee arose 3 The events or circumstances that would require the guarantor to perform under the guarantee 4 The current status (that is. if estimable. Obligations of commercial banks under standby letters of credit c. a Swiss entity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). that fact 3 If the guarantor is unable to develop an estimate of the maximum potential amount of future payments under its guarantee. All of the following information about the maximum potential amount of future payments under the guarantee: 1 The maximum potential amount of future payments (undiscounted) that the guarantor could be required to make under the guarantee.S. the value of any recovery that could be expected to result. ©2010 KPMG LLP. which shall not be reduced by the effect of any amounts that may possibly be recovered under recourse or collateralization provisions in the guarantee (which are addressed under (d) and (e)) 2 If the terms of the guarantee provide for no limitation to the maximum potential future payments under the guarantee. Examples include the following: a. . > > Disclosures About a Guarantor’s Obligation 460-10-50-4. An entity shall disclose certain loss contingencies even though the possibility of loss may be remote. even if the likelihood of the guarantor’s having to make any payments under the guarantee is remote: a. The nature of the guarantee. the current status of the payment/performance risk of a credit-risk-related guarantee could be based on either recently issued external credit ratings or current internal groupings used by the guarantor to manage its risk) 5 If the entity uses internal groupings for purposes of item (a)(4). A guarantor shall disclose all of the following information about each guarantee. or each group of similar guarantees. how those groupings are determined and used for managing risk.

The current carrying amount of the liability. Paragraphs 450-20-50-4 through 50-6 (in this checklist) provide disclosure guidance for circumstances in which no accrual is made for a loss contingency.Annual (12/10) Page 115 of 290 c. The nature of any assets held either as collateral or by third parties that. and certain entities for which the controlling financial interest cannot be assessed by analyzing voting interests.S. if any. All rights reserved. the guarantor can obtain and liquidate to recover all or a portion of the amounts paid under the guarantee f. See Example 1 (paragraph 460-10-55-25) for an illustration of the required disclosure. The disclosures required by this Subsection do not eliminate or affect the following disclosure requirements: a. > Effect of the Guarantee Disclosure Requirements on the Disclosure Requirements of Other Topics 460-10-50-5. The requirements in the General Subsection of Section 825-10-50 (in this checklist) that certain entities disclose the fair value of their financial guarantees issued b. In those cases.Accounting Disclosure Checklist . Paragraph 460-10-25-6 states that an inability to make a reasonable estimate of the amount of a warranty obligation at the time of sale because of significant uncertainty about possible claims precludes accrual. The nature of any recourse provisions that would enable the guarantor to recover from third parties any of the amounts paid under the guarantee e. for the guarantor’s obligations under the guarantee (including the amount. That paragraph also addresses related implications. a Swiss entity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the disclosures required by this Topic are incremental to the disclosures required by Topic 850. which apply to guarantees that are accounted for as derivatives d. regardless of whether the guarantee is freestanding or embedded in another contract d. 53 Product Warranties Subsection of Subtopic 460-10: Guarantees—Overall Disclosure 460-10-50-7. the disclosures required by that paragraph shall be made. The requirements in paragraphs 450-20-50-3 through 50-4 that an entity disclose a contingent loss that has a reasonable possibility of occurring c. . In those circumstances. The requirements in Section 275-10-50 (in this checklist) that an entity disclose information about risks and uncertainties that could significantly affect the amounts reported in the financial statements in the near term. 460-10-50-8. recognized under Section 450-20-30). 460-10-50-6. if any. equity method investees. A guarantor shall disclose all of the following information for product ©2010 KPMG LLP. the approximate extent to which the proceeds from liquidation of assets held either as collateral or by third parties would be expected to cover the maximum potential amount of future payments under the guarantee. If estimable. a Delaware limited liability partnership and the U. The requirements in the Disclosure Sections of Topic 815. upon the occurrence of any triggering event or condition under the guarantee. Some guarantees are issued to benefit entities that are related parties such as joint ventures.

Presentation > Classification of Debt that Includes Covenants See guidance in paragraph 470-10-45-1.Accounting Disclosure Checklist . > Due on Demand Loan Arrangements See guidance in paragraphs 470-10-45-9 through 45-10. A tabular reconciliation of the changes in the guarantor’s aggregate product warranty liability for the reporting period. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).S. That reconciliation shall include all of the following amounts: 1 The beginning balance of the aggregate product warranty liability 2 The aggregate reductions in that liability for payments made (in cash or in kind) under the warranty 3 The aggregate changes in the liability for accruals related to product warranties issued during the reporting period 4 The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates) 5 The ending balance of the aggregate product warranty liability. The information required to be disclosed by paragraph 460-10-50-4 (in this checklist) except that a guarantor is not required to disclose the maximum potential amount of future payments specified in paragraph 460-10-50-4(b) (in this checklist) b. > Callable Debt See guidance in paragraphs 470-10-45-11 through 45-12. . Cross-references to the applicable guidance are included below. ©2010 KPMG LLP. All rights reserved. 54 Subtopic 470-10: Debt—Overall Note: FASB ASC Section 470-10-45 includes guidance on classifying long-term debt as either current or non-current in a classified balance sheet. a Swiss entity. The guarantor’s accounting policy and methodology used in determining its liability for product warranties (including any liability [such as deferred revenue] associated with extended warranties) c. a Delaware limited liability partnership and the U. > Subjective Acceleration Clauses See guidance in paragraph 470-10-45-2. > Classification of Increasing-Rate Debt See guidance in paragraphs 470-10-45-7 through 45-8.Annual (12/10) Page 116 of 290 warranties and other guarantee contracts described in paragraph 460-10-15-9: a. > Classification of Revolving Credit Agreements Subject to Lock-Box Arrangements and Subjective Acceleration Clauses See guidance in paragraphs 470-10-45-3 through 45-6.

Paragraph 505-10-50-3 (in this checklist) requires that an entity explain.) See Example 3 (paragraph 470-10-55-10) for an illustration of this disclosure requirement. in some situations long-term debt subject to a subjective acceleration clause shall be reclassified. If a short-term obligation is excluded from current liabilities pursuant to the provisions of this Subtopic. > Summary Disclosure of Securities Outstanding 470-10-50-5. 470-10-50-2. > Short-Term Obligations Expected to Be Refinanced 470-10-50-4. including debt securities. That paragraph states further that neither reclassification nor disclosure is required if the likelihood of the acceleration of the due date is remote. is included as a long-term liability in the disclosure of debt maturities). a Swiss entity. a Delaware limited liability partnership and the U. As indicated in paragraph 470-10-45-2. The combined aggregate amount of maturities and sinking fund requirements for all long-term borrowings shall be disclosed for each of the five years following the date of the latest balance sheet presented. That paragraph explains that other situations would indicate only disclosure of the existence of such clauses. (See Section 50510-50 for disclosure guidance that applies to securities. in the case of an unclassified balance sheet.Annual (12/10) Page 117 of 290 > Short-Term Obligations Expected to Be Refinanced See guidance in paragraphs 470-10-45-12A through 45-13. the notes to financial statements shall include a general description of the financing agreement and the terms of any new obligation incurred or expected to be incurred or equity securities issued or expected to be issued as a result of a refinancing. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . the pertinent rights and privileges of various securities outstanding.S. All rights reserved. If an obligation under paragraph 470-10-45-11 (callable debt) is classified as a long-term liability (or. > Transactions after the Balance Sheet Date See guidance in paragraph 470-10-45-21. such as when the lender historically has not accelerated due dates of loans containing similar clauses and the financial condition of the borrower is strong and its prospects are bright. the circumstances shall be disclosed. > Subjective Acceleration Clauses 470-10-50-3.Accounting Disclosure Checklist . > Intent and Ability to Refinance on a Long-Term Basis See guidance in paragraphs 470-10-45-14 through 45-20. > Imputed Interest 835-30-45-2 The description of a note with imputed interest shall include the effective ©2010 KPMG LLP. Disclosure > Disclosure of Long-Term Obligations 470-10-50-1. in summary form within its financial statements.

. If a default or breach exists but acceleration of the obligation has been waived for a stated period of time beyond the date of the most recent balance sheet being filed. (e) and (f) of this section for exceptions to the general rule. shall be stated. SEC Guidance Note: The SEC issued an interpretive release (Release No. The general rule is that every issuer of a registered security that is guaranteed and every guarantor of a registered security must file the financial statements required for a registrant by Regulation S-X. and similar debt since the date of the latest balance sheet being filed. leverage ratio disclosures and contractual obligations table disclosures. (d). a Delaware limited liability partnership and the U. The interpretive release reemphasizes existing guidance for liquidity disclosures. in a footnote. 4 ©2010 KPMG LLP.S. > Defaults 2 Regulation S-X Rule 4-08(c). condensed consolidating financial information for the same periods. or any breach of covenant of a related indenture or agreement. > Guarantors and Affiliates Whose Securities Collateralize an Issue Registered or Being Registered 3 Regulation S-X Rule 3-10. The face amount shall also be disclosed in the financial statements or in the notes to the statements. the parent company’s financial statements usually must include. Refer to paragraphs (b).Annual (12/10) Page 118 of 290 interest rate. The parent company b. Regulation S-X Rule 3-10. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). All rights reserved. sinking fund. The facts and amounts concerning any default in principal. (d). or (e) applies.Accounting Disclosure Checklist . Any other subsidiaries of the parent company on a combined basis e. State significant changes in authorized or issued amounts of bonds. Only one of these paragraphs can apply to a single issuer or guarantor. The total consolidated amounts. 33-9144) to improve discussion of liquidity and capital resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations in order to facilitate understanding by investors of the liquidity and funding risks facing the registrant. 1 Regulation S-X Rule 4-08(f). interest. a Swiss entity. with a separate column (if applicable) for: a. The subsidiary issuer c. state the amount of the obligation and the period of the waiver. The guarantor subsidiaries of the parent company on a combined basis d. mortgages. or redemption provisions with respect to any issue of securities or credit agreements. following the guidance in paragraph (i) of this section. (c). Paragraph (g) of this section is a special rule for recently acquired issuers or guarantors that overrides each of these exceptions for a specific issuer or guarantor. which default or breach existed at the date of the most recent balance sheet being filed and which has not been subsequently cured. If 1 of the exceptions in (c). Consolidating adjustments f.

Any expense recognized on the date of a conversion of convertible debt related to an inducement offer (see paragraph 470-20-40-16) shall not be reported as an extraordinary item.Accounting Disclosure Checklist . in a manner consistent with the two-class method in paragraph 260-10-45-60B. 2009. Any expense recognized on the date of conversion of convertible debt related to a beneficial conversion feature (see paragraph 470-20-40-1) shall not be classified as extraordinary. ASU 2009-15 was also made effective for new arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15. attributable to the loaned shares shall be deducted in computing income available to common shareholders. Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. see Section 505-10-50.Annual (12/10) Page 119 of 290 > Classification of Subsidiary’s Loan Payable in Consolidated Balance Sheet when Subsidiary’s and Parent’s Fiscal Years Differ 5 SEC Observer Comment (from EITF 88-15): Classify as current a loan payable of a subsidiary that is current based on the parent’s fiscal year-end when a consolidated subsidiary has a different year-end from the parent company. If dividends on the loaned shares are not reimbursed to the entity. Loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . which is effective for fiscal years beginning on or after December 15. > EPS 470-20-50-2. 2009. including contractual (accumulated) dividends and participation rights in undistributed earnings.S. at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation. any amounts. ASU 2009-15 may not be early adopted for those arrangements. a Delaware limited liability partnership and the U. and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. 470-20-45-2. > Own-Share Lending Arrangements Issued in Contemplation of Convertible Debt Issuance 470-20-45-2A. Disclosure > Equity 470-20-50-1. Presentation > Income Statement Classification 470-20-45-1. For disclosures about securities in relationship to earnings per share ©2010 KPMG LLP. 55 Subtopic 470-20: Debt—Debt with Conversion and Other Options Note: The contents in this Subtopic have been updated for ASU 2009-15. For disclosures about securities as part of equity disclosures. a Swiss entity. All rights reserved.

The fair value of the outstanding loaned shares as of the balance sheet date e. see paragraph 260-10-50-1(c). . The disclosures must be made on an annual and interim basis in any period in which a share-lending arrangement is outstanding. a Swiss entity. Any amounts of dividends paid related to the loaned shares that will not be reimbursed. The treatment of the share-lending arrangement for the purposes of calculating earnings per share f. all significant terms of the share-lending arrangement including 1 2 3 4 the number of shares the term the circumstances under which cash settlement would be required any requirements for the counterparty to provide collateral c. The entity’s reason for entering into the share-lending arrangement d. An entity that enters into a share-lending arrangement on its own shares in contemplation of a convertible debt offering or other financing shall disclose all of the following. In the period in which an entity concludes that it is probable that the counterparty to its share-lending arrangement will default. 470-20-50-2C. the entity shall disclose the number of shares related to the sharelending arrangement that will be reflected in basic and diluted earnings per share ©2010 KPMG LLP. The unamortized amount of the issuance costs associated with the sharelending arrangement at the balance sheet date g. > Own-Share Lending Arrangements Issued in Contemplation of Convertible Debt Issuance 470-20-50-2A. a Delaware limited liability partnership and the U. the entity shall disclose the amount of expense reported in the statement of earnings related to the default.Accounting Disclosure Checklist . All rights reserved. An entity that enters into a share-lending arrangement on its own shares in contemplation of a convertible debt offering or other financing shall also make the disclosures required by Topic 505. The amount of interest cost recognized relating to the amortization of the issuance cost associated with the share-lending arrangement for the reporting period i. A description of any outstanding share-lending arrangements on an entity’s own stock and b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The classification of the issuance costs associated with the share-lending arrangement at the balance sheet date h. 470-20-50-2B. If default is probable but has not yet occurred. The entity shall disclose in any subsequent period any material changes in the amount of expense as a result of changes in the fair value of the entity’s shares or the probable recoveries.S.Annual (12/10) Page 120 of 290 (EPS) disclosures. a.

regardless of whether the instrument is currently convertible ©2010 KPMG LLP. an entity shall disclose all of the following: 1 2 3 The remaining period over which any discount on the liability component will be amortized The conversion price and the number of shares on which the aggregate consideration to be delivered upon conversion is determined For a public entityonly.S.S. 56 Cash Conversion Subsection of Subtopic 470-20: Debt—Debt with Conversion and Other Options Note: For purposes of the Cash Conversion Subsection of Subtopic 470-20. GAAP to make that determination. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). an entity shall disclose all of the following: a. Disclosure 470-20-50-3.Annual (12/10) Page 121 of 290 when the counterparty defaults. a Swiss entity. all terms of the convertible debt instrument (including the equity component) shall be considered. the balance sheet classification of the liability component does not affect the measurement of that component under paragraphs 470-20-35-1 through 470-20-35-4. For purposes of applying other applicable U. the term public entity includes subsidiaries of public entities. The carrying amount of the equity component b. the amount by which the instrument’s if-converted value exceeds its principal amount. 470-20-50-5. An entity shall provide the incremental disclosures required by the guidance in this Section in annual financial statements for convertible debt instruments within the scope of the Cash Conversion Subsections that were outstanding during any of the periods presented. As of each date for which a statement of financial position is presented. Presentation > Balance Sheet Classification of Liability Component 470-20-45-3. a Delaware limited liability partnership and the U. Additionally. 470-20-50-4. The guidance in the Cash Conversion Subsections does not affect an issuer’s determination of whether the liability component should be classified as a current liability or a long-term liability. For the liability component: 1 2 3 The principal amount The unamortized discount The net carrying amount.Accounting Disclosure Checklist . . All rights reserved. As of the date of the most recent statement of financial position that is presented.

Gains and losses shall not be amortized to future periods. ©2010 KPMG LLP. The amortization of the debt discount relating to the participation liability shall be included in interest expense. Terms of the participations by the lender in either the appreciation in the market value of the mortgaged real estate project or the results of operations of the mortgaged real estate project. Gains and losses from extinguishment of debt that meet the criteria in Subtopic 225-20 are not precluded from being classified as extraordinary items. The amount of interest cost recognized for the period relating to both the contractual interest coupon and amortization of the discount on the liability component. For each period for which a statement of financial performance is presented. or equity instruments: 1 2 3 4 The terms of those derivative transactions How those derivative transactions relate to the instruments within the scope of the Cash Conversion Subsections The number of shares underlying the derivative transactions The reasons for entering into those derivative transactions. the debt extinguishment gain or loss shall be reported as required by paragraph 47050-40-2. liabilities. 58 Subtopic 470-50: Debt—Modifications and Extinguishments Presentation 470-50-45-1. .Accounting Disclosure Checklist . an entity shall disclose both of the following: a. All rights reserved. The borrower's financial statements shall disclose both of the following: a. 470-30-45-2. 470-20-50-6. If the participating mortgage loan is extinguished before its due date. 57 Subtopic 470-30: Debt—Participating Mortgage Loans Presentation 470-30-45-1.S. 470-30-50-1. The aggregate amount of participating mortgage obligations at the balance sheet date.Annual (12/10) Page 122 of 290 4 All of the following information about derivative transactions entered into in connection with the issuance of instruments within the scope of the Cash Conversion Subsections regardless of whether such derivative transactions are accounted for as assets. a Delaware limited liability partnership and the U. The effective interest rate on the liability component for the period b. which states that a difference between the reacquisition price and the net carrying amount of the extinguished debt shall be recognized currently in income of the period of extinguishment as losses or gains and identified as a separate item. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Swiss entity. or both. with separate disclosure of the aggregate participation liabilities and related debt discounts b.

Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. 470-60-45-2. a Swiss entity. A debtor shall disclose in financial statements for periods after a troubled debt restructuring the extent to which amounts contingently payable are included in the carrying amount of restructured payables pursuant to the provisions of paragraph 470-60-35-7. 125. Disclosure 470-50-50-1. separate restructurings within a fiscal period for the same category of payables (for example.Annual (12/10) Page 123 of 290 470-50-45-2. 470-60-50-2. a description of the principal changes in terms.S.Accounting Disclosure Checklist . Aggregate gain on restructuring of payables c. Disclosure 470-60-50-1. for example. If debt was considered to be extinguished by in-substance defeasance under the provisions of FASB Statement No. Aggregate net gain or loss on transfers of assets recognized during the period (see paragraphs 470-60-35-3 and 470-60-35-8) d. 76. A debtor shall disclose. All or a portion of the carrying amount of the payable at the time of the restructuring may need to be reclassified in the balance sheet because of changes in the terms. All rights reserved. a general description of the transaction and the amount of debt that is considered extinguished at the end of each period that debt remains outstanding shall be disclosed. any charges to earnings resulting from application of paragraph 470-50-40-21(c) shall not be classified as extraordinary. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). before the effective date of FASB Statement No. accounts payable or subordinated debentures) may be grouped for disclosure purposes b. either in the body of the financial statements or in the accompanying notes. a debtor shall also disclose in those financial statements total amounts that are contingently payable on restructured payables and the conditions under which those amounts would become payable or would be ©2010 KPMG LLP. Per-share amount of the aggregate gain on restructuring of payables. Extinguishment of Debt. all of the following information about troubled debt restructurings that have occurred during a period for which financial statements are presented: a. For each restructuring. the major features of settlement. . However. a change in the amount of the payable due within one year after the date of the debtor's balance sheet. A troubled debt restructuring of a short-term obligation after the date of a debtor's balance sheet but before that balance sheet is issued or is available to be issued (as discussed in Section 855-10-25) may affect the classification of that obligation in accordance with Subtopic 470-10. a Delaware limited liability partnership and the U. If required by paragraphs 450-20-50-1 through 50-6 and 450-20-50-9 through 50-10 (in this checklist). 59 Subtopic 470-60: Debt—Troubled Debt Restructurings by Debtors Presentation 470-60-45-1. or both.

the disclosure requirements are deferred indefinitely only for nonpublic entities that are not SEC registrants. noncontrolling interests) that are required to be redeemed only upon liquidation or termination of that subsidiary is deferred indefinitely for all entities. but it does not apply to preferred shares that are redeemable on a fixed date and have dividend payments that are either fixed or linked to an index.. 4 Mandatorily redeemable instruments issued by a subsidiary (i. and disclosure guidance in this Subtopic applicable to mandatorily redeemable financial instruments is deferred indefinitely for nonpublic entities that are not SEC registrants unless the instruments are redeemable on fixed dates for amounts that are fixed or determined by reference to specified indices.e. Instrument with these characteristics issued on or after November 5.e. Disclosures. (For example.. 2003 by a subsidiary (i. All rights reserved. . For instruments with these characteristics. “Effective Date. mandatorily redeemable noncontrolling interests) that do not meet the criteria for deferral under (2) or (3) may nevertheless meet the deferral criteria under (1). the disclosure requirements in paragraph 480-10-50-1 through 50-3 are not deferred for public entities or for nonpublic entities that are SEC registrants.Annual (12/10) Page 124 of 290 forgiven.Accounting Disclosure Checklist . 150. Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. For instruments with these characteristics. 3 The measurement guidance in this Subtopic applicable to shares that were issued before November 5. Under FASB Staff Position FAS 150-3. 2003 are not subject to this deferral. the disclosure requirements in paragraph 480-10-50-1 through 50-3 are not deferred for public entities or for nonpublic entities that are SEC registrants. 2 The classification and measurement guidance in this Subtopic applicable to shares issued by a subsidiary (i. the disclosure requirements are deferred indefinitely only for nonpublic entities that are not SEC registrants. such as LIBOR. 60 Subtopic 480-10: Distinguishing Liabilities from Equity—Overall (Statement 150 and related interpretations) Note: The FASB content in Subtopic 480-10 is based on FASB Statement No.e.S. in which case that deferral applies for non-SEC registrants. The requirements in this Subtopic are effective for all other instruments in the ©2010 KPMG LLP. however. (SEC registrants must apply the measurement guidance in EITF Topic D-98 to those redeemable noncontrolling interests. and Transition for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests Under FASB Statement No. measurement. the deferral applies to shares issued by a non-SEC registrant that are redeemable upon death of the holder.” the following deferrals apply: 1 The classification.. noncontrolling interests) that are required to be redeemed before liquidation or termination of that subsidiary is deferred indefinitely for all entities.) This deferral does not apply to public entities or nonpublic entities that are SEC registrants. a Delaware limited liability partnership and the U.) However. a Swiss entity. 150. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

Refer to paragraph 480-10-65-1 for more details. Any amounts paid or to be paid to holders of the contracts discussed in paragraph 480-10-35-3 in excess of the initial measurement amount shall be reflected in interest cost. the entity should report the excess of that book value over the liability reported for the mandatorily redeemable shares as an excess of assets over liabilities (equity). .S. If all of an entity’s shares are subject to mandatory redemption and the entity is not subject to the deferral in paragraph 480-10-65-1. If the redemption price of the mandatorily redeemable shares is less than the book value of those shares. 480-10-45-2B. a Swiss entity. > EPS 480-10-45-4.1 and 12. The redemption price may be a fixed amount or may vary based on specified conditions. an excess of the redemption price of the shares over the entity’s equity balance shall be reported as an excess of liabilities over assets (a deficit). Depending on the settlement terms. Entities that have no equity instruments outstanding but have financial instruments issued in the form of shares. all of which are subject to mandatory redemption on the occurrence of events that are certain to occur. All rights reserved.Accounting Disclosure Checklist . 480-10-45-2. shall describe those instruments as shares subject to mandatory redemption in statements of financial position to distinguish those instruments from other liabilities. 480-10-45-2A. 480-10-45-3.Annual (12/10) Page 125 of 290 scope of this Subtopic (Statement 150) to which the deferral in FSP FAS 150-3 does not apply. all of which are mandatorily redeemable financial instruments required to be classified as liabilities. even though the mandatorily redeemable shares are reported as a liability. Presentation 480-10-45-1.2 of KPMG’s FAS 150 Handbook for a summary of the deferral guidance. a Delaware limited liability partnership and the U. this Subtopic requires that mandatorily redeemable shares that are not subject to the deferral in paragraph 480-10-65-1 be measured at either the present value of the amount to be paid at settlement or the amount of cash that would be paid under the conditions specified in the contract if settlement occurred at the reporting date. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Items within the scope of this Subtopic (Statement 150) shall be presented as liabilities (or assets in some circumstances). Refer also to tables 12. Entities that have issued mandatorily redeemable shares of common stock or entered into forward contracts that require physical settlement by repurchase of a fixed number of the issuer’s equity shares of common stock in ©2010 KPMG LLP. Similarly. payments to holders of such instruments and related accruals shall be presented separately from payments to and interest due to other creditors in statements of cash flows and income. Those items shall not be presented between the liabilities section and the equity section of the statement of financial position. Some entities have outstanding shares. recognizing the resulting change in that amount as interest cost (change in redemption amount).

all of the following: 1 2 3 The forward price or option strike price The number of issuer's shares to which the contract is indexed The settlement date or dates of the contract. That a contract does not limit the amount that the issuer could be required to pay or the number of shares that the issuer could be required to issue. Paragraph 505-10-50-3 (in this checklist) requires additional disclosures ©2010 KPMG LLP. All rights reserved. Additionally. Disclosure 480-10-50-1. Any amounts. The maximum number of shares that could be required to be issued. a Delaware limited liability partnership and the U. The maximum amount that the issuer could be required to pay to redeem the instrument by physical settlement. "the issuer is obligated to issue an additional X shares or pay an additional Y dollars in cash for each $1 decrease in the fair value of one share") c. determined under the conditions specified in the contract if the settlement were to occur at the reporting date b. attributable to shares that are to be redeemed or repurchased that have not been recognized as interest costs in accordance with paragraph 480-10-35-3 shall be deducted in computing income available to common shareholders (the numerator of the EPS calculation). or the number of shares that would be issued and their fair value.Annual (12/10) Page 126 of 290 exchange for cash shall exclude the common shares that are to be redeemed or repurchased in calculating basic and diluted earnings per share (EPS). a Swiss entity. . if any. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). How changes in the fair value of the issuer's equity shares would affect those settlement amounts (for example. Entities that issue financial instruments recognized under the guidance in Section 480-10-25 shall disclose both of the following: a. including contractual (accumulated) dividends and participation rights in undistributed earnings. 480-10-50-2.Accounting Disclosure Checklist . 480-10-50-3. for all outstanding financial instruments recognized under the guidance in Section 480-10-25 and for each settlement alternative. if applicable f. The nature and terms of the financial instruments b. The rights and obligations embodied in those instruments. as applicable. including both: 1 2 Settlement alternatives. if applicable d. For a forward contract or an option indexed to the issuer's equity shares. consistently with the two-class method set forth in paragraphs 260-10-45-60 through 45-70.S. if applicable e. in the contract The entity that controls the settlement alternatives. issuers shall disclose all of the following: a. The amount that would be paid.

such as stocks which must be redeemed out of future earnings. Common stocks b. For example. Derivative instruments c. 2 SEC Staff Announcement (formerly EITF Topic D-98. Those entities shall disclose the components of the liability that would otherwise be related to shareholders’ interest and other comprehensive income (if any) subject to the redemption feature (for example. Share-based payment arrangements with employees 3 SEC Staff Announcement (formerly EITF Topic D-98). All rights reserved. a Swiss entity. Although ASR 268 specifically describes and discusses preferred securities. or c.Accounting Disclosure Checklist . often referred to as classification in “temporary equity”) any class of stock which has any of the following characteristics: a. Regulation S-X Rule 5-02. It is redeemable at the option of the holder. whether by operation of a sinking fund or otherwise.Annual (12/10) Page 127 of 290 for actual issuances and settlements that occurred during the accounting period. for example: a. Include under this caption (outside of permanent equity.27(b). Securities held by an employee stock ownership plan e. . preferred stock subject to mandatory redemption requirements or whose redemption is outside the control of the issuer. Noncontrolling interests d. b. the SEC staff believes that ASR 268 also provides analogous guidance for other redeemable equity instruments including. It is redeemable at a fixed or determinable price on a fixed or determinable date or dates. an equity instrument subject to potential redemption under a freestanding written put option is not subject to ASR 268 (since the put option liability is considered a separate ©2010 KPMG LLP. 480-10-50-4. 61 Subtopic 480-10: Distinguishing Liabilities from Equity—Overall—SEC Guidance (ASR 268.S. now paragraph 480-10S99-3A). par value and other paid-in amounts of mandatorily redeemable instruments shall be disclosed separately from the amount of retained earnings or accumulated deficit). Some entities have no equity instruments outstanding but have financial instruments in the form of shares. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Freestanding financial instruments that are classified as assets or liabilities pursuant to Subtopic 480-10 or other applicable GAAP (including those that contain separated derivative assets and derivative liabilities) are not subject to ASR 268. all of which are mandatorily redeemable financial instruments required to be classified as liabilities. EITF D-98) > Equity Instruments with Redemption Features That Are Not Solely within the Control of the Issuer >> Types of Instruments Required to Be Classified Outside Permanent Equity 1 ASR 268. a Delaware limited liability partnership and the U. It has conditions for redemption which are not solely within the control of the issuer. EITF D-98.

However. or b. accordingly.E. the host equity instrument is subject to ASR 268. the SEC staff would not object to classifying the entire guaranteed value amount outside of permanent equity due to the uncertainty of the ultimate cash obligation because of a possible market value decline in the underlying security. The host contract. With respect to ESOP securities where the cash obligation relates only to market value guarantee features. All rights reserved.Accounting Disclosure Checklist . a Swiss entity. a registrant should consider the applicability of ASR 268 to: a. Share-based payment awards that qualify for equity classification under Topic 718 are subject to ASR 268 and must be classified outside permanent equity if they have redemption features that are not solely within the control of the issuer. 4 5 6 7 8 9 . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Annual (12/10) Page 128 of 290 unit of account). Securities held by an ESOP (whether or not allocated) must be reported outside of permanent equity if by their terms they can be put to the sponsor for cash. The determination of whether an equity instrument subject to a registration payment arrangement is subject to ASR 268 should be made without regard to the existence of the registration payment arrangement. SEC Observer Comment (EITF 89-11).S. reclassifications of equity amounts would be required based on the market values of the underlying security. The hybrid instrument. Alternatively. when an embedded written put option has been separated from a hybrid financial instrument with an equity host contract. SEC Staff Announcement (formerly EITF Topic D-98). the SEC staff would not object to registrants only classifying outside of permanent equity an amount that represents the maximum cash obligation of the sponsor based on market prices of the underlying security as of the reporting date. SEC Staff Announcement (formerly EITF Topic D-98). SEC Staff Announcement (formerly EITF Topic D-98). A provision in an instrument for the direct or indirect repurchase of shares issued to an employee exists solely to satisfy the employer's minimum statutory tax withholding requirements b. SEC Staff Announcement (formerly EITF Topic D-98). Equity-classified sharebased payment arrangements with employees are not subject to ASR 268 due solely to either of the following: a. When a hybrid financial instrument that is not classified in its entirety as an asset or liability under Subtopic 480-10 or other applicable GAAP contains an embedded derivative. ©2010 KPMG LLP. The issuer should present as temporary equity at each balance sheet date an amount that is based on the redemption amount (intrinsic value) of the instrument. Net cash settlement would be assumed pursuant to Paragraphs 815-40-25-11 through 25-16 solely because of an obligation to deliver registered shares. when the embedded derivative is separated under Subtopic 815-15. a Delaware limited liability partnership and the U. but takes into account the proportion of consideration received in the form of employee services. Freestanding derivative instruments that are classified in stockholders’ equity pursuant to Subtopic 815-40 (EITF 00-19) are not subject to ASR 268. SAB Topic 14. when the embedded derivative is not separated under Subtopic 815-15.

©2010 KPMG LLP. Other applicable GAAP may require a convertible debt instrument to be separated into a liability component and an equity component.Accounting Disclosure Checklist . the guidance in Subtopic 81540 (EITF 00-19) should be used to evaluate whether the issuer controls the actions or events necessary to issue the maximum number of common shares that could be required to be delivered under share settlement of the contract. if the payment of cash or other assets is required only from the distribution of net assets upon the final liquidation or termination of an entity (which may be a less-than-wholly-owned consolidated subsidiary). In these situations. a Delaware limited liability partnership and the U. 15 SEC Staff Announcement (formerly EITF Topic D-98). the equity-classified component of the convertible debt instrument should be considered redeemable if at the balance sheet date the issuer can be required to settle the convertible debt instrument for cash or other assets (that is. a Swiss entity. do not result in an equity instrument being subject to ASR 268. In other words. For example. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). All rights reserved. . If an equity instrument is required to be redeemed for cash or other assets upon the death of the holder. an equity instrument that becomes redeemable upon the death of the holder (at the option of the holder’s heir or estate) or upon the disability of the holder is not subject to ASR 268 if the redemption amount will be funded from the proceeds of an insurance policy that is currently in force and which the registrant has the intent and ability to maintain in force. Ordinary liquidation events. the instrument is currently redeemable or convertible for cash or other assets). an assessment of whether the convertible debt instrument will become redeemable or convertible for cash or other assets at a future date should not be made. then that potential event need not be considered when applying ASR 268. a convertible debt instrument that is not redeemable at the balance sheet date but could become redeemable by the holder of the instrument in the future based on the passage of time or upon the occurrence of a contingent event is not considered currently redeemable at the balance sheet date. thereby triggering redemption. 14 SEC Staff Announcement (formerly EITF Topic D-98). A provision that requires approval of the board of directors cannot be presumed to be within the control of the issuer. 13 SEC Staff Announcement (formerly EITF Topic D-98). For these instruments. If the issuer has the choice to settle the redemption amount in cash or by delivery of a variable number of its own common shares with an equivalent value.S. 11 SEC Staff Announcement (formerly EITF Topic D-98). If the preferred security holders control a majority of the votes of the board of directors through direct representation on the board of directors or through other rights.Annual (12/10) Page 129 of 290 10 SEC Staff Announcement (formerly EITF Topic D-98). which involve the redemption and liquidation of all of an entity's equity instruments for cash or other assets of the entity. As a limited exception that should not be analogized to. the preferred security is redeemable at the option of the holder and classification in temporary equity is required. the instrument is classified as a liability pursuant to Subtopic 480-10 even if an insurance policy would fund the redemption. 12 SEC Staff Announcement (formerly EITF Topic D-98). A change-in-control provision would require a preferred security to be classified in temporary equity if a purchaser could acquire a majority of the voting power of the outstanding common stock without company approval.

A reduction in the issuer's credit rating. a financial instrument (or host contract) that otherwise meets the conditions for temporary equity classification may continue to be classified as a liability provided the financial instrument (or host contract) was classified and accounted for as a liability in fiscal quarters beginning before September 15. The failure to achieve specified earnings targets d. amounts applicable to the following three general classes of securities: 1 2 3 Preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer Preferred stocks which are not redeemable or are redeemable solely at the option of the issuer Common stocks. 19 Regulation S-X Rule 5-02. State on the face of the balance sheet: ©2010 KPMG LLP. a Swiss entity. The SEC staff does not believe it is appropriate to classify a financial instrument (or host contract) that meets the conditions for temporary equity classification under ASR 268 as a liability. and other equity accounts under an appropriate designated caption (e. the equity instrument is required to be classified in temporary equity.S. . common stocks. the Commission will not prohibit the combining of non-redeemable preferred stocks. ASR 268. in balance sheets. Where redeemable preferred stocks are outstanding. All rights reserved. a Delaware limited liability partnership and the U. Such events may include: a. Registrants having preferred stock subject to mandatory redemption requirements or whose redemption is outside their control outstanding are required to present separately. An equity instrument may contain provisions that allow the holder to redeem the instrument for cash or other assets upon the occurrence of events that are not solely within the issuer's control. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).g. >> Presentation on the Face of the Balance Sheet 17 FRR 211. Since these events are not solely within the control of the issuer. Common Stocks. The failure to maintain compliance with debt covenants c.Annual (12/10) Page 130 of 290 16 SEC Staff Announcement (formerly EITF Topic D-98). “Non-Redeemable Preferred Stocks. 18 SEC Staff Announcement (formerly EITF Topic D-98). 2007 and has not subsequently been modified or subject to a remeasurement (new basis) event.04.. b. The failure to have a registration statement declared effective by the SEC by a designated date b.27(b): a. and Other Stockholders’ Equity”) provided that any combinations be exclusive of redeemable preferred stocks. a.Accounting Disclosure Checklist . However.

Accounting Disclosure Checklist - Annual (12/10) Page 131 of 290 1 2 3 the title of each issue the carrying amount redemption amount.

b. If there is more than one issue, these amounts may be aggregated on the face of the balance sheet and details concerning each issue may be presented in the note required by Rule 5-02.28(c) below. c. Show also the dollar amount of any shares subscribed but unissued, and show the deduction of subscriptions receivable there-from. d. If the carrying value is different from the redemption amount, describe the accounting treatment for such difference in the note required by Rule 502.28(c) below. e. Also state in this note or on the face of the balance sheet, for each issue, the number of shares authorized and the number of shares issued or outstanding, as appropriate. >> Disclosures about Preferred Stock (and Other Equity Instruments) Subject to Mandatory Redemption Requirements or Whose Redemption Is Outside the Control of the Issuer 20 Regulation S-X Rule 5-02.28(c). State in a separate note captioned "Redeemable Preferred Stocks": a. A general description of each issue, including its redemption features (e. g. sinking fund, at option of holders, out of future earnings) and the rights, if any, of holders in the event of default, including the effect, if any, on junior securities in the event a required dividend, sinking fund, or other redemption payment(s) is not made; b. The combined aggregate amount of redemption requirements for all issues each year for the five years following the date of the latest balance sheet; and c. The changes in each issue for each period for which an income statement is required to be filed. >>> Disclosure of Measurement Policy Selected for Redeemable Securities and Application Thereof 21 SEC Staff Announcement (formerly EITF Topic D-98): Classification and Measurement of Redeemable Securities. The SEC staff expects the following disclosures to be provided in the notes to the financial statements: a. A description of the accounting method used to adjust the redemption amount of a redeemable equity instrument. b. When a registrant elects to accrete changes in the redemption amount of a redeemable equity instrument in accordance with paragraph 15(b), the redemption amount of the equity instrument as if it were currently redeemable.
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Accounting Disclosure Checklist - Annual (12/10) Page 132 of 290 c. For a redeemable equity instrument that is not adjusted to its redemption amount, the reasons why it is not probable that the instrument will become redeemable. d. When charges or credits are material, a reconciliation between net income and income available to common stockholders. e. The amount credited to equity of the parent upon the deconsolidation of a subsidiary. >>> Redeemable Noncontrolling Interests 22 SEC Staff - 2009 AICPA Conference. The SEC staff observed that ASC Topic 810 requires a reconciliation of total equity on a quarterly basis, which the SEC staff expects to be presented in quarterly reports. However, if redeemable noncontrolling interests exist, the requirement to reconcile total equity in ASC Topic 810 can be inconsistent with ASR 268, which prohibits companies from combining temporary equity and permanent equity. As a result, the SEC staff allows two different approaches: a. Provide a column for redeemable noncontrolling interests in the equity reconciliation, but exclude the related amounts from any “total” column. In that case, the reconciliation could include a row for net income or a supplemental table identifying the allocation of net income among controlling interests, nonredeemable noncontrolling interests, and redeemable noncontrolling interests. b. Exclude redeemable noncontrolling interests from the equity reconciliation, but provide a supplemental table (e.g., in the notes to the financial statements or the “statement of changes in equity and noncontrolling interests”) reconciling the beginning and ending balance of redeemable noncontrolling interests. In that case, the caption “net income” in the equity reconciliation could note parenthetically the amounts related to redeemable noncontrolling interests. 62 Subtopic 505-10: Equity--Overall Presentation > Receivables for Issuance of Equity 505-10-45-2. Presentation of a note as an asset is generally not appropriate and should be offset against stock in the equity section. However, such notes may be recorded as an asset if collected in cash before the financial statements are issued or are available to be issued. > Appropriations of Retained Earnings 505-10-45-3. Appropriation of retained earnings is permitted, provided that it is shown within the shareholders' equity section of the balance sheet and is clearly identified as an appropriation of retained earnings. Disclosure 505-10-50-2. If both financial position and results of operations are presented,
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Accounting Disclosure Checklist - Annual (12/10) Page 133 of 290 disclosure of changes in the separate accounts comprising shareholders' equity (in addition to retained earnings) and of the changes in the number of shares of equity securities during at least the most recent annual fiscal period and any subsequent interim period presented is required to make the financial statements sufficiently informative. Disclosure of such changes may take the form of separate statements or may be made in the basic financial statements or notes thereto. 505-10-50-3. Summarize within the financial statements the pertinent rights and privileges of the various securities outstanding, including: a. Dividend preferences or restrictions. b. Liquidation preferences in the aggregate (on the face of the balance sheet) or restrictions. c. Participation rights. d. Dividend arrearages. e. Call, conversion, and/or exercise rights, prices, and dates. f. Sinking fund requirements. g. Unusual voting rights. h. Significant terms of contracts to issue additional shares. i. Par value (stated or assigned) per share. j. Shares reserved. k. The number of shares issued upon conversion, exercise, or satisfaction of required conditions during at least the most recent annual fiscal period and any subsequent interim period presented. > Securities with Preferences 505-10-50-4. An entity that issues preferred stock (or other senior stock) that has a preference in involuntary liquidation considerably in excess of the par or stated value of the shares shall disclose the liquidation preference of the stock (the relationship between the preference in liquidation and the par or stated value of the shares). That disclosure shall be made in the equity section of the statement of financial position in the aggregate, either parenthetically or in short, rather than on a per-share basis or through disclosure in the notes. 505-10-50-5. In addition, an entity shall disclose both of the following within its financial statements (either on the face of the statement of financial position or in the notes thereto): a. The aggregate or per-share amounts at which preferred stock may be called or is subject to redemption through sinking-fund operations or otherwise b. The aggregate and per-share amounts of arrearages in cumulative preferred dividends. > Convertible Securities 505-10-50-6. The significant terms of the conversion features of a contingently convertible security shall be disclosed to enable users of financial statements to understand the circumstances of the contingency and the potential impact of conversion. Quantitative and qualitative terms of the contingently convertible security include all of the following:
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Accounting Disclosure Checklist - Annual (12/10) Page 134 of 290 a. Events or changes in circumstances that would cause the contingency to be met and any significant features necessary to understand the conversion rights and the timing of those rights (for example, the periods in which the contingency might be met and the securities may be converted if the contingency is met) b. The conversion price and the number of shares into which a security is potentially convertible c. Events or changes in circumstances, if any, that could adjust or change the contingency, conversion price, or number of shares, including significant terms of those changes d. The manner of settlement upon conversion and any alternative settlement methods (for example, cash, shares, or a combination). 505-10-50-7. In order to meet the disclosure requirements of the preceding paragraph, the possible conversion prices and dates as well as other significant terms for each convertible instrument (whether or not contingently convertible) shall be disclosed. For example: The Company is obligated to issue X shares and as the market price of the common stock decreases, the Company is obligated to issue an additional X shares for each $1 decrease in the stock price. 505-10-50-8. Additionally, the issuer shall disclose in the footnotes to its financial statements the terms of the transaction, including the excess of the aggregate fair value of the instruments that the holder would receive at conversion over the proceeds received and the period over which the discount is amortized. 505-10-50-9 Disclosures shall indicate whether the shares that would be issued if the contingently convertible securities were converted are included in the calculation of diluted earnings per share (EPS) and the reasons why or why not. 505-10-50-10. Disclosures of information about derivative instruments entered into in connection with the issuance of the contingently convertible securities may be useful in terms of fully explaining the potential impact of the contingently convertible securities. That information might include the terms of those derivative instruments (including the terms of settlement), how those instruments relate to the contingently convertible securities, and the number of shares underlying the derivative instruments (e.g., the purchase of a call option such that the terms of the purchased call option would be expected to substantially offset changes in value of the written call option embedded in the convertible security). Derivative instruments are also subject to disclosure information, as required by Topic 815. 505-10-50-10A. For incremental disclosure requirements of debt with conversion and other options, see paragraphs 470-20-10-2 and 470-20-50-3 through 50-6 (in this checklist). > Redeemable Securities 505-10-50-11. An entity that issues redeemable stock shall disclose the amount of redemption requirements, separately by issue or combined, for all issues of capital stock that are redeemable at fixed or determinable prices on fixed or determinable dates in each of the five years following the date of the latest statement of financial position presented.
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Accounting Disclosure Checklist - Annual (12/10) Page 135 of 290 KPMG & Other Guidance 1 Targeted (Tracking) Stock . If no terms of the targeted stock require or assure that potential distributions will correlate with the performance of the business unit normally associated with the security, implications that the market value of the security will “track,” or is otherwise linked with, a business unit are subject to challenge by the SEC. Registrants must explain in their filings why the formula for determining the amount available for dividends (or any other term or feature of the security) can be expected to link in some fashion the market value of the class of common stock with the value or performance of any subpart of the registrant, or else state clearly that management does not intend to imply such a linkage. For issuers of targeted (tracking) stock, provide the following additional disclosures: a. Policy for management of cash generated by and capital investment in the referenced units, and policy for the pricing of transactions between the referenced units. b. Conflicts of interest. c. Effects of corporate events (mergers, tender offers, changes in control, adverse tax rulings, liquidation) on the rights of security holders. d. Terms under which one class may be converted into another class. e. Effects of changes in relative market values of the registrant’s outstanding classes of stock on rights of the security holders. 63 Subtopic 505-10: Equity—Overall—SEC Guidance > Discounts on and Unamortized Balances of Shares 1 Regulation S-X Rule 4-07. Discount on shares, or any unamortized balance thereof, shall be shown separately as a deduction from the applicable account(s) as circumstances require. > Common Stock 2 Regulation S-X Rule 5-02.29. a. For each class of common shares state, on the face of the balance sheet, the number of shares issued or outstanding, as appropriate (see § 210.4–07), and the dollar amount thereof. b. If convertible, this fact should be indicated on the face of the balance sheet. c. For each class of common shares state, on the face of the balance sheet or in a note, the title of the issue, the number of shares authorized, and, if convertible, the basis of conversion (see also § 210.4–08(d)). d. Show also the dollar amount of any common shares subscribed but unissued, and show the deduction of subscriptions receivable therefrom. e. Show in a note or statement the changes in each class of common shares for each period for which an income statement is required to be filed. > Other Stockholders' Equity 3 Regulation S-X Rule 5-02.30. a. Separate captions shall be shown for:
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Undistributed earnings of an S corporation must be included in the financial statements as additional paid-in capital on the date its S election is terminated. on the face of the balance sheet. The equity section of a partnership balance sheet should distinguish between amounts ascribed to each ownership class and provide the following: a. > Presentation of S Corporation Undistributed Earnings in Financial Statements upon Termination of S Election 7 SAB Topic 4. ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Present on the face of the balance sheet total liabilities and stockholders' equity. b. > Noncontrolling Interests 4 Regulation S-X Rule 5-02-31. appropriated b.F. All rights reserved. This assumes a constructive distribution to the owners followed by a contribution to the capital of the corporation. A statement of changes in partnership equity for each ownership class should be provided for each period an income statement is included > Preferred Shares 9 Regulation S-X Rule 4-08(d): a. the total amount of the deficit eliminated.Annual (12/10) Page 136 of 290 additional paid-in capital.A. shall be shown parenthetically in the equity section of the balance sheet. other additional capital retained earnings: a. if other than par or stated value. unappropriated Additional paid-in capital and other additional capital may be combined with the stock caption to which it applies. > Presentation of Equity Section in Limited Partnership Financial Statements 8 SAB Topic 4. > Subordinated Debt 6 SAB Topic 4. Equity attributed to the general partners b. > Liabilities and Stockholders’ Equity 5 Regulation S-X Rule 5-02. Equity attributed to the limited partners c. Changes in the number of equity units authorized and outstanding for each ownership class d. a Delaware limited liability partnership and the U. Aggregate preferences on involuntary liquidation. Subordinated debt may not be included in the stockholders' equity section of the balance sheet. For a period of at least 10 years subsequent to the effective date of a quasireorganization. if appropriate. a Swiss entity. Noncontrolling interests in consolidated subsidiaries.B.S. any description of retained earnings shall indicate the point in time from which the new retained earnings dates and for a period of at least three years shall indicate. State separately in a note the amounts represented by preferred stock and the applicable dividend requirements if the preferred stock is material in relation to the consolidated stockholders' equity.32.Accounting Disclosure Checklist . 1 2 3 .

. If the restricted net assets (as defined) of consolidated and unconsolidated subsidiaries and the parent’s equity in the undistributed earnings of 50 percentor-less-owned persons accounted for by the equity method together exceeds 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. > Compensating Balance Arrangements ©2010 KPMG LLP. loans. b. loans. All rights reserved. if determinable. discretionary nature of the dividend). or for other securities offered with “intended” significant dividends: a. separately. or advances. separately. of retained earnings or net income restricted or free of restrictions b. 2 The amounts of such restricted net assets for consolidated and unconsolidated subsidiaries. Intentions and assumptions regarding liquidity and capital resources (in MD&A). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).3-04: Provide a separate schedule in the notes to the financial statements that shows the effects of any changes in the registrant's ownership interest in a subsidiary on the equity attributable to the registrant. 3 The nature of any restrictions on the ability of consolidated and unconsolidated subsidiaries to transfer funds to the registrant in the form of cash dividends. Disclose amount of consolidated retained earnings that represents undistributed earnings of 50 percent-or-less-owned persons accounted for by the equity method c. d. including the source and pertinent provisions of the restrictions and the amount. > Restrictions that Limit the Payment of Dividends by the Registrant 10 Regulation S-X Rule 4-08(e): a. Forward-looking information about cash flows. as of the end of the most recently completed fiscal year. Dividend policy description. c. 4 The amounts of such restricted net assets for consolidated and unconsolidated subsidiaries. Identify risks and limitations (e. > Changes in Stockholder’s Equity and Noncontrolling Interest 11 Regulation S-X Rule 210. > Dividends on Income Deposit Securities 12 SEC-2004 AICPA National Conference on Current SEC and PCAOB Developments. or advances. disclose: 1 The nature of any restrictions on the ability of consolidated and unconsolidated subsidiaries to transfer funds to the registrant in the form of cash dividends. a Swiss entity.S.g.Annual (12/10) Page 137 of 290 b.Accounting Disclosure Checklist . as of the end of the most recently completed fiscal year. The SEC staff noted that they expect the following disclosures by an entity that issues income deposit securities (IDS) which purport to pay a regular dividend equal to all cash in excess of current operating needs. Describe the most significant restrictions on the payment of dividends by the registrant.. a Delaware limited liability partnership and the U. Disclose any restrictions upon retained earnings that arise from the fact that upon involuntary liquidation the aggregate preferences of the preferred shares exceed the par or stated value of such shares.

Disclosure > Disclosures Relating to State Laws 505-30-50-2. stock split. a Delaware limited liability partnership and the U. Subtopic 480-10 Distinguishing Liabilities from Equity—Overall—SEC Guidance. those facts shall be disclosed.C . companies issuing shares in comparable amounts would be required to account for them as stock dividends b.S.e.S. the cost of acquired stock may be shown separately as a deduction from the total of capital stock. Stock Split or Reverse Split) 1 SAB Topic 4. 64 Subtopic 505-20: Equity—Stock Dividends and Stock Splits—SEC Guidance > Capital Structure Change After the Latest Balance Sheet but Before the Release of the Financial Statements (Stock Dividend. if determinable. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). additional paid-in capital. If a corporation's stock is acquired for purposes other than retirement (formal or constructive).Retroactive effect should be given to a change in capital structure (i. explanation of the change made and the date the change became effective. All rights reserved. Cumulative amount of the fair value of shares issued over time. of compensating balance arrangements that exist but are not agreements that legally restrict the use of cash amounts. > Issuance of "Free Distributions" by Japanese Companies 2 SAB Topic 1.General 505-30-45-1. and retained earnings. If state laws relating to an entity's repurchase of its own outstanding common stock restrict the availability of retained earnings for payment of dividends or have other effects of a significant nature.D.S. the following should be disclosed: a. stock dividend. Fair value of shares issued during the year c.S. or if ultimate disposition has not yet been decided. ©2010 KPMG LLP.When U. . GAAP. The method of accounting being used which also indicates that U.Accounting Disclosure Checklist .Annual (12/10) Page 138 of 290 13 SAB Topic 6. or reverse split) that occurs after the balance sheet date but before the release of financial statements with disclosure of the retroactive treatment.H.2 . > Equity Instruments with Redemption Features That Are Not Solely within the Control of the Issuer 14 See SEC Guidance under Section 61. accounting principles for stock dividends is not applied to “free distributions” by Japanese Companies and the financial statements are identified as being prepared in accordance with U. Arrangements and amounts. a Swiss entity.. either in the aggregate figure of a listing of the amounts by year 65 Subtopic 505-30: Equity—Treasury Stock Presentation > Other Presentation Matters . or may be accorded the accounting treatment appropriate for retired stock specified in paragraphs 50530-30-7 through 30-10.

. a Swiss entity. > Grantee Disclosures 505-50-50-2. Disclose revenue recognition policies for the following: 1 Each material type of product or service ©2010 KPMG LLP. the amount of gross operating revenue recognized as a result of the nonmonetary transaction (845-10-50-2) SEC Guidance 1 505-50-S99-1. the instruments are not considered issued until they vest). a Delaware limited liability partnership and the U. the capital of the entity. An entity that acquires goods or services other than employee services in share-based payment transactions shall provide disclosures similar to those required by paragraphs 718-10-50-1 through 50-2 (in this checklist) to the extent that those disclosures are important to an understanding of the effects of those transactions on the financial statements.S. 67 Subtopic 605-10: Revenue Recognition—Overall SEC Guidance 2 SAB Topic 13 notes SEC Staff views on disclosures pertaining to recognition of revenue. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. those equity instruments should be treated as unissued for accounting purposes until the future services are received (i. a. Disclosure > Grantor Disclosures 505-50-50-1. If the grantor of the warrants or rights receives a right to receive future services in exchange for unvested. An asset (other than a note or a receivable) received in return for fully vested.e.Annual (12/10) Page 139 of 290 > Disclosures Relating to Allocation of Repurchase Price 505-30-50-4. If shares are repurchased at a price significantly in excess of the current market price. forfeitable equity instruments. SEC staff announcement.. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. nonforfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments) shall not be displayed as contra-equity by the grantor of the equity instruments. 66 Subtopic 505-50: Equity—Equity-Based Payments to Non-Employees Presentation 505-50-45-1. in part.Accounting Disclosure Checklist . an entity shall disclose the allocation of amounts and the accounting treatment for such amounts to enable the user of the financial statements to understand the nature of significant transactions that may affect. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). All rights reserved. The entity shall disclose: a. In each period's financial statements.

estimates should be disclosed Disclose the accounting policy related to contract acquisition and origination costs. Disclose the method of accounting for multiple-element arrangements 4 For equipment sold on an installed basis. .Annual (12/10) Page 140 of 290 Barter transactions Each element in multiple-element transactions. g. Sales returns: 1 Seller’s gross sales and related accounting policies when right of return exists and product returns are significant 2 Changes in estimated returns recognized in accordance with Subtopic 60515 Amount of revenue recognized in the current period that was included in cumulative-effect adjustment upon adoption of SAB 104 (ASC paragraph 60510-S99-1) 2 3 b. the policy for determining which costs to capitalize as contract acquisition and origination costs Amount of any inventory consigned to others should be reported separately as “inventory consigned to others” or other appropriate caption Amount of cash received for layaway sales should be described as “deposits received from customers for layaway sales” For annual membership fees collected in advance and recognized in revenue. e. net of estimated refunds calculated by analogy to Subtopic 605-15. 2 The amount of cash received from customers during the period. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). If costs are deferred and amortized. 4 The amount of refunds paid. d. 5 The unearned revenue and refund obligations as of the end of the period. Where revenue is recognized based on estimates of cancellations. 3 The amount of revenue recognized in earnings during the period. f. revenue and cost of sales reported in the income statement shall be reduced to reflect estimated returns. disclose for each income statement period presented 1 The unearned revenue and refund obligations as of the beginning of the period. 68 Subtopic 605-15: Revenue Recognition--Products Presentation > General 605-15-45-1 For any sales made with a right of return in which the criteria in paragraph 605-15-25-1 are met.Accounting Disclosure Checklist . All rights reserved.S. a Swiss entity. a Delaware limited liability partnership and the U. the method of accounting for installation services 5 Revenue recognition policy when refund provisions exist. including the policy for how the elements are determined and valued. c. SEC Guidance > Sales of Leased or Licensed Departments ©2010 KPMG LLP.

a Delaware limited liability partnership and the U. b. the Commission believes that sufficient disclosures should be provided to allow for a clear understanding by investors of the subject transactions. The following disclosures should be considered: a.Accounting Disclosure Checklist . Under the alternative policy. If the alternative accounting method is elected. Disclosure > Sales of Vaccines and Bioterror Countermeasures 2 Interpretive Release No. delivered out of stockpiles). SEC interpretive guidance regarding appropriate disclosures with respect to sales of vaccines and bioterror countermeasures to the federal government for placement into stockpiles related to Vaccines for Children Program or the Strategic National Stockpile.Annual (12/10) Page 141 of 290 1 Staff Accounting Bulletin Topic 8A. Additionally. It would be inappropriate for a department store or other retailer to include in its revenue the sales of the leased or licensed departments. A vaccine manufacturer who sells enumerated vaccines related to Federal government stockpile programs may elect an “alternative” accounting policy. cost of sales. related accounting. e. the election of this alternative form of revenue recognition would generally be a significant accounting policy under Topic 235.S. the department store or other retailer should include the rental income as part of its gross revenue. inventory and deferred revenue. Supplemental disclosure of the market value of inventory available to be rotated out of vaccine stockpiles and of sales to third parties that were filled from vaccine stockpiles. Supplemental disclosure of enumerated vaccine product quantities and related product sales revenue for enumerated vaccines actually delivered from stockpiles to the CDC or other party for use during the period (i. . a Swiss entity. such as stock rotation. including all fees received and a description of each enumerated vaccine product that the vaccine manufacturer sells to vaccine stockpiles. d. This alternative accounting policy is limited only to sales of vaccines under Federal government stockpile programs and may not be analogized to. All rights reserved. Disclosures quantifying the effects of using the alternative policy on relevant balance sheet and income statement captions. The staff would not object to disclosure in the footnotes to the financial statements of the amount of the lessee's sales from leased departments. 33-8642. Rather. and the effect of the alternative accounting method in the financial statements. > Finance Charges on Credit Sales Imposed by Department Stores and Other Retailers ©2010 KPMG LLP. including revenue. Vaccine manufacturers should clearly disclose that this alternative policy applies only to enumerated vaccine product sales. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Material terms and conditions of contracts for which the alternative accounting method was selected. The vaccine manufacturer should also describe the nature of its continuing involvement with the stockpiles for enumerated vaccine products for which revenue has been recognized. c.. certain criteria applicable to “bill and hold” transactions ((1) there must be a fixed schedule for delivery of the goods and (2) the ordered goods must have been segregated from the seller’s inventory such and not be subject to being used to fill other orders) need not be met in order to recognize revenue.

information regarding the volume and type of advertising surrendered and received (such as the number of equivalent pages. notes SEC Staff views on disclosures pertaining to arrangements that contain a performance-based incentive fee. All rights reserved.Accounting Disclosure Checklist .B. Explain how contract revenue is allocated among elements (relative fair value or residual method. time and materials. e. For management fees based on a formula. the staff requests that the amount of retailers’ gross revenue from finance charges on credit sales be stated in a footnote and that the income statement classification which includes such revenue be identified. and whether the company has recorded any revenue that is at risk due to future performance contingencies. . 2006). a Swiss entity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). disclose how the period’s revenue is measured (SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. d. ©2010 KPMG LLP. In addition. units of delivery. fair value based on vendor specific evidence or by other means). Entities shall disclose the amount of revenue and expense recognized from advertising barter transactions for each income statement period presented. and describe how they are distinguished. a Delaware limited liability partnership and the U. the amount of any such revenue recorded > Service Period Revenue 2 If revenue is recognized over the service period. based on progress toward completion. a. the number of minutes. and if material. Disclose whether contracts with a single counterparty are combined or bifurcated.S. b. 69 Subtopic 605-20: Revenue Recognition--Services > Advertising Barter Transactions 605-20-50-1.Annual (12/10) Page 142 of 290 3 SAB Topic 8. Disclose how progress is measured (cost to cost. As a minimum. or separate contract elements or milestones. November 30. a. if an entity engages in advertising barter transactions for which the fair value is not determinable within the limits of paragraphs 605-20-25-15 through 25-18. units of work performed). proportional performance. the nature of the contracts giving rise to the contingencies. disclose the accounting policy for management fees based on a formula (such as in the investment advisory and real estate management businesses). SEC Guidance > Accounting for Management Fees Based on a Formula 1 SEC Staff Announcement: Accounting for Management Fees Based on a Formula. c. Identify contract elements permitting separate revenue recognition. or the overall percentage of advertising volume) shall be disclosed for each income statement period presented. Identify types of contract payment milestones and explain how they relate to substantive performance and revenue recognition events.

The following represents the transition and effective date information related to Accounting Standards Update No. In the absence of VSOE or TPE of the standalone selling price for one or more delivered or undelivered elements in a multiple-element arrangement. See guidance on the transition and effective date requirements of ASU 2009-13 in the next section. a Swiss entity. A vendor shall disclose both of the following: a. The description and nature of such arrangements. Earlier application is permitted. This pending content shall be applied on a prospective basis for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15. Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements: a. ©2010 KPMG LLP. Its accounting policy for recognition of revenue from multiple-deliverable arrangements (for example. Application of the “residual method” of allocating an overall arrangement fee between delivered and undelivered elements will no longer be permitted upon adoption of ASU 2009-13 (EITF 08-1). a Delaware limited liability partnership and the U. Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements Note: ASU 2009-13 (EITF 08-1) amends ASC 605-25 to eliminate the requirement that all undelivered elements have vendor specific objective evidence (VSOE) or third party evidence (TPE) before an entity can recognize the portion of an overall arrangement fee that is attributable to items that already have been delivered. . 605-25-65-1. including performance-. termination-. whether deliverables are separable into units of accounting) b. 2009-13. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist . 2009-13. the new guidance will require entities to disclose more information about their multipleelement revenue arrangements. The overall arrangement fee will be allocated to each element (both delivered and undelivered items) based on their relative selling prices. b. 2010. Disclosure 605-25-50-1. entities will be required to estimate the selling prices of those elements. All rights reserved. unless the vendor elects to adopt the pending content on a retroactive basis in accordance with paragraph 605-25-65-1(e) (in this checklist). 71 Subtopic 605-25: Revenue Recognition—Multiple Element Arrangements (after adoption of ASU 2009-13) Pending Content > Transition Related to Accounting Standards Update No. SEC registrants should consider the requirement to disclose the impact of accounting standards that have been issued but not yet adopted under SAB 74.S. regardless of whether those selling prices are evidenced by VSOE or TPE or are based on the entity’s estimated selling price. Additionally.Annual (12/10) Page 143 of 290 70 Subtopic 605-25: Revenue Recognition—Multiple Element Arrangements (prior to adoption of ASU 2009-13) Note: This Subtopic is subject to Pending Content. cancellation-. or refund-type provisions.

the following are examples of methods (but not the only potential methods) that may individually or in combination provide quantitative information to satisfy that objective: 1 The amount of revenue that would have been recognized in the year of adoption if the related arrangements entered into or materially modified after the effective date were subject to the measurement requirements of Subtopic 605-25 (before the amendments resulting from Update 200913). If the effect of adopting the pending content that links to this paragraph is material. Earnings per share e. Revenue b. the qualitative information shall be supplemented with quantitative information in the period of adoption to satisfy the objective of enabling users to understand the effect of the change in accounting principle. Depending on a vendor’s facts and circumstances.S. The effect of the change for the appropriate captions presented.Annual (12/10) Page 144 of 290 If a vendor elects earlier application and the period of adoption is not the first reporting period in the vendor’s fiscal year. All rights reserved. 1 . 2 The amount of revenue that would have been recognized in the year before the year of adoption if the arrangements accounted for under Subtopic 605-25 (before the amendments resulting from Update 2009-13) were subject to the measurement requirements of the pending content that links to this paragraph. a Swiss entity. To satisfy that objective. a vendor shall disclose information that enables users of the financial statements to understand the effect of the change in accounting principle if this pending content is adopted on a prospective basis. Income before income taxes c. a vendor shall disclose at a minimum the following qualitative information by similar types of arrangements: 1 A description of any change in the units of accounting 2 A description of the change in how a vendor allocates the arrangement consideration to various units of accounting 3 A description of the changes in the pattern and timing of revenue recognition 4 Whether the adoption of the pending content that links to this paragraph is expected to have a material effect on financial statements in periods after the initial adoption. 2 Vendors shall disclose the following information at a minimum for all previously reported interim periods in the fiscal year of adoption: a. Net income d. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). d. c. this pending content shall be applied through retrospective application from the beginning of the vendor’s fiscal year. In the year of adoption. 3 For arrangements that precede the adoption of the pending content that links to this paragraph. the amount of revenue recognized in the reporting period and the amount of the deferred revenue as of the end of the period from applying the guidance in Subtopic 605-25 (before the amendments ©2010 KPMG LLP.Accounting Disclosure Checklist . a Delaware limited liability partnership and the U.

to adopt the pending content that links to this paragraph through retrospective application applying the guidance in paragraphs 250-10-45-5 through 45-10. Therefore. Separately. Amended Disclosure Guidance under ASU 2009-13 An entity that has adopted the provisions of ASU 2009-13 is subject to the following disclosure requirements for all multiple-element arrangements within the scope of Subtopic 605-25 (including (1) arrangements that were entered into prior to adopting ASU 2009-13 which continue to be accounted for under EITF 00-21 and (2) arrangements that are scoped out of Subtopic 985-605 because they involve software elements and non-software elements that function together to provide a tangible product’s essential functionality). ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). termination-. and the reasons that they do not qualify as separate units of accounting. Performance-. 605-25-50-1 The objective of the disclosure guidance in this Section is to provide both qualitative and quantitative information about a vendor’s revenue arrangements and about the significant judgments made about the application of this Subtopic and changes in those judgments or in the application of this Subtopic that may significantly affect the timing or amount of revenue recognition. The significant deliverables within the arrangements c. and methods used to determine selling price (whether vendor-specific objective evidence. a Delaware limited liability partnership and the U. A vendor shall disclose all of the following information by similar type of arrangement: a. if applicable g.Annual (12/10) Page 145 of 290 resulting from Update 2009-13). 605-25-50-2. A discussion of the significant factors. The general timing of revenue recognition for significant units of accounting h.S. thirdparty evidence. For arrangements that were entered into or materially modified after the effective date of the pending content that links to this paragraph. the disclosures in paragraphs 250-10-50-1 through 50-3 (in this checklist) shall be provided. cancellation-. the amount of revenue recognized in the reporting period and the amount of deferred revenue as of the end of the period from applying the guidance in the pending content that links to this paragraph. .Accounting Disclosure Checklist . inputs. in addition to the required disclosures. The nature of its multiple-deliverable arrangements b. assumptions. A vendor may elect. e. a Swiss entity. but is not required. Whether the significant deliverables in the arrangements qualify as separate units of accounting. The general timing of delivery or performance of service for the deliverables within the arrangements d. or estimated selling price) for the significant deliverables f. All rights reserved. the effect of changes in either the selling price or the method or assumptions used to determine selling price for a specific unit of accounting if either one of those changes has a significant effect on the allocation of arrangement consideration. a vendor shall also disclose other qualitative and quantitative information as necessary to comply with this objective. and refund-type provisions e. If a vendor elects retrospective application.

If a vendor elects earlier application and the period of adoption is not the first reporting period in the vendor’s fiscal year. Although the milestone method is an accounting policy election. provided certain criteria are met. The factors that the entity considered in determining whether the milestone or milestones are substantive The amount of consideration recognized during the period for the milestone or milestones ©2010 KPMG LLP. The effect of the change for the appropriate captions presented. A determination of whether each milestone is considered substantive d. Income before income taxes c. a Swiss entity. a Delaware limited liability partnership and the U. Entities can make an accounting policy election to recognize arrangement consideration received for achieving specified performance measures during the period in which the milestones are achieved.Accounting Disclosure Checklist .. other methods that would result in recognizing a milestone in its entirety during the period it was achieved would not be acceptable for milestones if the criteria are not met. An entity shall disclose its accounting policy for the recognition of milestone payments as revenue in accordance with Subtopic 235-10. Earnings per share e. ASU 2010-17 should be applied prospectively to milestones achieved in fiscal years. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The transitions disclosures in paragraphs 250-10-50-1 through 50-3 (in this checklist) are required. All rights reserved. e. The milestone method should not be applied to transactions within the scope of other authoritative literature on revenue recognition (e.g.Annual (12/10) Page 146 of 290 72 Subtopic 605-28: Revenue Recognition—Milestone Method (after adoption of ASU 2010-17) ASU 2010-17 provides guidance on applying the milestone method to milestone payments for achieving specified performance measures when those payments are related to uncertain future events. . construction contract accounting under ASC Subtopic 605-35). vendors shall disclose the following information at a minimum for all previously reported interim periods in the fiscal year of adoption: a. Net income d. the pending content that links to this paragraph shall be applied through retrospective application from the beginning of the vendor’s fiscal year. Alternatively. a vendor may elect to adopt this ASU on a retrospective basis in accordance with Topic 250. A description of the overall arrangement b. The scope of this ASU is limited to transactions involving research or development if the milestone payment is to be recognized in its entirety in the period the milestone is achieved. an entity shall disclose all of the following in the notes to financial statements: a. 2010. In those circumstances. Revenue b. and interim periods within those years. A description of each milestone and related contingent consideration c. The disclosure requirements are as follows: 605-28-50-1. For each arrangement that includes milestone consideration accounted for in accordance with the guidance in this Subtopic.S. 605-28-50-2. Early adoption is permitted. beginning on or after June 15.

in which case the provisions may be deducted from the related accumulated costs. All rights reserved. > Percentage-of-Completion Method 605-35-50-2. An entity using the percentage-of-completion method shall disclose the method or methods (for example. . ©2010 KPMG LLP. and billings exceed costs on others. in most cases as a current liability. Liabilities. and that the item on the liability side be described as billings on uncompleted contracts in excess of related costs. except in circumstances in which related costs are accumulated on the balance sheet. In a classified balance sheet. Provisions for losses on contracts shall be shown separately as liabilities on the balance sheet. a provision shown as a liability shall be shown as a current liability. may include billings in excess of costs and recognized income with respect to other contracts. An entity that departs from use of the percentage-of-completion method as its basic accounting policy in the circumstances described in paragraph 605-3525-61 shall disclose such a departure from the basic policy. Disclosure > Accounting Policy 605-35-50-1. Under the percentage-of-completion method current assets may include costs and recognized income not yet billed. if applicable. if significant. with respect to certain contracts. If costs exceed billings on some contracts.S. When the completed-contract method is used.Annual (12/10) Page 147 of 290 73 Subtopic 605-35: Revenue Recognition—Construction-Type and Production-Type Contracts Presentation > Provisions for Anticipated Losses on Contracts 605-35-45-1. > Percentage-of-Completion Method 605-35-45-3. 605-35-45-5. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). and those on the liability side include only those on which billings exceed costs. Unless the provision is material in amount or unusual or infrequent in nature. and an excess of accumulated billings over related costs shall be shown among the liabilities. 605-35-45-2. a Delaware limited liability partnership and the U. the contracts shall ordinarily be segregated so that the figures on the asset side include only those contracts on which costs exceed billings. it shall be shown as a component of the cost included in the computation of gross profit. an excess of accumulated costs over related billings shall be shown in the balance sheet as a current asset. in most cases current liabilities. In accordance with the requirements of Section 235-10-50.(in this checklist) a contractor shall disclose in the note on accounting policies the method or methods of determining earned revenue and the cost of earned revenue including the policies relating to combining and segmenting. cost to cost. which is a function of contract price. a Swiss entity.Accounting Disclosure Checklist . not cost. 605-35-50-3. If it is shown separately. It is suggested that the asset item be described as costs of uncompleted contracts in excess of related billings rather than as inventory or work in process. > Completed Contract Method 605-35-45-4. the provision shall not be shown separately in the income statement. A provision for loss shall be presented in the income statement as an additional contract cost rather than as a reduction of contract revenue. labor hours) of measuring extent of progress toward completion.

74 Subtopic 605-40: Revenue Recognition—Gains and Losses Presentation > General 605-40-45-1. Although estimating is a continuous and normal process for contractors. If that practice is followed. a Swiss entity. paragraph 250-10-50-4 (in this checklist) requires disclosure of the effect of revisions if the effect is material. > Revisions of Estimates 605-35-50-9. > Commitments to Complete Contracts in Process 605-35-50-11. a contingent asset shall be disclosed in accordance with paragraph 450-30-50-1 (in this checklist). Events occurring after the date of the financial statements that are outside the normal exposure and risk aspects of the contract shall not be considered refinements of the estimating process of the prior year but should be disclosed as subsequent events. 605-35-50-10.Annual (12/10) Page 148 of 290 > Completed-Contract Method 605-35-50-4. the amounts shall be disclosed in the notes to financial statements. a practice such as recording revenues from claims only when the amounts have been received or awarded may be used. . The amounts of claim revenue recorded shall be disclosed in the notes to financial statements. a Delaware limited liability partnership and the U.U. 605-35-50-7.Accounting Disclosure Checklist . SEC Guidance > Gain Recognition on the Sale of a Business or Operating Assets to a Highly Leveraged Entity 1 SAB Topic 5.S. The specific criteria used to determine when a contract is substantially completed shall be followed consistently and shall be disclosed in the note on accounting policies. Generally commitments to complete contracts in process are in the ordinary course of a contractor's business and are not required to be disclosed in a statement of financial position. Gain or loss resulting from an involuntary conversion of a nonmonetary asset to monetary assets shall be classified in accordance with the provisions of Subtopic 225-20. the staff believes that the amount of any deferred gain (including deferral of interest or dividend income on securities received) should ©2010 KPMG LLP. 605-35-50-8. 605-35-50-5. in special cases disclosures of extraordinary commitments may be required. > Contract Claims 605-35-50-6. If the requirements in paragraph 605-35-25-31 are not met or if those requirements are met but the claim exceeds the recorded contract costs. As indicated in paragraph 605-35-25-31. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). However. If a gain on the sale of a business or operating assets is deferred under the guidance in this SAB. An entity that departs from use of the completed-contract method as its basic accounting policy in the circumstances described in paragraph 605-35-25-95 shall disclose such a departure. All rights reserved.

. 605-45-45-21. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Annual (12/10) Page 149 of 290 be disclosed on the face of the balance sheet as a deduction from the related asset account (i. investment in NEWCO). > Reimbursements Received for Out-of-Pocket Expenses Incurred 605-45-45-23. The footnotes to the financial statements should include a complete description of the transaction. they shall not be characterized as revenues (a description such as gross billings may be appropriate). the terms of the securities received. and the accounting treatment of amounts due thereon. the amount billed to the customer less the amount paid to a supplier) because it has earned a commission or fee as an agent. All rights reserved. > Shipping and Handling Fees and Costs 605-45-45-20. However. a Delaware limited liability partnership and the U. (This does not apply to the disclosure of taxes collected and remitted to governmental authorities. SAB Topic 5.. The gross amount billed to a customer because it has earned revenue (as a principal) from the sale of the goods or services b. Disclosure > Gross Transaction Volumes 605-45-50-1. It is a matter of judgment whether an entity should report revenue based on either of the following: a. a Swiss entity. netted against shipping and handling revenues).S. nor shall they be reported in a column that sums to net income or loss. For those entities that determine under the indicators listed in paragraphs 605-45-45-4 through 45-18 that shipping and handling fees shall be reported gross. Such disclosure can be made parenthetically in the income statement or in the notes to the financial statements. Voluntary disclosure of gross transaction volume for those revenues reported net may be useful to users of financial statements. all amounts billed to a customer in a sale transaction related to shipping and handling represent revenues earned for the goods provided and shall be classified as revenue. e. The net amount retained (that is.U.) > Shipping and Handling Fees and Costs 605-45-50-2. 605-45-45-2. including the existence of any commitments and contingencies. see paragraphs 605-45-50-3 through 50-4 in this checklist.Accounting Disclosure Checklist . Shipping and handling costs shall not be deducted from revenues (that is. The classification of shipping and handling costs is an accounting policy ©2010 KPMG LLP. 2 75 Subtopic 605-45: Revenue Recognition—Principal Agent Considerations Presentation > Overall Considerations of Reporting Revenue Gross as a Principal versus Net as an Agent 605-45-45-1. if gross amounts are disclosed on the face of the income statement. Reimbursements received for out-of-pocket expenses incurred shall be characterized as revenue in the income statement. The factors or indicators set forth in Section 605-45-45 shall be considered in that evaluation.

Disclosure > Service Provider's Accounting for Consideration Given to a Manufacturer or Reseller of Equipment 605-50-50-1. Cross-references to the applicable guidance are included below. 76 Subtopic 605-50: Revenue Recognition—Customer Payments and Incentives Note: FASB ASC Section 605-50-45 includes guidance on a vendor’s characterization of consideration given to a customer. . If shipping costs or handling costs are significant and are not included in cost of sales (that is.Accounting Disclosure Checklist . All rights reserved. > Taxes Collected from Customers and Remitted to Governmental Authorities 605-45-50-3. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Entities shall disclose the nature of the incentive programs and the amounts recognized in the statement of operations for those incentive programs and their related classification for each period presented. if those costs are accounted for together or separately on other income statement line items). an entity shall disclose the amounts of those taxes in interim and annual financial statements for each period for which an income statement is presented if those amounts are significant. 77 Subtopic 710-10: Compensation—General--Overall > Compensated Absences ©2010 KPMG LLP. The presentation of taxes within the scope of this Subtopic on either a gross basis (included in revenues and costs) or a net basis (excluded from revenues) is an accounting policy decision that shall be disclosed pursuant to Topic 235. 605-45-50-4.Annual (12/10) Page 150 of 290 decision that shall be disclosed pursuant to Topic 235. a customer’s characterization of consideration received from a vendor. > Vendor's Income Statement Characterization of Consideration Given to a Customer (Including a Reseller) See guidance in paragraphs 605-50-45-1 through 45-5. if significant. For any such taxes that are reported on a gross basis. a Swiss entity. As it relates to consideration given by a vendor to a customer the SEC staff believes that the expense associated with a "free" product or service delivered at the time of sale of another product or service should be classified as cost of sales. a Delaware limited liability partnership and the U.S. An entity may adopt a policy of including shipping and handling costs in cost of sales. an entity shall disclose both the amount of such costs and the line item or items on the income statement that include them. SEC Guidance > Accounting by a Customer (Including Reseller) for Certain Consideration Received from a Vendor 1 SEC Observer Comment. The disclosure of those taxes can be done on an aggregate basis. and related matters. > > Characterization of Revenue Reductions that Result in Negative Revenue See guidance in paragraphs 605-50-45-6 through 45-11.

BPT is assessed on certain financial institutions that award a bonus or other relevant compensation in excess of £25. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).S. If an obligation for other postemployment benefits is not accrued in accordance with paragraphs 450-20-25-2 or 710-10-25-1 only because the amount cannot be reasonably estimated. a Delaware limited liability partnership and the U. The current portion (determined on a plan-by-plan basis) is the amount by which the actuarial present value of ©2010 KPMG LLP. at a rate of 50% of the excess of the bonus over £25. and 715-60) That Applies to Both Public and Nonpublic Entities Note: The content in this Subtopic has been updated for FSP FAS 132(R)-1. the financial statements shall disclose that fact. a Swiss entity.K.000 to an individual employee between December 9. see paragraph 715-20-50-1 (in this checklist).000 per employee. 79 Pension and Other Postretirement Benefits Guidance (Subtopics 715-20. showing separately the assets and current and noncurrent liabilities recognized. All rights reserved. bank payroll tax (BPT). If material. An employer that sponsors one or more defined benefit pension plans or one or more defined benefit other postretirement plans shall provide separately for pension plans and other postretirement benefit plans the funded status of the plans and the amounts recognized in the statement of financial position.Annual (12/10) Page 151 of 290 710-10-50-1. 715-20-45-3. U. Employers’ Disclosures about Postretirement Benefit Plan Assets. comparative disclosures are not required for 2008 income statements). that fact shall be disclosed.Accounting Disclosure Checklist . Upon initial application. Presentation > Classification 715-20-45-2. If an employer meets the conditions for recognizing a liability for compensated absences in paragraph 710-10-25-1(a) through (c) and does not accrue a liability because the amount cannot be reasonably estimated. which is effective for fiscal years ending after December 15. For guidance on disclosure requirements related to special and contractual termination benefits.e. a noncurrent liability. 2010. the new disclosure requirements of this FSP are not required for earlier periods that are presented for comparative purposes (i. 2009. BPT should be presented in the income statement as an expense from continuing operations.K. The U. which was enacted in April 2010 and was due in August 2010. . disclose the effect of the U. 2009 and April 5. or a combination of both. not as income tax expense. 715-30. An employer that presents a classified statement of financial position shall classify the liability for an underfunded plan as a current liability. 78 Subtopic 712-10: Compensation—Nonretirement Postemployment Benefits--Overall > Termination Benefits 712-10-50-1. KPMG & Other Guidance 1. > Other Postemployment Benefits 712-10-50-2.K.

disclosure of the beginning and more recently assumed rate. A U. reporting entity may combine disclosures about pension plans or other postretirement benefit plans outside the United States with those for U. 715-20-50-3. generally accepted accounting principles (GAAP) shall apply the preceding guidance to its domestic and foreign plans. > Disclosures Related to Japanese Governmental Settlement Transactions 715-20-50-10. the disclosed rate is the rate determined as of the beginning of the year. and. > Disclosure 715-20-50-2.S. therefore. The disclosures required by this Subtopic shall be aggregated for all of an employer’s defined benefit pension plans and for all of an employer’s other defined benefit postretirement plans unless disaggregating in groups is considered to provide useful information or is otherwise required by the following paragraph and paragraph 715-20-50-4 (in this checklist). a Swiss entity. plans unless the benefit obligations of the plans outside the United States are significant relative to the total benefit obligation and those plans use significantly different assumptions. The asset for an overfunded plan shall be classified as a noncurrent asset in a classified statement of financial position. All rights reserved. 715-20-50-4.S. > Disclosures Related to Expected Rate of Return on Plan Assets 715-20-50-8. or operating cycle if longer. . an employer shall disclose both of the following: a) The aggregate benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets as of the measurement date of each statement of financial position presented b) The aggregate pension accumulated benefit obligation and aggregate fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets.Annual (12/10) Page 152 of 290 benefits included in the benefit obligation payable in the next 12 months.Accounting Disclosure Checklist . or a properly weighted combination of the two. exceeds the fair value of plan assets. However. The same aggregation is permitted for other postretirement benefit plans.S. If aggregate disclosures are presented. The amount classified as a current liability is limited to the amount of the plan’s unfunded status recognized in the employer’s statement of financial position. in the absence of a subsequent interim measurement of both pension or other postretirement plan assets and obligations (see paragraph 715-30-35-68). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). shall be made.S. Disclosures about pension plans with assets in excess of the accumulated benefit obligation generally may be aggregated with disclosures about pension plans with accumulated benefit obligations in excess of assets. The required disclosures for the separation of the substitutional portion of the benefit obligation from the corporate portion of the benefit obligation in a Japanese Employee Pension Fund arrangement and the transfer of the substitutional portion and related assets to the Japanese government pursuant to ©2010 KPMG LLP. A foreign reporting entity that prepares financial statements in conformity with U. a Delaware limited liability partnership and the U. The weighted-average expected long-term rate of return on plan assets is used to determine net benefit cost. if that rate changes because of a subsequent interim measurement of both pension or other postretirement plan assets and obligations.

to ensure proper disclosures related to this uncertainty are included in the financial statements. These provisions are effective six months after the date of enactment (i.200 for individuals or $27.. shall be disclosed separately as a subsidy from the government pursuant to applicable GAAP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). and 715-60) That Applies to Public Entities Only Disclosure 715-20-50-1. Excise tax on high cost coverage. third quarter for calendar year-end companies). Inflation-adjusted fees equal to $2 per person covered by a policy per year of coverage will be imposed on each individual policy provided by a company. If the combined effects are significant. b) The derecognition of previously accrued salary progression at the time of settlement. . > Impact of 2010 Health Care Legislation on OPEB Plan Measurements 2 There are several provisions of the 2010 health care legislation that could affect a company’s measurement of its OPEB obligations. b. The thresholds to which the tax applies are those plan costs that exceed $10.Accounting Disclosure Checklist . All rights reserved. 80 Pension and Other Postretirement Benefit Guidance (Subtopics 715-20. a measurement would not be necessary until the next required measurement (yearend or upon a significant event such as a curtailment.500 for families and are indexed for inflation thereafter. shall be disclosed separately from the government subsidy. There are contrary legal findings regarding the legality of cash balance pension plans. If not significant. determined pursuant to the government formula. a measurement of the OPEB obligation may be necessary as of the enactment date (March 2010) under current accounting guidance. KPMG & Other Guidance > Cash Balance Plans 1. Contingencies—Loss Contingencies. Entities that sponsor cash balance plans should consider ASC Subtopic 450-20. 715-30. settlement. Governmental entities generally are not excluded from this fee. KARG 126.Annual (12/10) Page 153 of 290 the June 2001 Japanese Welfare Pension Insurance Law amendment are as follows: a) The difference between the obligation settled and the assets transferred to the government.313. Fees for insured and self-insured health plans. a Swiss entity. and ASC Subtopic 275-10.S. or a plan amendment).066. A 40% excise tax will be imposed on high cost health care plans beginning in 2018. Protections to consumers such as eliminating lifetime or annual limits of coverage and providing coverage for preventive health services may increase estimates of per capita costs for plan participants. c. An employer that sponsors one or more defined benefit pension plans or one or more defined benefit other postretirement plans shall provide the following ©2010 KPMG LLP. a Delaware limited liability partnership and the U. These provisions include: a. KARG 123. pursuant to this consensus.e. Risks and Uncertainties—General. Health care reforms.

b. the effects during the period attributable to each of the following: 1 2 3 4 5 6 7 8 Actual return on plan assets Foreign currency exchange rate changes (see (a)(5)) Contributions by the employer Contributions by plan participants Benefits paid Business combinations Divestitures Settlements. All of the following shall be disclosed: a. Amounts related to the employer’s results of operations shall be disclosed for each period for which a statement of income is presented. All rights reserved.S. the effects during the period attributable to each of the following: 1 2 3 4 5 Service cost Interest cost Contributions by plan participants Actuarial gains and losses Foreign currency exchange rate changes (The effects of foreign currency exchange rate changes that are to be disclosed are those applicable to plans of a foreign operation whose functional currency is not the reporting currency pursuant to Section 830-10-45. . a Swiss entity. A reconciliation of beginning and ending balances of the benefit obligation showing separately. if applicable.) Benefits paid Plan amendments Business combinations Divestitures 6 7 8 9 10 Curtailments. For defined benefit pension plans. ©2010 KPMG LLP. separately for pension plans and other postretirement benefit plans.Accounting Disclosure Checklist . and special and contractual termination benefits. For defined benefit other postretirement plans. the benefit obligation is the projected benefit obligation. a Delaware limited liability partnership and the U. A reconciliation of beginning and ending balances of the fair value of plan assets showing separately. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Amounts related to the employer’s statement of financial position shall be disclosed as of the date of each statement of financial position presented. the benefit obligation is the accumulated postretirement benefit obligation. if applicable.Annual (12/10) Page 154 of 290 information. settlements.

The fair value of each class of plan assets as of each date for which a statement of financial position is presented. and real estate. showing separately the assets and current and noncurrent liabilities recognized. interest rate contracts. state. An employer should consider the overall objectives in paragraph 715-20-50-1(d)(1) through (5) in determining whether additional classes of plan assets or further disaggregation of classes should be disclosed. For investment funds disclosed as classes as described in (ii) below. The funded status of the plans and the amounts recognized in the statement of financial position. for example. permitted and prohibited investments including the use of derivatives. a description of the significant investment strategies of those funds shall be provided. and other contracts). and other factors that are pertinent to an understanding of those policies and strategies such as investment goals. corporate debt securities. The objectives of the disclosures about postretirement benefit plan assets are to provide users of financial statements with an understanding of: 1 2 3 4 5 How investment allocation decisions are made.Annual (12/10) Page 155 of 290 c. An employer shall consider those overall objectives in providing the following information about plan assets: i A narrative description of investment policies and strategies. Asset classes shall be based on the nature and risks of assets in an employer’s plan(s). a Delaware limited liability partnership and the U. diversification. see paragraph 820-10-50-2A. commodity contracts. including the factors that are pertinent to an understanding of investment policies and strategies The classes of plan assets The inputs and valuation techniques used to measure the fair value of plan assets The effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period Significant concentrations of risk within plan assets. or investment objective). as of the latest statement of financial position presented (on a weighted-average basis for employers with more than one plan). and the relationship between plan assets and benefit obligations. d. equity securities (segregated by industry type.Accounting Disclosure Checklist . a Swiss entity. including target allocation percentages or range of percentages considering the classes of plan assets disclosed pursuant to (ii) below. and local governments. foreign exchange contracts. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . but are not limited to.S. the following: cash and cash equivalents. credit contracts. investment funds (segregated by type of fund). Those examples are not meant to be all inclusive. asset-backed securities. derivatives on a gross basis (segregated by type of underlying risk in the contract. company size. ii iii A narrative description of the basis used to determine the overall ©2010 KPMG LLP. Examples of classes of assets could include. All rights reserved. risk management practices. equity contracts. structured debt. debt securities issued by national. For additional guidance on determining appropriate classes of plan assets.

The employer’s best estimate. To meet those objectives. b. an employer shall disclose the effect of the measurements on changes in plan assets for the period. a Swiss entity. and significant unobservable inputs (Level 3). . g. and settlements. as soon as it can reasonably be determined. significant other observable inputs (Level 2). transfers due to changes in the observability of significant inputs) 2 3 c. a reconciliation of the beginning and ending balances. f.Accounting Disclosure Checklist . separately presenting changes during the period attributable to the following: 1 Actual Return on Plan Assets (Component of Net Periodic Postretirement Benefit Cost) or Actual Return on Plan Assets (Component of Net Periodic Pension Cost). For fair value measurements of plan assets using significant unobservable inputs (Level 3). e. and in the aggregate for the five fiscal years thereafter. a Delaware limited liability partnership and the U. such as the general approach used. The description should consider the classes of assets as described in (ii) above. the extent to which the overall rate-of-returnon-assets assumption was based on historical returns. as appropriate. For fair value measurements using significant observable inputs. the accumulated benefit obligation. during the period. The guidance in paragraph 820-10-35-37 is applicable. the extent to which adjustments were made to those historical returns in order to reflect expectations of future returns. net Transfers in and/or out of Level 3 (for example. All rights reserved. The expected benefits shall be estimated based on the same assumptions used to measure the entity's benefit obligation at the end of the year and shall include benefits attributable to estimated future employee service. and how those adjustments were determined. separately identifying the amount related to assets still held at the reporting date and the amount related to assets sold during the period Purchases. iv Information that enables users of financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the reporting date. For defined benefit pension plans. The level within the fair value hierarchy in which the fair value measurements in their entirety fall. segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1).S. if any. Information about the valuation technique(s) and inputs used to measure fair value and a discussion of changes in valuation techniques and inputs. the employer shall disclose the following information for each class of plan assets disclosed pursuant to (ii) above for each annual period: a. sales. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). of contributions expected to be paid to the plan during the next fiscal year ©2010 KPMG LLP.Annual (12/10) Page 156 of 290 expected long-term rate-of-return-on-assets assumption. The benefits (as of the date of the latest statement of financial position presented) expected to be paid in each of the next five fiscal years.

as those amounts. All rights reserved. 715-30-35-21. The service cost component The interest cost component The expected return on plan assets for the period The gain or loss component The prior service cost or credit component The transition asset or obligation component The gain or loss recognized due to settlements or curtailments. Assumed discount rates (see paragraph 715-30-35-45 for a discussion of representationally faithful disclosure) Rates of compensation increase (for pay-related plans) Expected long-term rates of return on plan assets. specifying in a tabular format. The amount of net benefit cost recognized. and a general description of the direction and pattern of change in the assumed trend rates thereafter. The assumed health care cost trend rate(s) for the next year used to measure the expected cost of benefits covered by the plan (gross eligible charges).Accounting Disclosure Checklist . together with the ultimate trend rate(s) and when that rate is expected to be achieved. j. the net gain or loss and net prior service cost or credit recognized in other comprehensive income for the period pursuant to paragraphs 715-3035-11. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). including amortization of the net transition asset or obligation. and net transition asset or obligation. a Delaware limited liability partnership and the U. and reclassification adjustments of other comprehensive income for the period.S. ©2010 KPMG LLP. Separately. . the assumptions used to determine the benefit obligation and the assumptions used to determine net benefit cost: 1 2 3 l. and 715-60-35-25. k. showing separately the net gain or loss. net prior service cost or credit. all of the following assumptions used in the accounting for the plans. Estimated contributions may be presented in the aggregate combining all of the following: 1 2 3 Contributions required by funding regulations or laws Discretionary contributions Noncash contributions. h.Annual (12/10) Page 157 of 290 beginning after the date of the latest statement of financial position presented. 715-60-35-16. On a weighted-average basis. showing separately all of the following: 1 2 3 4 5 6 7 i. are recognized as components of net periodic benefit cost. The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost. a Swiss entity.

If applicable.Accounting Disclosure Checklist . a Delaware limited liability partnership and the U. An explanation of any significant change in the benefit obligation or plan assets not otherwise apparent in the other disclosures required by this Subtopic. used as the basis for accounting for the benefit obligation. an entity has the option of determining whether the vested benefit obligation for a defined benefit pension plan is the actuarial present value of the vested benefits to which the employee is entitled if the employee separates immediately or the actuarial present value of the vested benefits to which the ©2010 KPMG LLP. p. the amounts and types of securities of the employer and related parties included in plan assets.S. such as past practice or a history of regular benefit increases.Annual (12/10) Page 158 of 290 m. “Determination of Vested Benefit Obligation for a Defined Benefit Pension Plan”: Under the guidance in paragraph 715-30-35-41. Measuring the sensitivity of the accumulated postretirement benefit obligation and the combined service and interest cost components to a change in the assumed health care cost trend rates requires remeasuring the accumulated postretirement benefit obligation as of the beginning and end of the year. 88-1. . or operating cycle if longer. the cost of providing special or contractual termination benefits recognized during the period and a description of the nature of the event. s. and any significant transactions between the employer or related parties and the plan during the period. showing separately the net gain or loss. the approximate amount of future annual benefits of plan participants covered by insurance contracts. If applicable. any alternative method used to amortize prior service amounts or net gains and losses pursuant to paragraphs 715-30-35-13 and 715-30-3525 or 715-60-35-18 and 715-60-35-31. The effect of a one-percentage-point increase and the effect of a onepercentage-point decrease in the assumed health care cost trend rates on the aggregate of the service and interest cost components of net periodic postretirement health care benefit costs and the accumulated postretirement benefit obligation for health care benefits. The amount and timing of any plan assets expected to be returned to the employer during the 12-month period. q. (For purposes of this disclosure. all other assumptions shall be held constant. that follows the most recent annual statement of financial position presented. The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the fiscal year that follows the most recent annual statement of financial position presented. r.) n. and the effects shall be measured based on the substantive plan that is the basis for the accounting. t. and net transition asset or obligation. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). o. any substantive commitment. SEC Guidance > Determination of Vested Benefit Obligation for a Defined Benefit Pension Plan 1 SEC Observer Comment on EITF Issue No. net prior service cost or credit. All rights reserved. If applicable. a Swiss entity. If applicable. including annuity contracts issued by the employer or related parties.

separately for pension plans and other postretirement benefit plans. The objectives of the disclosures about postretirement benefit plan assets are to provide users of financial statements with an understanding of: 1 2 3 How investment allocation decisions are made. . and 715-60) That Applies to Nonpublic Entities Only Disclosure 715-20-50-5. a) The specific source data used to support the discount rate. The benefit obligation. ASC Topic 715. 715-20-50-1(h). how the registrant determined that the timing and amount of cash outflows related to the bonds included in the indices match its estimated defined benefit payments. footnote 18: The SEC staff would expect similar disclosures for employee termination benefits. c. A nonpublic entity is not required to disclose the information required by paragraphs 715-20-50-1(a) through (c). Amounts related to the employer’s results of operations shall be disclosed for each period for which a statement of income is presented. and 715-20-50-1(o) through (r) (all in this checklist). a Swiss entity. whether those costs have been recognized under ASC Topic 712. > Selection of Discount Rates 2 2005 SEC Staff Speeches: The following disclosures related to the selection of discount rates should be included either in the footnotes or in the critical accounting policies section of the MD&A. participant contributions. how the registrant adjusted for the difference.S. 715-30. including the factors that are pertinent to an understanding of investment policies and strategies The classes of plan assets The inputs and valuation techniques used to measure the fair value of plan ©2010 KPMG LLP. 715-20-50-1(m). If there are differences between the terms of the bonds and the terms of the benefit obligations. All rights reserved. The method used should be disclosed. and benefits paid. or ASC Topic 420-10.Annual (12/10) Page 159 of 290 employee is currently entitled but based on the employee's expected date of separation of retirement. Amounts related to the employer’s statement of financial position shall be disclosed as of the date of each statement of financial position presented. b. 81 Pension and Other Postretirement Benefit Guidance (Subtopics 715-20. A nonpublic entity that sponsors one or more defined benefit pension plans or one or more other defined benefit postretirement plans shall provide all of the following information. and funded status of the plan. > Termination Benefits 3 SAB Topic 5-P.Accounting Disclosure Checklist . b) If the discount rate is published long-term bond indices. a. fair value of plan assets. a Delaware limited liability partnership and the U. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Employer contributions.

Those examples are not meant to be all inclusive. a description of the significant investment strategies of those funds shall be provided. equity securities (segregated by industry type. ii. equity contracts. a Delaware limited liability partnership and the U. the following: cash and cash equivalents. the extent to which adjustments were made to those historical returns in order to reflect expectations of future returns. the extent to which the overall rate-of-returnon-assets assumption was based on historical returns. or investment objective). iii. Examples of classes include. Information that enables users of financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the reporting date. iv. The description should consider the classes of assets described in (ii) above. risk management practices. permitted and prohibited investments including the use of derivatives. but are not limited to. state. as of the latest statement of financial position presented (on a weighted-average basis for employers with more than one plan). debt securities issued by national. For fair value ©2010 KPMG LLP. The fair value of each class of plan assets as of each date for which a statement of financial position is presented. Asset class shall be based on the nature and risks of assets in an employer’s plan(s). such as the general approach used. A narrative description of the basis used to determine the overall expected long-term rate-of-return-on-assets assumption. and other contracts). interest rate contracts. company size. credit contracts. An employer should consider the overall objectives in paragraph 715-20-50-5(c)(1) through (5) (in this checklist) in determining whether additional classes of plan assets or further disaggregation of classes should be disclosed. An employer shall consider those overall objectives in providing the following information about plan assets: i. foreign exchange contracts. a Swiss entity. for example. and how those adjustments were determined. diversification. and the relationship between plan assets and benefit obligations. derivatives on a gross basis (segregated by type of underlying risk in the contract. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). including target allocation percentages or range of percentages considering the classes of plan assets disclosed pursuant to (ii) below. All rights reserved. commodity contracts. For investment funds disclosed as classes as described in (ii) below. corporate debt securities. A narrative description of investment policies and strategies. and real estate. and other factors that are pertinent to an understanding of those policies and strategies such as investment goals. and local governments. structured debt. asset-backed securities. .S. as appropriate.Annual (12/10) Page 160 of 290 assets 4 5 The effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period Significant concentrations of risk within plan assets. investment funds (segregated by type of fund).Accounting Disclosure Checklist .

e. Estimated contributions may be presented in the aggregate combining any of the following: 1 2 3 Contributions required by funding regulations or laws Discretionary contributions Noncash contributions. and settlements. significant other observable inputs (Level 2). separately presenting changes during the period attributable to the following: 1. The benefits (as of the date of the latest statement of financial position presented) expected to be paid in each of the next five fiscal years. Purchases. separately identifying the amount related to assets still held at the reporting date and the amount related to assets sold during the period 2. net 3. transfers due to changes in the observability of significant inputs) c. Information about the valuation technique(s) and inputs used to measure fair value and a discussion of changes in valuation techniques and inputs. d. ©2010 KPMG LLP. For fair value measurements of plan assets using significant unobservable inputs (Level 3). the accumulated benefit obligation. a reconciliation of the beginning and ending balances. The level within the fair value hierarchy in which the fair value measurements in their entirety fall. Transfers in and/or out of Level 3 (for example. .Accounting Disclosure Checklist . To meet those objectives. The guidance in paragraph 820-10-35-37 is applicable. of contributions expected to be paid to the plan during the next fiscal year beginning after the date of the latest statement of financial position presented. The expected benefits shall be estimated based on the same assumptions used to measure the entity's benefit obligation at the end of the year and shall include benefits attributable to estimated future employee service. the employer shall disclose the following information for each class of plan assets disclosed pursuant to (ii) above for each annual period: a. and significant unobservable inputs (Level 3). b. a Swiss entity. as soon as it can reasonably be determined. if any.Annual (12/10) Page 161 of 290 measurements using significant unobservable inputs. For defined benefit pension plans.S. and in the aggregate for the five fiscal years thereafter. segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1). an employer shall disclose the effect of the measurements on changes in plan assets for the period. The employer’s best estimate. Actual Return on Plan Assets (Component of Net Periodic Postretirement Benefit Cost) or Actual Return on Plan Assets (Component of Net Periodic Pension Cost). a Delaware limited liability partnership and the U. during the period. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). sales. All rights reserved. f.

showing separately the net gain or loss. combinations. n. k. the assumptions used to determine the benefit obligation and the assumptions used to determine net benefit cost: 1 2 3 Assumed discount rates (see paragraph 715-30-35-45 for a discussion of representationally faithful disclosure) Rates of compensation increase (for pay-related plans) Expected long-term rates of return on plan assets. such as amendments. On a weighted-average basis. If applicable. . and a general description of the direction and pattern of change in the assumed trend rates thereafter. net prior service cost or credit. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 715-30-35-21.S. ©2010 KPMG LLP. including amortization of the net transition asset or obligation. h. The nature and effect of significant nonroutine events. 715-60-35-16. or operating cycle if longer. together with the ultimate trend rate(s) and when that rate is expected to be achieved. All rights reserved. all of the following assumptions used in the accounting for the plans. Separately. The amount and timing of any plan assets expected to be returned to the employer during the 12-month period. the net gain or loss and net prior service cost or credit recognized in other comprehensive income for the period pursuant to paragraphs 715-3035-11. l. and net transition asset or obligation. and 715-60-35-25 and reclassification adjustments of other comprehensive income for the period. issued by the employer or related parties. divestitures. the approximate amount of future annual benefits of plan participants covered by insurance contracts. net prior service cost or credit. and any significant transactions between the employer or related parties and the plan during the period. The amounts recognized in the statements of financial position. as those amounts. j. The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost. are recognized as components of net periodic benefit cost. The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the fiscal year that follows the most recent annual statement of financial position presented. curtailments. a Swiss entity. including annuity contracts. The assumed health care cost trend rate(s) for the next year used to measure the expected cost of benefits covered by the plan (gross eligible charges). showing separately the net gain or loss. o. m. i.Accounting Disclosure Checklist . that follows the most recent annual statement of financial position presented. and settlements. and net transition asset or obligation. a Delaware limited liability partnership and the U.Annual (12/10) Page 162 of 290 g. specifying in a tabular format. the amounts and types of securities of the employer and related parties included in plan assets. showing separately the postretirement benefit assets and current and noncurrent postretirement benefit liabilities.

The amount of net periodic benefit cost recognized. . 82 Medicare Prescription Drug. Improvement. Reconciliation of beginning and ending balances of the benefit obligation. In interim and annual financial statements for the first period in which an employer includes the effects of the subsidy in measuring the accumulated postretirement benefit obligation and the first period in which an employer includes the effects of the subsidy in measuring net periodic postretirement benefit cost. Until an employer is able to determine whether benefits provided by its plan are actuarially equivalent. and separately the gross amount of the subsidy receipts (received and expected. b. This Subsection provides guidance on disclosures regarding the effect of the Medicare subsidy. a Delaware limited liability partnership and the U. Benefits (as of the date of the latest balance sheet presented) expected to be paid in each of the next five fiscal years. respectively). This Subsection also provides guidance on the disclosures about the effects of the subsidy for an employer that sponsors a postretirement health care benefit plan that provides prescription drug coverage but for which the employer has not yet been able to determine actuarial equivalency. All rights reserved. 715-60-50-4. it shall disclose both of the following in financial statements for interim or annual periods: a. a Swiss entity. and the resulting reduction in interest cost on the accumulated postretirement benefit obligation as a result of the subsidy. For purposes of the disclosures required by paragraphs 715-20-50-1(a) and 715-20-50-1(f) (both in this checklist). c. Improvement. respectively). b. [not used] q. it shall disclose all of the following: a. and in the aggregate for the five fiscal years thereafter. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).S.Accounting Disclosure Checklist . The existence of the Medicare Prescription Drug.Annual (12/10) Page 163 of 290 p. the reduction in current period service cost due to the subsidy. Disclosure of paragraphs 715-20-50-1(a) and 715-20-50-1(f) are required as follows: a. an employer shall disclose gross benefit payments (paid and expected. 715-60-50-6. 715-60-50-3. The reduction in the accumulated postretirement benefit obligation for the subsidy related to benefits attributed to past service. and Modernization Act Subsection of Subtopic 71560: Compensation—Retirement Benefits—Defined Benefit Plans—Other Postretirement Disclosure 715-60-50-2. and ©2010 KPMG LLP. Any other disclosures required by paragraph 715-20-50-1(r) (in this checklist). The effect of the subsidy on the measurement of net periodic postretirement benefit cost for the current period. That effect includes any amortization of the actuarial gain in (a) of this paragraph as a component of the net amortization called for by paragraphs 715-60-35-29 through 35-30. including prescription drug benefits.

84 Subtopic 715-80: Compensation—Retirement Benefits—Multiemployer Plans 715-30-35-70. they are in substance aggregations of single-employer plans combined to allow participating employers to pool their assets for investment purposes and to reduce the costs of plan administration. An employer may disclose total contributions to multiemployer plans without disaggregating the amounts attributable to pension plans and other postretirement benefit plans. a business combination. All rights reserved. a business combination. They may also have features that allow participating employers to have different benefit formulas. That measures of the accumulated postretirement benefit obligation or net periodic postretirement benefit cost do not reflect any amount associated with the subsidy because the employer is unable to conclude whether the benefits provided by the plan are actuarially equivalent to Medicare Part D under the Act. or a divestiture. Note: Some pension plans to which two or more unrelated employers contribute are not multiemployer plans. The disclosures shall include a description of the nature and effect of any changes affecting comparability. An employer would withdraw from the plan under circumstances that would give rise to an obligation ©2010 KPMG LLP. 715-80-50-2. An employer shall apply the provisions of Topic 450 if it is either probable or reasonably possible that either of the following would occur: a. a Delaware limited liability partnership and the U. Disclosure 715-80-50-1. such as a change in the rate of employer contributions. Rather.Annual (12/10) Page 164 of 290 Modernization Act b. An employer shall disclose the amount of cost recognized for defined contribution pension plans and for other defined contribution postretirement benefit plans for all periods presented separately from the amount of cost recognized for defined benefit plans. or a divestiture.S. a Swiss entity. Such plans shall be considered single-employer plans rather than multiemployer plans for purposes of both accounting and disclosure. The disclosures shall include a description of the nature and effect of any significant changes during the period affecting comparability. such as a change in the rate of employer contributions. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). with the employer's contributions to the plan based on the benefit formula selected by the employer.Accounting Disclosure Checklist . Those multiple-employer plans ordinarily do not involve collective-bargaining agreements. An employer shall disclose the amount of contributions to multiemployer plans for each annual period for which a statement of income is presented. . 83 Subtopic 715-70: Compensation—Retirement Benefits—Defined Contribution Plans Disclosure Disclosure 715-70-50-1.

Accounting Disclosure Checklist . Compensation – Stock Compensation. A nonpublic entity shall make [and disclose] a policy decision of whether to measure all of its liabilities incurred under share-based payment arrangements at fair value or to measure all such liabilities at intrinsic value. a Swiss entity. Note: The FASB recently issued Accounting Standards Update No. The ASU will not affect the accounting for instruments outside the scope of ASC Topic 718. includes any subsidiary of a public entity. The transition disclosures in paragraph 250-10-50-1 (in this checklist) are required. . An employee share-based payment with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trade should be considered an equity classified award assuming all other criteria for equity classification are met. a Delaware limited liability partnership and the U. The ASU requires a cumulative-effect adjustment to the opening balance of retained earnings for the impact of any outstanding awards as of the date of adoption. An employer's contribution to the fund would be increased during the remainder of the contract period to make up a shortfall in the funds necessary to maintain the negotiated level of benefit coverage (a maintenance of benefits clause). The nature and terms of such arrangements that existed during the period and the potential effects of those arrangements on shareholders b.S. 85 Subtopic 718-10: Compensation—Stock Compensation—Overall Note: A public entity in the context of ASC Topic 718. All rights reserved. An entity with one or more share-based payment arrangements shall disclose information that enables users of the financial statements to understand all of the following: a. 718-30-30-2. 2010-13. ASU 2010-13 is effective for annual and interim periods beginning on or after December 15. 718-10-50-1. The effect of compensation cost arising from share-based payment arrangements on the income statement ©2010 KPMG LLP. with early adoption permitted. multiple awards or (b) on a straight-line basis over the requisite service period for the entire award (that is. the exercise price of an employee stock option may be denominated in the currency of the market in which the underlying stock is traded. An entity shall make [and disclose] a policy decision about whether to recognize compensation cost for an award with only service conditions that has a graded vesting schedule (a) on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was. 2010. over the requisite service period of the last separately vesting portion of the award). Disclosure 718-10-35-8. Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades (EITF 09-J).Annual (12/10) Page 165 of 290 b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Under this ASU. insubstance.

or the fair value of the equity instruments granted (or offered to grant). for all of the following groups of equity instruments: ©2010 KPMG LLP.Annual (12/10) Page 166 of 290 c. an entity may need to disclose information beyond the following to achieve the disclosure objectives: a. 718-10-50-2. Those outstanding at the beginning of the year b. a Swiss entity. including the general terms of awards under the arrangement(s). such as: 1 2 3 The requisite service period(s) and any other substantive conditions (including those related to vesting) The maximum contractual term of equity (or liability) share options or similar instruments The number of shares authorized for awards of equity share options or other equity instruments. The number and weighted-average grant-date fair value (or calculated value for a nonpublic entity that uses that method or intrinsic value for awards measured pursuant to paragraph 718-10-30-21) of equity instruments not specified in c(1). All rights reserved. The method of estimating the fair value of the goods or services received. Those exercisable or convertible at the end of the year d. The cash flow effects resulting from share-based payment arrangements. In some circumstances. A description of the share-based payment arrangement(s). b. The method it uses for measuring compensation cost from share-based payment arrangements with employees. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Delaware limited liability partnership and the U. The following list indicates the minimum information needed to achieve the objectives in the preceding paragraph and illustrates how the disclosure requirements might be satisfied. during the period d. For the most recent year for which an income statement is provided. Those outstanding at the end of the year c. Those that during the year were: 1 2 3 4 2 Granted Exercised or converted Forfeited Expired. both of the following: 1 The number and weighted-average exercise prices (or conversion ratios) for each of the following groups of share options (or share units) (: a.Accounting Disclosure Checklist .S. . c. See Example 9 (paragraph 718-10-55-134 through 55-137) for an illustration of this guidance.

both of the following: 1 The number. . and weightedaverage remaining contractual term of options (or share units) currently exercisable (or convertible). For fully vested share options (or share units) and share options expected to vest at the date of the latest statement of financial position. The total intrinsic value of options exercised (or share units converted).Accounting Disclosure Checklist .Annual (12/10) Page 167 of 290 a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Those nonvested at the beginning of the year b. share-based liabilities paid. ©2010 KPMG LLP. and the total fair value of shares vested during the year.S. a Delaware limited liability partnership and the U. All rights reserved. and weightedaverage remaining contractual term of options (or share units) outstanding. both of the following: 1 The weighted-average grant-date fair value (or calculated value for a nonpublic entity that uses that method or intrinsic value for awards measured at that value pursuant to paragraphs 718-10-30-21 through 3022) of equity options or other equity instruments granted during the year. d. aggregate intrinsic value (except for nonpublic entities). including (if applicable): a. aggregate intrinsic value (except for nonpublic entities). A description of the significant assumptions used during the year to estimate the fair value (or calculated value) of share-based compensation awards. Those that during the year were: 1 2 3 Granted Vested Forfeited. 2 e. weighted-average exercise price (or conversion ratio). both of the following (An entity that uses the intrinsic value method pursuant to paragraphs 718-10-30-21 through 30-22 is not required to disclose the following information for awards accounted for under that method): 1 2 A description of the method used during the year to estimate the fair value (or calculated value) of awards under share-based payment arrangements. For each year for which an income statement is provided. Those nonvested at the end of the year c. Expected term of share options and similar instruments. 2 f. For each year for which an income statement is presented. a Swiss entity. weighted-average exercise price (or conversion ratio). The number. including a discussion of the method used to incorporate the contractual term of the instruments and employees’ expected exercise and postvesting employment termination behavior into the fair value (or calculated value) of the instrument.

c. Capitalized as part of the cost of an asset. d. including: a. The number of employees affected c. a Delaware limited liability partnership and the U. an entity that has multiple share-based payment arrangements with employees shall disclose information separately for different types of awards under those arrangements to the extent that differences in the characteristics of the awards make separate disclosure important to an understanding of the entity’s use of share-based compensation. h. An entity that grants equity or liability instruments under multiple share-based payment arrangements with employees shall provide the information specified in paragraph (a) through (f) separately for different types of awards to the extent that the differences in the characteristics of the awards make separate disclosure important to an understanding of the entity’s use of share-based compensation. the appropriate industry sector index that it has selected. An entity that uses a method that employs different volatilities during the contractual term shall disclose the range of expected volatilities used and the weighted-average expected volatility. e. Discount for post-vesting restrictions and the method for estimating it. and how it has calculated historical volatility using that index. the reasons for selecting that particular index. As of the latest balance sheet date presented.Annual (12/10) Page 168 of 290 b. g. .S. The terms of the modifications b. In addition. both of the following: 1 Total compensation cost for share-based payment arrangements a. Expected volatility of the entity’s shares and the method used to estimate it.Accounting Disclosure Checklist . the total compensation cost ©2010 KPMG LLP. For each year for which an income statement is presented. An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends. a Swiss entity. An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used. i. Expected dividends. The total incremental compensation cost resulting from the modifications. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 2 A description of significant modifications. Recognized in income as well as the total recognized tax benefit related thereto b. Risk-free rate(s). All rights reserved. A nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for it to estimate the expected volatility of its share price.

.Annual (12/10) Page 169 of 290 related to nonvested awards not yet recognized and the weighted-average period over which it is expected to be recognized j. The Practice Aid provides guidance on socalled “cheap stock” issues. new shares or treasury shares). provided that the supplemental information is reasonable and does not lessen the prominence and credibility of the information required by this Topic. Intrinsic value of outstanding vested and unvested options based on the estimated IPO price and the options outstanding as of the most recent balance ©2010 KPMG LLP. 718-10-50-4. the entity shall disclose an estimate of the amount (or a range. For each grant date. KPMG & Other Guidance 1 The AICPA Practice Aid Series (PAS) Valuation of Privately-Held Company Equity Securities Issues As Compensation discusses best practices for the valuation and disclosures about such transactions. Suggested disclosures for financial statements included in a registration statement for equity instruments granted during the 12-month period prior to the date of the most recent balance sheet included in a registration statement include: a. including the source of those shares (that is. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). In addition to the information required by this Topic. an entity expects to repurchase shares in the following annual period. such as a range of values calculated on the basis of different assumptions. b. the fair value of the shares and the intrinsic value. the amount of cash received from exercise of share options and similar instruments granted under share-based payment arrangements and the tax benefit realized from stock options exercised during the annual period k. The alternative assumptions shall be described to enable users of the financial statements to understand the basis for the supplemental information. for issuing shares upon share option exercise (or share unit conversion).g. If the valuation specialist was a related party. the amount of cash used to settle equity instruments granted under share-based payment arrangements l. If not separately disclosed elsewhere. The SEC staff has indicated that they would expect the suggested disclosures of the Practice Aid to be presented in IPO registration statements (KPMG’s Share-Based Payment: An Analysis of Statement 123(R). Suggested disclosures in MD&A: d. if more appropriate) of shares to be repurchased during that period. e. Whether the valuation of the equity instruments was contemporaneous or retrospective. if any. if any. the number of shares or options granted. A description of the entity’s policy.. a Swiss entity. If as a result of its policy. All rights reserved. If not separately disclosed elsewhere.Accounting Disclosure Checklist . ¶7. the exercise price. c.024). a statement of that fact. The Practice Aid should be considered in valuations of equity securities issued (1) by privately held entities as compensation as well as (2) for other than compensation purposes. of the options.S. a Delaware limited liability partnership and the U. in a business combination. an entity may disclose supplemental information that it believes would be useful to investors and creditors.

Question 5.D. . 86 Subtopic 718-10: Compensation—Stock Compensation—Overall—SEC Guidance > Disclosures Upon Becoming a Public Entity 1 SAB Topic 14. > Expected Volatility Assumptions 4 SAB Topic 14. SEC Staff views on disclosures pertaining to an entity’s assumption of expected volatility.B. ©2010 KPMG LLP. If a company elects to change the valuation technique or model used to value instruments with similar characteristics. assumptions. Critical Accounting Estimates. an entity should provide financial statement disclosure of the effects of the changes in accounting policy.Annual (12/10) Page 170 of 290 sheet date (year-end or interim) presented in the registration statement. a Delaware limited liability partnership and the U. The valuation alternative selected and the reason management chose not to obtain a contemporaneous valuation by an unrelated party. Give retroactive effect to a change in capital structure (i. e. Consider the applicability of SEC Release No. stock split. and methodologies used in the valuation.1. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). In subsequent filings. Question 4.e.C. stock dividend. All rights reserved. SEC Staff views on appropriate disclosures upon becoming a public entity in addition to those prescribed by paragraphs 718-10-50-1 through 50-4.S. b.. > Changes in Valuation Technique or Model Used to Value Instruments 2 SAB Topic 14. 3 2. disclose: 1 2 A description of the significant factors. Where a valuation was based on a retrospective valuation or a valuation by a related party. Question 3. the basis for change should be disclosed. A discussion of each significant factor contributing to the difference between the fair value at the grate date and (a) estimated IPO price or (b) if a contemporaneous valuation by an unrelated party was obtained after the grants but prior to the IPO. An entity should clearly describe in MD&A the change in accounting policy that will be required by Topic 718 in subsequent periods and the reasonably likely material future effects. the difference with that value. or reverse split) that occurs after the balance sheet date but before the release of financial statements. in SEC Release FR-72 regarding critical accounting policies and estimates in MD&A.C. An Interpretation of SAB Topic 4. a. a Swiss entity. Changes in assumptions used in valuation models during the periods presented in the financial statements should be disclosed in the footnotes. > Changes in Assumptions Used in Valuation Models 3 SAB Topic 14.Accounting Disclosure Checklist . FR-60 and Section V.D. a.

SAB Topic 14.D. or within MD&A. a Delaware limited liability partnership and the U. Consider disclosing the amount of expense related to share-based payment arrangements included in specific line items in the financial statements. > Classification of Compensation Expense Associated with Share-Based Payment Arrangements 6 SAB Topic 14. the use of the method b. All rights reserved.F. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the compensation cost recognized in the current period for previous awards that would have been recognized in previous periods had the policy required by Topic 718 been applied to awards granted prior to the adoption of Topic 718). 110. 7 > Nonsubstantive Vesting Periods 8 Subsequent to the adoption of ASC Topic 718.F. in the footnotes to the financial statements. on the cash flow statement. the reason why the method was used.Annual (12/10) Page 171 of 290 > Expected Term 5 SAB Topic 14. Accounting policy for recognizing compensation costs for such awards granted (a) after the adoption of Topic 718. The quantitative effect of the change in accounting policy for such awards as a result of the adoption of Topic 718 (i.Accounting Disclosure Checklist . a Swiss entity. to disclose the following information for all periods for which compensation cost is being recognized over the nonsubstantive nominal vesting period for awards granted prior to the adoption of Topic 718 (KPMG’s Share-Based Payment: An Analysis of Statement 123(R). Question 6. indicating that they will continue to accept the simplified method for estimating the expected term of a plain vanilla share option grant under specified conditions. the SEC staff expects registrants which.e. have reflected compensation cost over the nominal vesting period in situations when that period was nonsubstantive.S. 87 Subtopic 718-40: Compensation—Stock Compensation—Employee Stock Ownership Plans Presentation ©2010 KPMG LLP.2. prior to the adoption of Topic 718.022): a. b..¶7. Share-Based Payment. If a simplified method is used to estimate the expected life of options. The expense related to share-based payment arrangements should be presented in the same line or lines as cash compensation paid to the same employees. the periods for which the method was used if the method was not used in all periods The SEC issued SEC Staff Accounting Bulletin No. Disclosure of this information might be appropriate in a parenthetical note to the appropriate income statement line items. disclose: a. . the types of share option grants for which the method was used if the method was not used for all share option grants c. and (b) prior to the adoption of Topic 718.

Accounting Disclosure Checklist - Annual (12/10) Page 172 of 290 718-40-25-9 For purposes of applying this Subtopic, employee stock ownership plan debt is characterized as follows: a. Employers that sponsor an employee stock ownership plan with a direct loan shall report the obligations of the employee stock ownership plan to the outside lender as debt. Employers that sponsor an employee stock ownership plan with an indirect loan shall report outside loans as debt. Employers shall not report a loan receivable from the employee stock ownership plan as an asset and shall, therefore, not recognize interest income on such receivable. [omitted] Employers that sponsor an employee stock ownership plan with an employer loan shall not report the employee stock ownership plan's note payable and the employer's note receivable in the employer's balance sheet.

b.

c. d.

Disclosure 718-40-50-1. An employer sponsoring an employee stock ownership plan shall disclose all of the following information about the plan, if applicable: a. A description of the plan, the basis for determining contributions, including the employee groups covered, and the nature and effect of significant matters affecting comparability of information for all periods presented. For leveraged employee stock ownership plans and pension reversion employee stock ownership plans, the description shall include the basis for releasing shares and how dividends on allocated and unallocated shares are used. b. A description of the accounting policies followed for employee stock ownership plan transactions, including the method of measuring compensation, the classification of dividends on employee stock ownership plan shares, and the treatment of employee stock ownership plan shares for earnings per share (EPS) computations. If the employer has both old employee stock ownership plan shares for which it does not adopt the guidance in this Subtopic and new employee stock ownership plan shares for which the guidance in this Subtopic is required, the accounting policies for both blocks of shares shall be described. c. The amount of compensation cost recognized during the period. d. The number of allocated shares, committed-to-be-released shares, and suspense shares held by the employee stock ownership plan at the balancesheet date. This disclosure shall be made separately for shares accounted for under this Subtopic and for grandfathered employee stock ownership plan shares. e. The fair value of unearned employee stock ownership plan shares at the balance-sheet date for shares accounted for under this Subtopic. (Future tax deductions will be allowed only for the employee stock ownership plan’s cost of unearned employee stock ownership plan shares.) This disclosure need not be made for old employee stock ownership plan shares for which the
©2010 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Accounting Disclosure Checklist - Annual (12/10) Page 173 of 290 employer does not apply the guidance in this Subtopic. f. The existence and nature of any repurchase obligation, including disclosure of the fair value (see paragraph 718-40-30-4) of the shares allocated as of the balance sheet date, which are subject to a repurchase obligation.

g. The amount and treatment in the EPS computation of the tax benefit related to dividends paid to any employee stock ownership plan, if material.

88 Claims-Made Contracts Subsection of Subtopic 720-20: Other Expenses—Insurance Costs Disclosure 720-20-50-1. When an entity changes from occurrence-based insurance to claims-made insurance or elects to significantly reduce or eliminate its insurance coverage paragraphs 450-20-50-3 through 50-6 require disclosure if it is at least reasonably possible that a loss has been incurred. That paragraph also discusses disclosure with respect to unasserted claims.

89 Subtopic 720-35: Other Expenses—Advertising Costs Disclosure 720-35-50-1. The notes to financial statements shall disclose both of the following: a. The accounting policy selected from the two alternatives in paragraph 720-3525-1 for reporting advertising, indicating whether such costs are expensed as incurred or the first time the advertising takes place b. The total amount charged to advertising expense for each income statement presented. See disclosure requirements for capitalized advertising costs at 340-20-50-1 (in this checklist). 90 Subtopic 720-50: Other Expenses—Fees Paid to the Federal Government by Pharmaceutical Manufacturers Note: The recently enacted health care legislation imposes an annual fee on pharmaceutical manufacturers and importers that sell branded prescription drugs to specified government programs for each calendar year beginning after 2010. EITF 10-D, Other Expenses (Topic 720), Fees Paid to the Federal Government by Pharmaceutical Manufacturers, specifies that the liability for the fee should be estimated and recorded in full upon the first qualifying sale with a corresponding deferred cost that is amortized to expense using a straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. EITF 10-D is effective for calendar years beginning after December 31, 2010, when the fee initially becomes effective. Presentation
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Accounting Disclosure Checklist - Annual (12/10) Page 174 of 290 720-50-45-1 The annual fee described in paragraph 720-50-05-1 shall be presented as an operating expense. 91 Subtopic 730-10: Research and Development—Overall Disclosure 730-10-50-1. Disclosure shall be made in the financial statements of the total research and development costs charged to expense in each period for which an income statement is presented. Such disclosure shall include research and development costs incurred for a computer software product to be sold, leased, or otherwise marketed. KPMG & Other Guidance 1 An entity should consider whether to disclose its research and development activities under critical accounting policies based on FRR-60.

92 Subtopic 730-20: Research and Development—Research and Development Arrangements Disclosure 730-20-50-1. An entity that under the provisions of this Subtopic accounts for its obligation under a research and development arrangement as a contract to perform research and development for others shall disclose both of the following: a. The terms of significant agreements under the research and development arrangement (including royalty arrangements, purchase provisions, license agreements, and commitments to provide additional funding) as of the date of each balance sheet presented b. The amount of compensation earned and costs incurred under such contracts for each period for which an income statement is presented. 730-20-50-2. Topic 850 specifies additional disclosure requirements for related party transactions and certain control relationships. 730-20-50-3. An entity that is a party to more than one research and development arrangement need not separately disclose each arrangement unless separate disclosure is necessary to understand the effects on the financial statements. Aggregation of similar arrangements by type may be appropriate. 93 Income Taxes (Subtopics 740-10, 740-20, and 740-30) Overall Presentation > Statement of Financial Position Classification of Income Tax Accounts >> Deferred Tax Accounts 740-10-45-4. In a classified statement of financial position, an entity shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount.
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Accounting Disclosure Checklist - Annual (12/10) Page 175 of 290 Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. 740-10-45-5. The valuation allowance for a particular tax jurisdiction shall be allocated between current and noncurrent deferred tax assets for that tax jurisdiction on a pro rata basis. 740-10-45-6. For a particular tax-paying component of an entity and within a particular tax jurisdiction, all current deferred tax liabilities and assets shall be offset and presented as a single amount and all noncurrent deferred tax liabilities and assets shall be offset and presented as a single amount. However, an entity shall not offset deferred tax liabilities and assets attributable to different tax-paying components of the entity or to different tax jurisdictions. >>> Deferred Tax Accounts Not Related to an Asset or Liability 740-10-45-9. A deferred tax liability or asset that is not related to an asset or liability for financial reporting (see paragraphs 740-10-25-24 through 25-26), including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. > > Tax Accounts, Other than Deferred >>> Unrecognized Tax Benefits 740-10-45-11. An entity that presents a classified statement of financial position shall classify a liability associated with an unrecognized tax benefit as a current liability (or the amount of a net operating loss carryforward or amount refundable is reduced) to the extent the entity anticipates payment (or receipt) of cash within one year or the operating cycle, if longer. The liability for unrecognized tax benefits (or reduction in amounts refundable) shall not be combined with deferred tax liabilities or assets. 740-10-45-12. A tax position recognized in the financial statements as a result of applying the guidance on uncertain tax positions may also affect the tax bases of assets and liabilities and thereby change or create temporary differences. A liability recognized for an unrecognized tax benefit shall not be classified as a deferred tax liability unless it arises from a taxable temporary difference. >>> Offsetting 740-10-45-13. The offset of cash or other assets against the tax liability or other amounts owing to governmental bodies is not acceptable except as noted in paragraph 210-20-45-6 (in this checklist). > Income Statement Presentation of Certain Measurement Changes to Income Tax Accounts >> Changes in Tax Laws or Rates 740-10-45-15. When deferred tax accounts are adjusted as required by paragraph 74010-35-4 for the effect of a change in tax laws or rates, the effect shall be included in income from continuing operations for the period that includes the enactment date. >> Changes in the Tax Status of an Entity 740-10-45-19. When deferred tax accounts are recognized or derecognized as required by paragraphs 740-10-25-32 and 740-10-40-6 due to a change in tax status, the effect of recognizing or derecognizing the deferred tax liability or asset shall be
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Accounting Disclosure Checklist - Annual (12/10) Page 176 of 290 included in income from continuing operations. >> Changes that Impact the Valuation Allowance for Deferred Tax Assets See guidance in paragraphs 740-10-45-20 through 45-21. >> Changes Related to Assets Acquired Outside of a Business Combination See guidance in paragraphs 740-10-45-22 through 45-24. Disclosure > Statement of Financial Position Related Disclosures 740-10-50-2. The components of the net deferred tax liability or asset recognized in an entity's statement of financial position shall be disclosed as follows: a. The total of all deferred tax liabilities measured in paragraph 740-10-30-5(b) b. The total of all deferred tax assets measured in paragraph 740-10-30-5(c) through (d) c. The total valuation allowance recognized for deferred tax assets determined in paragraph 740-10-30-5(e). The net change during the year in the total valuation allowance also shall be disclosed. 740-10-50-3. An entity shall disclose both of the following: a. The amounts and expiration dates of operating loss and tax credit carryforwards for tax purposes b. Any portion of the valuation allowance for deferred tax assets for which subsequently recognized tax benefits will be credited directly to contributed capital (see paragraph 740-20-45-11). 740-10-50-4. In the event that a change in an entity's tax status becomes effective after year-end in Year 2 but before the financial statements for Year 1 are issued or are available to be issued (as discussed in Section 855-10-25), the entity's financial statements for Year 1 shall disclose the change in the entity's tax status for Year 2 and the effects of that change, if material. > > Public Entities 740-10-50-6. A public entity shall disclose the approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets (before allocation of valuation allowances). > > Nonpublic Entities 740-10-50-8. A nonpublic entity shall disclose the types of significant temporary differences and carryforwards but may omit disclosure of the tax effects of each type. > Income Statement Related Disclosures 740-10-50-9. The significant components of income tax expense attributable to continuing operations for each year presented shall be disclosed in the financial statements or notes thereto. Those components would include, for example: a. Current tax expense (or benefit) b. Deferred tax expense (or benefit) (exclusive of the effects of other components listed below)
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For example. Tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity g. A public entity shall disclose a reconciliation using percentages or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. [not used] c. The benefits of operating loss carryforwards f. > > All Entities 740-10-50-14. All entities shall disclose all of the following at the end of each annual reporting period presented: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). all entities shall disclose the nature and effect of any other significant matters affecting comparability of information for all periods presented.S. The statutory tax rates shall be the regular tax rates if there are alternative tax systems. A nonpublic entity shall disclose the nature of significant reconciling items but may omit a numerical reconciliation. Government grants (to the extent recognized as a reduction of income tax expense) e. All rights reserved. any acquisition-date income tax benefits or expenses recognized from changes in the acquirer's valuation allowance for its previously existing deferred tax assets as a result of a business combination (see paragraph 805-740-30-3). a Swiss entity. Investment tax credits d. The estimated amount and the nature of each significant reconciling item shall be disclosed. For positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date: 1 The nature of the uncertainty 2 The nature of the event that could occur in the next 12 months that would ©2010 KPMG LLP. If not otherwise evident from the disclosures required by this Section.Accounting Disclosure Checklist . .Annual (12/10) Page 177 of 290 c. Adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity h. [not used] b. The total amounts of interest and penalties recognized in the statement of operations and the total amounts of interest and penalties recognized in the statement of financial position d. Adjustments of the beginning-of-the-year balance of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. > > Nonpublic Entities 740-10-50-13. > Income Tax Expense Compared to Statutory Expectations > > Public Entities 740-10-50-12. a Delaware limited liability partnership and the U. > Unrecognized Tax Benefit Related Disclosures 740-10-50-15.

740-10-50-15A. a Swiss entity.S. > Entities with Separately Issued Financial Statements that Are Members of a Consolidated Tax Return 740-10-50-17. a Delaware limited liability partnership and the U. e. See Example 30 (paragraph 740-10-55-217) for an illustration of disclosures about uncertainty in income taxes. > Public Entities Not Subject to Income Taxes 740-10-50-16. Paragraph 740-10-25-46 identifies the deferral method and the flow©2010 KPMG LLP. . b. The aggregate amount of current and deferred tax expense for each statement of earnings presented and the amount of any tax-related balances due to or from affiliates as of the date of each statement of financial position presented b. would affect the effective tax rate. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). if recognized. > > Investment Tax Credit Recognition Policy 740-10-50-20. A description of tax years that remain subject to examination by major tax jurisdictions.Annual (12/10) Page 178 of 290 cause the change 3 An estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made. which shall include at a minimum: 1 The gross amounts of the increases and decreases in unrecognized tax benefits as a result of tax positions taken during a prior period 2 The gross amounts of increases and decreases in unrecognized tax benefits as a result of tax positions taken during the current period 3 The amounts of decreases in the unrecognized tax benefits relating to settlements with taxing authorities 4 Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations. > Policy Related Disclosures > > Interest and Penalty Recognition Policies 740-10-50-19. All rights reserved. Public entities shall disclose both of the following at the end of each annual reporting period presented: a. A tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period. A public entity that is not subject to income taxes because its income is taxed directly to its owners shall disclose that fact and the net difference between the tax bases and the reported amounts of the entity's assets and liabilities. An entity that is a member of a group that files a consolidated tax return shall disclose in its separately issued financial statements: a.Accounting Disclosure Checklist . The total amount of unrecognized tax benefits that. An entity shall disclose its policy on classification of interest and penalties in accordance with the alternatives permitted in paragraph 740-10-45-25 in the notes to the financial statements. The principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to members of the group and the nature and effect of any changes in that method (and in determining related balances to or from affiliates) during the years for which the above disclosures are presented.

Accounting Disclosure Checklist - Annual (12/10) Page 179 of 290 through method as acceptable methods of accounting for investment tax credits. Whichever method of accounting for the investment credit is adopted, it is essential that full disclosure be made of the method followed and amounts involved, when material. > Other Disclosures 740-10-50-21. In addition to disclosures required by this Subtopic, disclosures regarding estimates meeting certain criteria are established in paragraph 275-10-50-8 for nongovernmental entities. See Example 31 (paragraph 740-10-55-218) for an illustration of disclosure relating to the realizability of a deferred tax asset under the requirements of Topic 275. SEC Guidance > Income Tax Disclosures 1 Regulation S-X Rule 4-08(h). The following are required disclosures related to income taxes: a. Disclosure shall be made in the income statement or a note thereto, of the components of income (loss) before income tax expense (benefit) as either domestic or foreign. Amounts applicable to United States Federal income taxes, to foreign income taxes and the other income taxes shall be stated separately for each major component. Amounts applicable to foreign income (loss) and amounts applicable to foreign or other income taxes which are less than five percent of the total of income before taxes or the component of tax expense, respectively, need not be separately disclosed. For purposes of this rule, foreign income (loss) is defined as income (loss) generated from a registrant's foreign operations, i. e., operations that are located outside of the registrant's home country. b. Regarding the reconciliation required by paragraph 740-10-50-12: 1 If no individual reconciling item amounts to more than five percent of the amount computed by multiplying the income before tax by the applicable statutory Federal income tax rate, and the total difference to be reconciled is less than five percent of such computed amount, no reconciliation need be provided unless it would be significant in appraising the trend of earnings. 2 Reconciling items that are individually less than five percent of the computed amount may be aggregated in the reconciliation. 3 The reconciliation may be presented in percentages rather than in dollar amounts. 4 Where the reporting person is a foreign entity, the income tax rate in that person's country of domicile should normally be used in making the above computation, but different rates should not be used for subsidiaries or other segments of a reporting entity. 5 When the rate used by a reporting person is other than the United States Federal corporate income tax rate, the rate used and the basis for using such rate shall be disclosed. 2 SEC-2002 AICPA National Conference on Current SEC Developments; SEC Speech by Doug Alkema. To the extent a benefit is realized for significant impacts of tax planning strategies, the reduction in the effective tax rate, if significant, should be disclosed in the rate reconciliation. Registrants should include in MD&A
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Accounting Disclosure Checklist - Annual (12/10) Page 180 of 290 a discussion of significant changes in the effective tax rate and the effects on liquidity of expected future tax payments. 3 SAB Topic 11.C. SEC Staff views on disclosures related to income tax holidays. If an entity conducts business in a foreign jurisdiction which attracts industry by granting a “holiday” from income taxes for a specified period, a note must: a. Disclose the aggregate dollar and per share effects of the tax holiday b. Briefly describe the factual circumstances including the date on which the special tax status will terminate. KPMG and Other Guidance 1 Disclose the facts and circumstances supporting the realizability of deferred tax assets, including ( Accounting for Income Taxes: An Analysis of FASB Statement 109, ed. 2, p. 297): a. Amount of taxable income and periods over which it must be earned to allow for realization of the deferred tax asset. b. Actual levels of past taxable income. c. Reasons for significant differences between actual levels of past taxable income and pretax book income. d. Known trends, events, or transactions that are expected to affect future levels of taxable income. e. An explicit statement by management of the assertion that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. Note: Also see KPMG’s July 2009 update to FASB Statement 109 Questions and Answers: A Supplement to KPMG’s Accounting for Income Taxes (Second Edition) for discussion of impact of current economic conditions on valuation allowance considerations, including disclosures. > Impact of Health Care Legislation on Deferred Tax Assets 2 In 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the 2003 Act) introduced a Medicare prescription drug benefit and established a tax-free federal subsidy for companies that sponsor qualifying retiree health-care plans. ASC paragraph 740-10-55-166 describes how the federal subsidy reduces the employer’s obligation but, because the subsidy is not taxed, it is not considered when measuring the deferred tax asset for the future tax deductions that would be taken when the employer incurs the prescription drug costs reflected in the existing benefit obligation. As a result, deferred tax assets related to future tax deductions for postretirement health care obligations have not been reduced by the tax effect of the nontaxable payments that would be received for those obligations. Under the new health care legislation, the tax deductible prescription drug costs will be reduced by the amount of the federal subsidy beginning in 2013, thus the “deductible temporary difference” relating to the benefit obligation is also reduced. As a result of the reduction in the deductible temporary difference, companies that receive the subsidy will need to record a charge to earnings to write off a portion of their deferred tax assets related to their postretirement health care obligations. This charge is recorded in the period that includes the enactment date for the health care legislation (March 2010). Also see Defining Issues 10-16.
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Accounting Disclosure Checklist - Annual (12/10) Page 181 of 290 > Other Recent Changes in Tax Law 3 For financial reporting purposes, under ASC Topic 740, Income Taxes, the effects of changes in tax law on current and deferred taxes are accounted for in the period that includes the enactment date of the change. If material, the effect of changes in tax law should be disclosed. The following recent changes in tax law and other tax developments should be considered: a. On March 22, 2010, the U.S. Court of Appeals for the Ninth Circuit issued a decision holding that, under the pre-2004 cost sharing regulations, stockbased compensation is not a “cost” that must be shared by participants in cost sharing arrangements. This decision affirms the decision made by the U.S. Tax Court in August 2005 and represents a reversal of the May 2009 decision by the Ninth Circuit.. b. The Hiring Incentives to Restore Employment Act (HIRE Act) extends the statute of limitations if a taxpayer fails to file certain international-related IRS information returns. In certain situations, failing to file the required foreign information or failing to file complete information keeps the statute of limitations period for the unfurnished information open indefinitely. In these cases, the statute of limitations for the unfurnished information will not commence until all required information is filed with the IRS. The provisions are effective for tax returns filed after the March 18, 2010 enactment date with transition provisions for tax returns filed before March 19, 2010. ( Defining Issues 10-37). > Sale or Purchase of Tax Benefits 4. FTB 82-1, ¶6. If material and unusual or infrequent, the nature and financial effects of transactions involving the sale or purchase of tax benefits through tax leases should be disclosed on the face on the income statement or alternatively, in notes to the financial statements. Intraperiod Tax Allocation Presentation > Allocation of Income Tax Expense or Benefit for the Year 740-20-45-2. Disclose the amount of income tax expense or benefit for the year allocated to the following: a. Continuing operations b. Discontinued operations c. Extraordinary items d. Other comprehensive income e. Items charged or credited directly to shareholders’ equity Other Considerations or Special Areas Disclosure > Undistributed Earnings of Subsidiaries and Corporate Joint Ventures 740-30-50-2. All of the following information shall be disclosed whenever a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures: a. A description of the types of temporary differences for which a deferred tax
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Accounting Disclosure Checklist - Annual (12/10) Page 182 of 290 liability has not been recognized and the types of events that would cause those temporary differences to become taxable b. The cumulative amount of each type of temporary difference c. The amount of the unrecognized deferred tax liability for temporary differences related to investments in foreign subsidiaries and foreign corporate joint ventures that are essentially permanent in duration if determination of that liability is practicable or a statement that determination is not practicable. While paragraph 740-30-25-14 prohibits recognition of a tax benefit for tax deductions or favorable tax rates attributable to future dividends of undistributed earnings for which a deferred tax liability has not been recognized, favorable tax treatment would be reflected in measuring that unrecognized deferred tax liability for disclosure purposes. d. The amount of the deferred tax liability for temporary differences other than those in (c) (that is, undistributed domestic earnings) that is not recognized in accordance with the provisions of paragraph 740-30-25-18. 94 Business Combinations (Subtopics 805-10, 805-20, and 805-30) Note: This section is subject to pending content. See further discussion below. Disclosure > Aggregation of Disclosures 805-10-50-3, 805-20-50-2, 805-30-50-2. For individually immaterial business combinations occurring during the reporting period that are material collectively, the acquirer shall disclose the information required by subparagraphs 805-10-502(e) through 50-2(h) and paragraphs 805-20-50-1 and 805-30-50-1 (in this checklist) in the aggregate. > Disclosures about Business Combinations Occurring After the Reporting Date but Before the Financial Statements Are Issued 805-10-50-4. 805-20-50-3, 805-30-50-3. If the acquisition date of a business combination is after the reporting date but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25), the acquirer shall disclose the information required by paragraphs 805-10-50-2, 80520-50-1, and 805-30-50-1 (in this checklist) unless the initial accounting for the business combination is incomplete at the time the financial statements are issued or are available to be issued. In that situation, the acquirer shall describe which disclosures could not be made and the reason why they could not be made. > Business Combinations Occurring During a Current Reporting Period or After the Reporting Date but Before the Financial Statements Are Issued 805-10-50-1. The acquirer shall disclose information that enables users of its financial statements to evaluate the nature and financial effect of a business combination that occurs either: a. During the current reporting period
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Accounting Disclosure Checklist - Annual (12/10) Page 183 of 290 b. After the reporting date but before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25). 805-10-50-2. To meet the objective in the preceding paragraph, the acquirer shall disclose the following information for each business combination that occurs during the reporting period: a. The name and a description of the acquiree b. The acquisition date c. The percentage of voting equity interests acquired d. The primary reasons for the business combination and a description of how the acquirer obtained control of the acquiree e. For transactions that are recognized separately from the acquisition of assets and assumptions of liabilities in the business combination (see paragraph 80510-25-20), all of the following: 1 2 3 4 f. A description of each transaction How the acquirer accounted for each transaction The amounts recognized for each transaction and the line item in the financial statements in which each amount is recognized If the transaction is the effective settlement of a preexisting relationship, the method used to determine the settlement amount.

The disclosure of separately recognized transactions required in (e) shall include the amount of acquisition-related costs, the amount recognized as an expense, and the line item or items in the income statement in which those expenses are recognized. The amount of any issuance costs not recognized as an expense and how they were recognized also shall be disclosed.

g. In a business combination achieved in stages, all of the following: 1 2 The acquisition-date fair value of the equity interest in the acquiree held by the acquirer immediately before the acquisition date The amount of any gain or loss recognized as a result of remeasuring to fair value the equity interest in the acquiree held by the acquirer immediately before the business combination (see paragraph 805-10-2510) and the line item in the income statement in which that gain or loss is recognized The valuation technique(s) used to measure the acquisition-date fair value of the equity interest in the acquiree held by the acquirer immediately before the business combination Information that enables users of the acquirer’s financial statements to assess the inputs used to develop the fair value measurement of the equity interest in the acquiree held by the acquirer immediately before the business combination.

3

4

©2010 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Entities that have adopted EITF 10-G should disclose the following: h. the revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period (supplemental pro forma information). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist . For example. If the acquirer is a public business entity: 1 2 The amounts of revenue and earnings of the acquiree since the acquisition date included in the consolidated income statement for the reporting period The revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period (supplemental pro forma information) If comparative financial statements are presented. All rights reserved. the revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period (supplemental pro forma information) 3 If comparative financial statements are presented. 20X1. Disclosure of Supplementary Pro Forma Information for Business Combinations.S. a Delaware limited liability partnership and the U. as if it occurred on January 1. the entity (acquirer) should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.Annual (12/10) Page 184 of 290 Note: EITF 10-G. for a calendar year-end entity. disclosures would be provided for a business combination that occurs in 20X2. If the acquirer is a public business entity: 1 The amounts of revenue and earnings of the acquiree since the acquisition date included in the consolidated income statement for the reporting period 2 If comparative financial statements are not presented. nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. EITF 10-G is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15. Such disclosures would not be revised if 20X2 is presented for comparative purposes with the 20X3 financial statements (even if 20X2 is the earliest period ©2010 KPMG LLP. 2010. Entities that have not adopted EITF 10-G should disclose the following: h. EITF 10-G also expands the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material. the revenue and earnings of the combined entity for the comparable prior reporting period as though the acquisition date for all business combinations that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period (supplemental pro forma information). 3 . specifies that if a public entity presents comparative financial statements. Early adoption is permitted. a Swiss entity.

If the initial accounting for a business combination is incomplete (see paragraphs 805-10-25-13 through 25-14) for particular assets. The acquirer shall disclose information that enables users of its financial statements to evaluate the financial effects of adjustments recognized in the current reporting period that relate to business combinations that occurred in the current or previous reporting periods. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). In this context. or items of consideration and the amounts recognized in the financial statements for the business combination thus have been determined only provisionally. The assets. the acquirer shall disclose whatever additional information is necessary to meet those objectives. . a Swiss entity. a Delaware limited liability partnership and the U. 805-10-50-8. > The Financial Effects of Adjustments that Relate to Business Combinations that Occurred in the Current or Previous Reporting Periods 805-10-50-5. All rights reserved. nonrecurring pro forma adjustments directly attributable to the business combination(s) included in the reported pro forma revenue and earnings (supplemental pro forma information). Example 5 (see paragraph 805-10-55-37) illustrates the disclosure requirements applicable to business combinations. Where a material business combination has occurred during the current fiscal year. The nature and amount of any measurement period adjustments recognized during the reporting period in accordance with paragraph 805-10-25-17. > Other Disclosures 805-10-50-7. the acquirer shall disclose that fact and explain why the disclosure is impracticable. The reasons why the initial accounting is incomplete b.S. the acquirer shall disclose the following information for each material business combination or in the aggregate for individually immaterial business combinations that are material collectively to meet the objective in preceding paragraph: a. The nature and amount of any material. SEC Guidance > Pro Forma Disclosure 1 Regulation S-X Rule 10-1.Accounting Disclosure Checklist . the term impracticable has the same meaning as in paragraph 250-10-45-9.Annual (12/10) Page 185 of 290 presented). This pro ©2010 KPMG LLP. noncontrolling interests. If the specific disclosures required by this Subtopic and other generally accepted accounting principles (GAAP) do not meet the objectives set out in paragraphs 805-10-50-1 and 805-10-50-5 (both in this checklist). 4 If disclosure of any of the information required by (h) is impracticable. liabilities. equity interests. 805-10-50-6. or items of consideration for which the initial accounting is incomplete c. pro forma disclosure shall be made of the results of operations for the current year up to the date of the most recent interim balance sheet provided (and for the corresponding period in the preceding year) as though the companies had combined at the beginning of the period being reported on. liabilities.

the following disclosures shall be included in the footnote that describes the business combination: 1 For assets and liabilities arising from contingencies recognized at the acquisition date: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). that fact and the reasons why a range cannot be estimated. For indemnification assets.Accounting Disclosure Checklist . a Swiss entity. including such income on a per share basis. and net income and net income per share. Subtopic 805-20: Business Combinations—Identifiable Assets and Liabilities. To meet that objective.S. All rights reserved. For acquired receivables not subject to the requirements of Subtopic 310-30. if a range cannot be estimated. and Any Noncontrolling Interest Disclosure > Business Combinations Occurring During a Current Reporting Period or After the Reporting Date but Before the Financial Statements Are Issued 805-20-50-1. b. If the maximum amount of the payment is unlimited. a Delaware limited liability partnership and the U. d. and any other class of receivables. (See paragraph 270-10S99-1 for rules pertaining to supplemental pro forma disclosure in a business combination). . income before extraordinary items and the cumulative effect of accounting changes. all of the following: 1 2 3 The amount recognized as of the acquisition date A description of the arrangement and the basis for determining the amount of the payment An estimate of the range of outcomes (undiscounted) or. c. direct financing leases in accordance with Subtopic 840-30. The amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed (see Example 5 [paragraph 805-10-5537]). such as loans. the acquirer shall disclose that fact. The amounts recognized at the acquisition date and the measurement ©2010 KPMG LLP. For contingencies. Paragraph 805-10-50-1 (in this checklist) identifies one of the objectives of disclosures about a business combination. The disclosures shall be provided by major class of receivable. the acquirer shall disclose all of the following information for each business combination that occurs during the reporting period: a.Annual (12/10) Page 186 of 290 forma information should at a minimum show revenue. all of the following: 1 2 3 The fair value of the receivables The gross contractual amounts receivable The best estimate at the acquisition date of the contractual cash flows not expected to be collected.

the disclosures required by Topic 450 if the criteria for disclosures in that Topic are met. Specific nature and fair value of each significant IPR&D project acquired. For each business combination in which the acquirer holds less than 100 percent of the equity interests in the acquiree at the acquisition date. An acquirer may aggregate disclosures for assets and liabilities arising from contingencies that are similar in nature. such as in MD&A. Completeness. a Delaware limited liability partnership and the U. Suggested disclosures include the following: a. b. the PAS identifies the following general considerations: a. c.Annual (12/10) Page 187 of 290 basis applied (that is. The nature of the contingencies. ©2010 KPMG LLP. Nature. The extent of disclosures about IPR&D should not give undue emphasis to IPR&D when research and development is a relatively minor aspect of the overall financial activities of the company. The safe harbor for forward-looking information adopted in the Private Securities Litigation Reform Act of 1995 does not extend to financial statement disclosures. a Swiss entity. timing. e.Accounting Disclosure Checklist . c. 2 For contingencies that are not recognized at the acquisition date. a public company should consider the legal implications of including those disclosures in the financial statements rather than outside the financial statements. both of the following: 1 2 The fair value of the noncontrolling interest in the acquiree at the acquisition date The valuation technique(s) and significant inputs used to measure the fair value of the noncontrolling interest. KPMG and Other Guidance 1 The AICPA Practice Aid Series (PAS) Accounting for Assets Acquired in a Business Combination to be Used in Research and Development Activities: A Focus on Software. . complexity. (Note: The AICPA is currently updating its PAS to reflect the effects of Statements 141(R) and 157).S. To the extent that contemplated disclosures about IPR&D include forwardlooking information. at fair value or at an amount recognized in accordance with Topic 450 and Section 450-20-25) b. b. and estimated cost of efforts necessary to complete projects and the anticipated completion dates. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Electronic Devices and Pharmaceutical Industries discusses best practice disclosures relative to in-process research and development (IPR&D) acquired in a business combination. The qualitative and quantitative materiality of IPR&D (individually or in the aggregate). In determining whether entities should provide disclosures about IPR&D. and uniqueness of projects at acquisition date.

a Swiss entity. for example. c.S. f. Paragraph 805-10-50-1 (in this checklist) identifies one of the objectives of disclosures about a business combination. including a business or subsidiary of the acquirer Liabilities incurred. results of operations. The acquisition-date fair value of the total consideration transferred and the acquisition-date fair value of each major class of consideration. g. Risks and uncertainties associated with completing development on schedule and consequences if it is not completed timely. discuss the status of efforts to complete the projects and the impact of any delays on expected investment return. To meet that objective. such as the following: 1 2 3 4 Cash Other tangible or intangible assets. b. i. Appraisal method used to value projects. or other factors. disclose the portion of the purchase price assigned to each individually material project. h. e. Including Consideration Transferred Disclosure > Business Combinations Occurring During a Current Reporting Period or after the Reporting Date but before the Financial Statements Are Issued 805-30-50-1. the acquirer shall disclose all of the following information for each business combination that occurs during the reporting period: a. Significant appraisal assumptions. A qualitative description of the factors that make up the goodwill recognized. All rights reserved. For contingent consideration arrangements. a Delaware limited liability partnership and the U. . intangible assets that do not qualify for separate recognition.Accounting Disclosure Checklist . a liability for contingent consideration Equity interests of the acquirer. such as expected synergies from combining operations of the acquiree and the acquirer. The technique used in each acquisition to value material assets acquired to be used in R&D activities. For each acquisition resulting in a material IPR&D charge. and financial condition. all of the following: 1 2 The amount recognized as of the acquisition date A description of the arrangement and the basis for determining the amount of the payment ©2010 KPMG LLP. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Subtopic 805-30: Business Combinations—Goodwill or Gain from Bargain Purchase. In periods after a significant write-off.Annual (12/10) Page 188 of 290 d. including the number of instruments or interests issued or issuable and the method of determining the fair value of those instruments or interests.

If the maximum amount of the payment is unlimited. For each reporting period after the acquisition date until the entity collects.S. f. If the acquirer is required to disclose segment information in accordance with Subtopic 280-10. 95 Transactions Between Entities Under Common Control Subsection of Subtopic 805-50: Business Combinations—Related Issues Presentation > Financial Statement Presentation in Period of Transfer ©2010 KPMG LLP. the acquirer shall disclose that fact. both of the following: 1 The amount of any gain recognized in accordance with paragraph 805-3025-2 and the line item in the income statement in which the gain is recognized A description of the reasons why the transaction resulted in a gain. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . A reconciliation of the carrying amount of goodwill at the beginning and end of the reporting period as required by paragraph 350-20-50-1. All rights reserved. e. . the acquirer shall disclose that fact. The total amount of goodwill that is expected to be deductible for tax purposes. all of the following: 1 2 3 Any changes in the recognized amounts. or until the entity settles a contingent consideration liability or the liability is cancelled or expires. d. 2 > The Financial Effects of Adjustments that Relate to Business Combinations that Occurred in the Current or Previous Reporting Periods 805-30-50-4. In a bargain purchase (see paragraphs 805-30-25-2 through 25-4). if a range cannot be estimated. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The acquirer shall disclose the following information for each material business combination or in the aggregate for individually immaterial business combinations that are material collectively: a. If the assignment of goodwill to reporting units required by paragraphs 350-20-35-41 through 35-44 has not been completed as of the date the financial statements are issued or are available to be issued (as discussed in Section 855-10-25). or otherwise loses the right to a contingent consideration asset. a Swiss entity. b.Annual (12/10) Page 189 of 290 3 An estimate of the range of outcomes (undiscounted) or. that fact and the reasons why a range cannot be estimated. sells. the amount of goodwill by reportable segment. including any differences arising upon settlement Any changes in the range of outcomes (undiscounted) and the reasons for those changes The disclosures required by paragraphs 820-10-50-1 through 50-3.

and cost of sales for periods presented and on retained earnings at the beginning of the periods presented shall be eliminated to the extent possible. All adjusted financial statements and financial summaries shall indicate clearly that financial data of previously separate entities are combined. Similarly.S. Results of operations for that period will thus comprise those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period. The effects of intra-entity transactions on current assets.Annual (12/10) Page 190 of 290 805-50-45-2. However. . a Delaware limited liability partnership and the U. revenue. The nature of and effects on earnings per share (EPS) of nonrecurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated under the guidance in paragraph 805-50-45-3 but shall be disclosed. 805-50-50-3. those results will be on substantially the same basis as the results of operations for the period after the date of combination. The notes to financial statements of the receiving entity shall disclose the following for the period in which the transfer of assets and liabilities or exchange of equity interests occurred: a. the comparative information in prior years shall only be adjusted for periods during which the entities were under common control. current liabilities. All rights reserved. The method of accounting for the transfer of net assets or exchange of equity interests. the receiving entity shall present the statement of financial position and other financial information as of the beginning of the period as though the assets and liabilities had been transferred at that date. The name and brief description of the entity included in the reporting entity as a result of the net asset transfer or exchange of equity interests b. > Comparative Financial Statement Presentation in Prior Years 805-50-45-5. The financial statements of the receiving entity shall report results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. 805-50-45-4. The receiving entity also shall consider whether additional disclosures are required in accordance with Section 850-10-50. Financial statements and financial information presented for prior years also shall be retrospectively adjusted to furnish comparative information. Disclosure 805-50-50-2. By eliminating the effects of intra-entity transactions in determining the results of operations for the period before the combination. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Swiss entity. 805-50-50-4. which provides guidance on related party transactions and certain common control relationships 96 New Basis of Accounting (Pushdown) Subsection of Subtopic 805-50: Business Combinations— Related Issues —SEC Guidance > Push-Down Basis of Accounting Required in Certain Limited Circumstances ©2010 KPMG LLP.Accounting Disclosure Checklist .

All rights reserved. Information about the nature and purpose of its collaborative arrangements b. An entity shall not apply the equity method of accounting to activities of collaborative arrangements. regardless of whether the debt is reflected in the subsidiary’s financial statements. a Swiss entity. In the period in which a collaborative arrangement is entered into (which may be an interim period) and all annual periods thereafter. a participant to a collaborative arrangement shall disclose all of the following: a. the "assets" and "total assets" captions should include parenthetically: "pledged for parent company debt-See Note X. the SEC staff believes subsidiary’s Management’s Discussion and Analysis of Financial Condition and Results of Operations should discuss any material impact of its servicing of parent company’s debt on its own liquidity pursuant to Item 303(a)(1) of Regulation S-K. The accounting policy for collaborative arrangements in accordance with ©2010 KPMG LLP. the participant in a collaborative arrangement that is deemed to be the principal participant for a given transaction under Subtopic 605-45 shall record that transaction on a gross basis in its financial statements.Annual (12/10) Page 191 of 290 1 SAB Topic 5. that provides security for parent company’s debt. 808-10-45-2. a description of any arrangements that result in subsidiary’s guarantee." Additionally. pledge of assets or stock. the extent (in the aggregate and for each of the five years subsequent to the date of the latest balance sheet presented) to which parent company is dependent on subsidiary’s cash flows to service its debt and the method by which this will occur. etc. and d. 2 A material asset pledge should be clearly indicated on the face of the balance sheet. and whether those payments are within the scope of other authoritative accounting literature on income statement classification. c. the impact of such cash flows on subsidiary’s ability to pay dividends or other amounts to holders of its securities. 3 97 Subtopic 808-10: Collaborative Arrangements—Overall Presentation 808-10-45-1. in circumstances where the parent company borrowed funds to acquire the subsidiary. the contractual terms of the arrangement. Disclosure 808-10-50-1. An entity shall evaluate the income statement classification of payments between participants pursuant to a collaborative arrangement based on the nature of the arrangement. disclose at a minimum: a. Its rights and obligations under the collaborative arrangements c. if all or substantially all of the assets are pledged. For example. b. In separate financial statements of a subsidiary. the nature of its business operations. For costs incurred and revenue generated from third parties.J. the relationship between the parent company and subsidiary. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . 808-10-45-4.S.

the concept usually applied for this purpose is gross profit or loss (see also paragraph 81010-45-8 in this checklist). . > Parent Entity Statements 810-10-45-11. 810-10-45-8. any intra-entity profit or loss on assets remaining within the consolidated group shall be eliminated. As consolidated financial statements are based on the assumption that they represent the financial position and operating results of a single economic entity. those taxes shall be deferred or the intra-entity profits to be eliminated in consolidation shall be appropriately reduced. However. and noncontrolling interests. and so forth. foreign operations. If combined financial statements are prepared for a group of related entities. often are an effective means of presenting the pertinent information. intra-entity balances and transactions shall be eliminated. different fiscal periods. In the preparation of consolidated financial statements. sales and purchases. thus. a Swiss entity. shall be eliminated in the consolidated financial statements and reflected as treasury shares. 810-10-45-5. Information related to individually significant collaborative arrangements shall be disclosed separately. Shares of the parent held by a subsidiary shall not be treated as outstanding shares in the consolidated statement of financial position and. in which one column is used for the parent and other columns for particular subsidiaries or groups of subsidiaries.Accounting Disclosure Checklist . If income taxes have been paid on intra-entity profits on assets remaining within the consolidated group. All rights reserved. such statements shall not include gain or loss on transactions among the entities in the consolidated group. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Accordingly. to indicate adequately the position of bondholders and other creditors or preferred shareholders of the parent. therefore. intra-entity transactions and profits or losses shall be eliminated. in addition to consolidated financial statements. a Delaware limited liability partnership and the U. In some cases parent-entity financial statements may be needed. > Combined Financial Statements 810-10-45-10. security holdings. The income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants for each period an income statement is presented.Annual (12/10) Page 192 of 290 Topic 235 d. dividends.S. 98 Subtopic 810-10: Consolidation—Overall Presentation > Procedures 810-10-45-1. parent-entity financial statements ©2010 KPMG LLP. Consolidating financial statements. interest. consolidated financial statements are the general-purpose financial statements of a parent having one or more subsidiaries. This includes intra-entity open account balances. or income taxes shall be treated in the same manner as in consolidated financial statements. such as a group of commonly controlled entities.

financial statements for a period that corresponds with or closely approaches the fiscal period of the parent. as noncontrolling interest in subsidiaries (see paragraph 810-10-55-4I). if the difference is not more than about three months. 810-10-45-17A. for consolidation purposes. > Attributing Net Income and Comprehensive Income to the Parent and the Noncontrolling Interest ©2010 KPMG LLP. if such an equity-classified instrument was entered into by the parent and expires unexercised. for consolidation purposes. in whole or in part. A financial instrument (or an embedded feature) issued by a parent or a subsidiary for which the payoff to the counterparty is based. It ordinarily is feasible for the subsidiary to prepare. That amount shall be clearly identified and labeled.S. a Swiss entity. separately from the parent’s equity.Accounting Disclosure Checklist . the subsidiary's financial statements for its fiscal period. A financial instrument (or an embedded feature) issued by a subsidiary that is classified as equity in the subsidiary’s financial statements b. a Delaware limited liability partnership and the U. An equity-classified instrument (including an embedded feature that is separately recorded in equity under applicable GAAP) within the scope of the guidance in paragraph 815-40-15-5C shall be presented as a component of noncontrolling interest in the consolidated financial statements whether the instrument was entered into by the parent or the subsidiary. if this is done.Annual (12/10) Page 193 of 290 are not a valid substitute for consolidated financial statements. Only either of the following can be a noncontrolling interest in the consolidated financial statements: a. 810-10-45-17. Topic 480 provides guidance for classifying certain financial instruments issued by a subsidiary. A financial instrument issued by a subsidiary that is classified as a liability in the subsidiary’s financial statements based on the guidance in other Subtopics is not a noncontrolling interest because it is not an ownership interest. . However. For example. > Noncontrolling Interest in a Subsidiary >> Nature and Classification of the Noncontrolling Interest in the Consolidated Statement of Financial Position 810-10-45-16. 810-10-45-16A. However. on the stock of a consolidated subsidiary. for example. recognition should be given by disclosure or otherwise to the effect of intervening events that materially affect the financial position or results of operations. All rights reserved. it usually is acceptable to use. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). > Differing Fiscal Year-Ends Between Parent and Subsidiary 810-10-45-12. An entity with noncontrolling interests in more than one subsidiary may present those interests in aggregate in the consolidated financial statements. that is considered indexed to the entity’s own stock in the consolidated financial statements of the parent and that is classified as equity. The noncontrolling interest shall be reported in the consolidated statement of financial position within equity. the carrying amount of the instrument shall be reclassified from the noncontrolling interest to the controlling interest.

That is. c. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . Disclosure > Consolidation Policy 810-10-50-1. if reported in the consolidated financial statements: 1 2 3 Income from continuing operations Discontinued operations Extraordinary items. Either in the notes or on the face of the consolidated income statement. Separately.Annual (12/10) Page 194 of 290 810-10-45-19. Losses attributable to the parent and the noncontrolling interest in a subsidiary may exceed their interests in the subsidiary’s equity. A parent with one or more less-than-wholly-owned subsidiaries shall disclose all of the following for each reporting period: a. a reconciliation at the beginning and the end of the period of the carrying amount of total equity (net assets). Net income or loss and comprehensive income or loss. The excess. if presented.S. Either in the consolidated statement of changes in equity. amounts attributable to the parent for any of the following. b. All rights reserved. In most cases this can be made apparent by the headings or other information in the financial statements. and equity (net assets) attributable to the noncontrolling interest. a Delaware limited liability partnership and the U. and other comprehensive income shall be reported in the consolidated financial statements at the consolidated amounts. equity (net assets) attributable to the parent. but in other cases a footnote is required. shall be attributed to the parent and the noncontrolling interest. as described in Topic 220. which include the amounts attributable to the owners of the parent and the noncontrolling interest.Accounting Disclosure Checklist . > Parent with a Less-than-Wholly-Owned Subsidiary 810-10-50-1A. 810-10-45-21. on the face of the consolidated financial statements. That reconciliation shall separately disclose all of the following: ©2010 KPMG LLP. a Swiss entity. both of the following: 1 2 The amounts of consolidated net income and consolidated comprehensive income The related amounts of each attributable to the parent and the noncontrolling interest. expenses. and any further losses attributable to the parent and the noncontrolling interest. Revenues. or in the notes to consolidated financial statements. losses. shall be attributed to those interests. 810-10-45-20. the noncontrolling interest shall continue to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance. net income or loss. Consolidated financial statements shall disclose the consolidation policy that is being followed. gains.

Information that enables users of the parent’s financial statements to assess the inputs used to develop the fair value measurement f.) a. d.Annual (12/10) Page 195 of 290 1 2 3 Net income Transactions with owners acting in their capacity as owners. In the period that a subsidiary or group of assets specified in paragraph 810-10-40-3A is deconsolidated. a separate schedule that shows the effects of any changes in a parent’s ownership interest in a subsidiary on the equity attributable to the parent.Accounting Disclosure Checklist . In notes to the consolidated financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Example 2 (see paragraph 810-10-55-4G) illustrates the application of the guidance in this paragraph. An entity should make the disclosures required pursuant to Topic 250. All rights reserved. showing separately contributions from and distributions to owners Each component of other comprehensive income. The nature of continuing involvement with the subsidiary after it has been deconsolidated g. . Whether the transaction that resulted in the deconsolidation was with a related party h. SEC Guidance > Disclosure of Accounting Policies ©2010 KPMG LLP. > Deconsolidation of a Subsidiary 810-10-50-1B. > A Change in the Difference Between Parent and Subsidiary Fiscal Year-Ends 810-10-50-2. the parent shall disclose all of the following: (Note: The requirements in this paragraph are not yet applicable to NFPs. a Swiss entity. This paragraph applies to all entities that change (or eliminate) a previously existing difference between the reporting periods of a parent and a consolidated entity or an investor and an equity method investee. The caption in the income statement in which the gain or loss is recognized unless separately presented on the face of the income statement d. The portion of any gain or loss related to the remeasurement of any retained investment in the former subsidiary to its fair value c. The valuation technique(s) use to measure the fair value of any direct or indirect retained investment in the former subsidiary or group of assets e. a Delaware limited liability partnership and the U. The amount of any gain or loss recognized in accordance with paragraph 810-10-40-5 b.S. This paragraph does not apply in situations in which a parent entity or an investor changes its fiscal yearend. Whether the former subsidiary or entity acquiring a group of assets will be a related party after deconsolidation.

formula. When determining significance for an investment that is accounted for using the fair option under Statement 159 (ASC Topic 825).Accounting Disclosure Checklist . assets of a divested business not treated as such for accounting purposes. include: a.27. This rule provides the requirements for disclosure of principles followed in consolidating or combining separate financial statements.).S. > Intercompany (Intra-entity) Items and Transactions 3 Regulation S-X Rule 3A-04. . if the criteria for a significant subsidiary are met using 20 percent (S-X. a statement of the reasons and the methods of treatment shall be made. the persons included and the persons excluded shall be disclosed. shall be stated in the notes to the respective financial statements. If such eliminations are not made. Disclose information regarding redemption features of noncontrolling interests. The disclosures should clearly explain the accounting policies followed by the registrant. > Other 4 5 Regulation S-X Rule 5-02. including the principles followed in determining the inclusion or exclusion of subsidiaries in consolidated or combined financial statements. File separate audited financial statements of subsidiaries not consolidated and 50 percent-or-less-owned persons accounted for by the equity method. indicate clearly such changes and the manner of treatment. Classify as “assets of business transferred under contractual arrangements (notes receivable)” or similar terminology.Annual (12/10) Page 196 of 290 1 Regulation S-X Rule 3A-02. A brief description of the principles followed in consolidating or combining the separate financial statements. a registrant should perform the 6 7 ©2010 KPMG LLP.28. > Statements as to Principles of Consolidation or Combination Followed 2 Regulation S-X Rule 3A-03. including the circumstances involved in any departure from the normal practice of consolidating majority owned subsidiaries and not consolidating entities that are less than majority owned. etc. b. and companies in consolidated or combined financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Swiss entity. This Rule provides the requirements for disclosure of consolidation policy. Regulation S-X Rule 5-02. including terms of redemption features and how redemption amounts are determined (such as fair value. SAB Topic 5-E. a Delaware limited liability partnership and the U. if there has been a change in the persons included or excluded in the corresponding statement for the preceding fiscal period filed with the SEC which has a material effect on the financial statements. Classify separately amounts represented by preferred stock and applicable dividend requirements. This Rule provides the requirements for disclosure of intercompany (intra-entity) items and transactions. If there have been any changes in the respective fiscal periods of the persons included made during the periods of the report which have a material effect on the financial statements. All rights reserved. Rule 3-09). specified amount. As to each consolidated financial statement and as to each combined financial statement.

ASU 2009-17 requires additional year-end and interim disclosures for public and nonpublic companies ©2010 KPMG LLP. and the Task Force dropped the issue. included in the numerator would be any gain/loss recorded by the registrant in its financial statements arising from a transaction in which a consolidated subsidiary becomes eligible for equity method accounting.Annual (12/10) Page 197 of 290 income test using the change in the fair value of the investment recorded in its income statement. the parent should disclose the following: a. The Task Force acknowledged that unless and until the issue is addressed. a Swiss entity. “Seller Accounting for Contingent Consideration. as this is the best indication of the impact of the investment on the registrant’s financial statements.S.Accounting Disclosure Checklist .” No conclusion was reached. A description of how the contingent consideration arrangement is accounted for in the financial statements. The FASB’s Exposure Draft on accounting for financial instruments would provide guidance only for seller contingent consideration that is based on an observable market or index. If a subsidiary is deconsolidated as part of a business combination that includes a contingent consideration arrangement as part of the consideration received by the parent. either: 1 2 At fair value as part of the initial gain or loss recognized in accordance with paragraph 810-10-40-5. . Also. or As a gain contingency under Topic 450 b. KPMG and Other Guidance 1 In September 2009. ASU 2009-17 amends the Variable Interest Entities Subsections of ASC Subtopic 810-10 to require former qualifying SPE (QSPE) to be evaluated for consolidation and also changes the approach to determining a VIE’s primary beneficiary and requires companies to more frequently reassess whether they must consolidate VIEs. 46(R)). the EITF discussed Issue No. All rights reserved. Amendments to FASB Interpretation No. Consolidation (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities (FASB Statement No. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 167. a Delaware limited liability partnership and the U. 09-4. there will be diversity in how sellers in a business combination account for contingent consideration. If the contingent consideration is initially measured at fair value by the parent: 1 2 3 4 The amount recognized as of the date of deconsolidation of the subsidiary A description of the arrangement and the basis for determining its fair value The caption in the income statement in which the gain or loss is recognized unless separately presented on the face of the income statement A description how the arrangement is subsequently accounted for after its initial measurement at fair value 99 Variable Interest Entities Subsection of Subtopic 810-10: Consolidation—Overall Note: The content in this Subsection has been updated for ASU 2009-17. but will be accounted for under the fair value option.

The amendments in this ASU also clarify that for entities that do not qualify for the deferral. comparative disclosures for those disclosures that were not previously required by the Variable Interest Entities Subsection of Subtopic 810-10 (FIN 46(R)) are required only for periods after the effective date. Note: In February 2010. ASU 2009-17 is effective as of the beginning of the first annual reporting period that begins after November 15. This includes variable interests in entities that qualify for the ©2010 KPMG LLP. All rights reserved. asset-backed financing entities. the requirements for evaluating whether a decision maker’s or service provider’s fee is a variable interest are modified to clarify the Board’s intention that a quantitative calculation should not be the sole basis for this evaluation. Earlier application is prohibited. in periods after initial adoption. . This ASU does not defer the disclosure requirements in the Statement 167 amendments to Topic 810. such as the guidance for the consolidation of partnerships in Subtopic 810-20. and for interim and annual reporting periods thereafter. The deferral also does not apply to interests in securitization entities. both public and nonpublic companies are required to provide the disclosures included in Topic 810. For public entities. in periods after initial adoption. Consolidation (Topic 810): Amendments for Certain Investment Funds. a Swiss entity. which would provide an indefinite deferral of Statement 167 for a reporting entity’s interest in an entity (1) that has all of the attributes of an investment companies or (2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies. related parties should be considered when evaluating each of the criteria in paragraph 810-10-55-37. a Delaware limited liability partnership and the U. An entity that qualifies for the deferral will continue to be assessed under the overall guidance on the consolidation of variable interest entities in Subtopic 810-10 (before the Statement 167 amendments) or other applicable consolidation guidance. 2009.. or entities formerly considered qualifying special purpose entities (QSPEs). In addition. ¶4). FSP FAS 140-4 and FIN 46(R)-8). the FASB issued ASU 2010-10. Comparative information for disclosures previously required by FSP FAS 140-4 and FIN 46(R)-8 that are also required by ASU 2009-17 should be presented. for interim periods within that first annual reporting period. comparative disclosures for those disclosures that were not previously required by FSP FAS 140-4 and FIN 46(R)-8 are required only for periods after the effective date.e. for determining whether a decision maker or service provider fee represent a variable interest. for all variable interest entities in which they hold a variable interest. as amended by Statement 167. the deferral applies to a reporting entity’s interests in registered money market funds and other entities that comply with requirements similar to those in Rule 2a-7 of the Investment Company Act of 1940. Comparative information for disclosures previously required by ASC Subtopic 810-10 for VIEs that are also required by this ASU should be presented (SFAS 167. In addition.Accounting Disclosure Checklist . Accordingly. as amended by Statement 167. The deferral does not apply when a reporting entity has an explicit or implicit obligation to fund losses of the entity that could potentially be significant to the entity.S. For nonpublic entities. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Annual (12/10) Page 198 of 290 that are similar to the disclosures required for public companies by ASC Subtopic 810-10 for VIEs (i.

and if the VIE meets the definition of a business and the VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations. c The nature of. ASU 2010-10 is effective upon adoption of ASU 2009-17 (Statement 167). If the disclosures are provided in more than one note to the financial statements. Presentation 810-10-45-25 A reporting entity shall present each of the following separately on the face of the statement of financial position: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The principal objectives of this Subsection’s required disclosures are to provide financial statement users with an understanding of all of the following: a The significant judgments and assumptions made by a reporting entity in determining whether it must do any of the following: 1 Consolidate a variable interest entity (VIE) 2 b Disclose information about its involvement in a VIE. a Swiss entity.Accounting Disclosure Checklist . the risks associated with a reporting entity’s involvement with the VIE. d How a reporting entity’s involvement with the VIE affects the reporting entity’s financial position. 810-10-50-2AB. 810-10-50-2AC.S. A reporting entity shall consider the overall objectives in the preceding paragraph in providing the disclosures required by this Subsection. If so.Annual (12/10) Page 199 of 290 deferral but are considered VIEs under the provisions of Topic 810 (before the Statement 167 amendments). The disclosures required by this Subsection may be provided in more than one note to the financial statements. as long as the objectives in paragraph 810-10-50-2AA are met. . Liabilities of a consolidated VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of the primary beneficiary. A VIE may issue voting equity interests. Disclosure 810-10-50-2AA. the reporting entity shall provide a cross reference to the other notes to the financial statements that provide the disclosures prescribed in this Subsection for similar entities > Primary Beneficiary of a VIE 810-10-50-3. the disclosures in ©2010 KPMG LLP. Assets of a consolidated variable interest entity (VIE) that can be used only to settle obligations of the consolidated VIE b. financial performance. All rights reserved. and the entity that holds a majority voting interest also may be the primary beneficiary of the VIE. The nature of restrictions on a consolidated VIE’s assets reported by a reporting entity in its statement of financial position. a Delaware limited liability partnership and the U. To achieve those objectives. and cash flows. including the carrying amounts of such assets and liabilities. and changes in. depending on the facts and circumstances surrounding the VIE and a reporting entity’s interest in that VIE. a reporting entity may need to supplement the disclosures otherwise required by this Subsection.

the terms of arrangements. including events or circumstances that could expose the reporting entity to a loss. a Swiss entity. All rights reserved. if the VIE’s assets can be used only to settle obligations of the VIE. as required by (b) above. c A tabular comparison of the carrying amounts of the assets and liabilities. liquidity arrangements and obligations to purchase assets) to the VIE. That discussion shall include. shall disclose: a The carrying amounts and classification of the assets and liabilities in the reporting entity’s statement of financial position that relate to the reporting entity’s variable interest in the VIE. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the reporting entity shall disclose qualitative information about the nature of the restrictions on those assets. The primary beneficiary of a VIE that is a business shall provide the disclosures required by other guidance. giving consideration to both explicit arrangements and implicit variable interests. the primary beneficiary of a VIE shall disclose all of the following (unless the primary beneficiary also holds a majority voting interest): a. The carrying amounts and classification of the VIE’s assets and liabilities in the statement of financial position that are consolidated in accordance with the Variable Interest Entities Subsections. [Not Used] b.Accounting Disclosure Checklist . Lack of recourse if creditors (or beneficial interest holders) of a consolidated VIE have no recourse to the general credit of the primary beneficiary d. . > Nonprimary Beneficiary Holder of a Variable Interest in a VIE 810-10-50-4. including events or circumstances that could expose the reporting entity to a loss. that could require the reporting entity to provide financial support (for example. Terms of arrangements. [Not Used] bb. but is not limited to. a Delaware limited liability partnership and the U. but is not the VIE’s primary beneficiary. as required by (a) above. a reporting entity that holds a variable interest in a VIE. For example. b The reporting entity’s maximum exposure to loss as a result of its involvement with the VIE. c. In addition to disclosures required by other guidance. giving consideration to both explicit arrangements and implicit variable interests that could require the reporting entity to provide financial support (for example. If the reporting entity’s maximum exposure to loss as a result of its involvement with the VIE cannot be quantified. The primary beneficiary of a VIE that is not a business shall disclose the amount of gain or loss recognized on the initial consolidation of the VIE. including how the maximum exposure is determined and the significant sources of the reporting entity’s exposure to the VIE. that fact shall be disclosed. In addition to disclosures required elsewhere in this Topic. including qualitative information about the relationship(s) between those assets and liabilities.Annual (12/10) Page 200 of 290 this paragraph are not required. liquidity arrangements and obligations to purchase assets) to the VIE. and the reporting entity’s maximum exposure to loss. A reporting entity shall provide qualitative and quantitative information to allow financial statement users to understand the differences between the two amounts. ©2010 KPMG LLP.S.

A VIE may issue voting equity interests. significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance is shared in accordance with the guidance in paragraph 810-10-25-38D.S. supplemented with information about how the significant involvements were considered in determining whether the reporting entity is the primary beneficiary. Qualitative and quantitative information about the reporting entity’s involvement (giving consideration to both explicit arrangements and implicit variable interests) with the VIE. size.Annual (12/10) Page 201 of 290 Information about any liquidity arrangements. 810-10-50-5B. A VIE may issue voting equity interests. the VIE was previously consolidated and is not currently consolidated). including. the nature. Whether the reporting entity has provided financial or other support (explicitly or implicitly) during the periods presented to the VIE that it was not previously contractually required to provide or whether the reporting entity intends to provide that support. Its methodology for determining whether the reporting entity is the primary beneficiary of a VIE. including situations in which the reporting entity assisted the VIE in obtaining another type of support 2. If so. > Primary Beneficiaries or Other Holders of Interests in VIEs 810-10-50-5A and 50-5B. and if the VIE meets the definition of a business and the VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations. significant judgments and assumptions made. but not limited to. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). including both of the following: 1. The primary reasons for providing the support. b. If so. All rights reserved. A reporting entity that is a primary beneficiary of a VIE or a reporting entity that holds a variable interest in a VIE but is not the entity’s primary beneficiary shall disclose all of the following: a. One way to meet this disclosure requirement would be to provide information about the types of involvements a reporting entity considers significant. The type and amount of support. the disclosures in this paragraph are not required. e If applicable. the primary factors that caused the change and the effect on the reporting entity’s financial statements. including how the VIE is financed. and/or other commitments by third parties that may affect the fair value or risk of the reporting entity’s variable interest in the VIE is encouraged. c. and the entity that holds a majority voting interest also may be the primary beneficiary of the VIE. and if the VIE meets the definition of a business and the VIE’s assets can be used for purposes other than the settlement of the VIE’s obligations. the disclosures in ©2010 KPMG LLP.Accounting Disclosure Checklist . including. a Delaware limited liability partnership and the U. but not limited to. and activities of the VIE. purpose. and the entity that holds a majority voting interest also may be the primary beneficiary of the VIE. Paragraphs 810-10-25-48 through 25-54 and Example 4 (see paragraph 81010-55-87) provide guidance on how to determine whether a reporting entity has an implicit variable interest in a VIE. d. d . If facts and circumstances change such that the conclusion to consolidate a VIE has changed in the most recent financial statements (for example. a Swiss entity. guarantees.

how much detail it shall provide to satisfy the requirements of the Variable Interest Entities Subsections. sales. The reporting entity's maximum exposure to loss because of its involvement with the legal entities d. . Disclosures about VIEs may be reported in the aggregate for similar entities if separate reporting would not provide more useful information to financial statement users. ©2010 KPMG LLP. VIEs that are consolidated. The number of legal entities to which the guidance in ASC Subtopic 810-10 for VIEs is not being applied and the reason why the information required to apply this guidance is not available b. The nature. a Delaware limited liability partnership and the U. expense. > > Scope-Related Disclosures 810-10-50-6. purpose. size (if available). All rights reserved. The amount of income.Accounting Disclosure Checklist . In determining whether to aggregate VIEs. if it is not practicable to present that information for prior periods that are presented in the first set of financial statements for which this requirement applies. The disclosures shall be presented in a manner that clearly explains to financial statement users the nature and extent of an entity’s involvement with VIEs. the information for those prior periods is not required. A reporting entity shall determine. Similarly. 810-10-50-10. > Aggregation of Certain Disclosures 810-10-50-9.S. and activities of the legal entities and the nature of the reporting entity's involvement with the legal entities c. the reporting entity shall consider quantitative and qualitative information about the different risk and reward characteristics of each VIE and the significance of each VIE to the entity. A reporting entity shall also determine how it aggregates information to display its overall involvements with VIEs with different risk characteristics. a Swiss entity. a reporting entity shall not obscure important information by including it with a large amount of insignificant detail. VIEs that are not consolidated because the reporting entity is not the primary beneficiary but has a variable interest b. The reporting entity must strike a balance between obscuring important information as a result of too much aggregation and overburdening financial statements with excessive detail that may not assist financial statement users to understand the reporting entity’s financial position. or other measure of activity between the reporting entity and the legal entities for all periods presented. in light of the facts and circumstances. purchases. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). A reporting entity shall disclose how similar entities are aggregated and shall distinguish between: a. However. An enterprise that does not apply the guidance in ASC Subtopic 810-10 for VIEs to one or more VIEs or potential VIEs because of the condition described in paragraph 810-10-15-17(c) (the “information-out” scope exception) should disclose all the following information: a. a reporting entity shall not disclose information that is so aggregated that it obscures important differences between the types of involvement or associated risks.Annual (12/10) Page 202 of 290 the preceding paragraph are not required. For example.

Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. Disclosures about Derivative Instruments and Hedging Activities requires comparative disclosures only for periods subsequent to initial adoption (annual or interim periods beginning after November 15. Adoption of ASU 2010-11 is required in annual financial statements as of December 31. explanation of the effect that deconsolidation had on the financial statements. 815-10-45-5. 2010. 100 Subtopic 815-10: Derivatives and Hedging--Overall Note: FASB Statement No. . This ASU is effective for the first fiscal quarter that begins after June 15. An explanation of the transaction between the parent and the subsidiary that resulted in debt appearing on the books of the subsidiary. Without regard to the condition in paragraph 210-20-45-1(c) (in this checklist). an explanation for why it is not. Other entities with a December 31 fiscal year-end must adopt the provisions of ASU 2010-11 in the year ending December 31. As a result. See the Pending Content at the end of this Subtopic for more information. The Variable Interest Entities Subsections of ASC Subtopic 810-10 will not affect the ability of finance subsidiaries issuing trust preferred securities to avail themselves of Rule 3-10(b) of Regulation S-X (ASC paragraph 470-10-S99-1) and Exchange Act Rule 12h-5 if the finance subsidiaries meet the conditions of that paragraph and provide the following footnote disclosure: a. Early adoption is permitted. entities that have contracts containing an embedded credit derivative feature in a form other than such subordination may need to separately account for the embedded credit derivative feature. 2010 for SEC registrants and other entities that provide interim (quarterly) reports. 161. None of the provisions in this Subtopic support netting a hedging derivative's asset (or liability) position against the hedged liability (or asset) position in the balance sheet. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). If a deconsolidated finance subsidiary was previously consolidated. c. Note: The content in this Subtopic has not been updated for ASU 2010-11. Only one form of embedded credit derivative qualifies for the exemption—one that is related only to the subordination of one financial instrument to another. a reporting entity may offset fair value amounts recognized for ©2010 KPMG LLP. b. A statement of whether the finance subsidiary is consolidated.S. a Swiss entity. All rights reserved. 2011.Annual (12/10) Page 203 of 290 SEC Guidance > Other 1 Rule S-X Rule 3-10. 2008). This ASU clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . See disclosure requirements in Pending Content at the end of this subsection. If the finance subsidiary is not consolidated. Presentation > Balance Sheet—Netting 815-10-45-2.

Accounting Disclosure Checklist - Annual (12/10) Page 204 of 290 derivative instruments and fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) arising from derivative instrument(s) recognized at fair value executed with the same counterparty under a master netting arrangement. Solely as it relates to the right to reclaim cash collateral or the obligation to return cash collateral, fair value amounts include amounts that approximate fair value. The preceding sentence shall not be analogized to for any other asset or liability. The fair value recognized for some contracts may include an accrual component for the periodic unconditional receivables and payables that result from the contract; the accrual component included therein may also be offset for contracts executed with the same counterparty under a master netting arrangement. A master netting arrangement exists if the reporting entity has multiple contracts, whether for the same type of derivative instrument or for different types of derivative instruments, with a single counterparty that are subject to a contractual agreement that provides for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract. 815-10-45-6. A reporting entity shall make an accounting policy decision to offset fair value amounts in the manner described in this paragraph [and should disclose that policy]. The reporting entity's choice to offset or not must be applied consistently. A reporting entity shall not offset fair value amounts recognized for derivative instruments without offsetting fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral. A reporting entity that makes an accounting policy decision to offset fair value amounts recognized for derivative instruments pursuant to the preceding paragraph but determines that the amount recognized for the right to reclaim cash collateral or the obligation to return cash collateral is not a fair value amount shall continue to offset the derivative instruments. 815-10-45-7. A reporting entity that has made an accounting policy decision to offset fair value amounts is not permitted to offset amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral against net derivative instrument positions if those amounts either: a. Were not fair value amounts b. Arose from instruments in a master netting arrangement that are not eligible to be offset. > Income Statement Classification > > Derivative Instruments Held for Trading Purposes 815-10-45-9. Gains and losses (realized and unrealized) on all derivative instruments within the scope of this Subtopic that are held for trading purposes shall be shown net when recognized in the income statement, whether or not settled physically. > > Options Granted to Employees in Unrestricted Publicly Traded Shares of an Unrelated Entity 815-10-45-10. Subsequent changes in the fair value of an option that was granted to an employee and is subject to this Subtopic shall be included in the determination of net income. Changes in fair value of the option award before vesting shall be
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Accounting Disclosure Checklist - Annual (12/10) Page 205 of 290 characterized as compensation expense in the employer's income statement. Changes in fair value of the option award after vesting may be reflected elsewhere in the employer's income statement. > Cash Flow Statement Classification > > Derivative Instrument with a Financing Element 815-10-45-12. If an other-than-insignificant financing element is present at inception— other than a financing element inherently included in an at-the-market derivative instrument with no prepayments (that is, the forward points in an at-the-money forward contract)—then the borrower shall report all cash inflows and outflows associated with that derivative instrument in a manner consistent with financing activities as described in paragraphs 230-10-45-14 through 45-15 (in this checklist). See paragraphs 815-10-45-14 to 45-15 for additional guidance on determining when a derivative instrument contains a financing element. Disclosure 815-10-50-1. An entity with derivative instruments (or nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 81520-25-58 (hedging instruments in fair value hedges involving foreign exchange risk) and 815-20-25-66 (hedging instruments in net investment hedges) shall disclose information to enable users of the financial statements to understand all of the following: a. How and why an entity uses derivative instruments (or such nonderivative instruments) b. How derivative instruments (or such nonderivative instruments) and related hedged items are accounted for under Topic 815 c. How derivative instruments (or such nonderivative instruments) and related hedged items affect all of the following: 1 An entity’s financial position 2 An entity’s financial performance 3 An entity’s cash flows. 815-10-50-1A. An entity that holds or issues derivative instruments (or nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58 and 815-20-25-66 shall disclose all of the following for every annual and interim reporting period for which a statement of financial position and statement of financial performance are presented: a. Its objectives for holding or issuing those instruments b. The context needed to understand those objectives c. Its strategies for achieving those objectives d. Information that would enable users of its financial statements to understand the volume of its activity in those instruments. 815-10-50-1B. For item (d) in the preceding paragraph, an entity shall select the format and the specifics of disclosures relating to its volume of such activity that are most relevant and practicable for its individual facts and circumstances. Information about the instruments in items (a) through (c) in the preceding paragraph shall be disclosed in the context of each instrument’s primary underlying risk exposure (for example, interest rate, credit, foreign exchange
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Accounting Disclosure Checklist - Annual (12/10) Page 206 of 290 rate, interest rate and foreign exchange rate, or overall price). Further, those instruments shall be distinguished between those used for risk management purposes and those used for other purposes. Derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58 and 815-20-25-66) used for risk management purposes include those designated as hedging instruments under Subtopic 815-20 as well as those used as economic hedges and for other purposes related to the entity’s risk exposures. 815-10-50-2. The instruments addressed by items (a) through (c) in the preceding paragraph 815-10-50-1A shall be distinguished between each of the following: a. Derivative instruments (and nonderivative instruments as noted in items (1)(a) and (1)(c) of this paragraph) used for risk management purposes, distinguished between each of the following: 1 Derivative instruments (and nonderivative instruments) designated as hedging instruments, distinguished between each of the following: a. Derivative instruments (and nonderivative instruments) designated as fair value hedging instruments b. Derivative instruments designated as cash flow hedging instruments c. Derivative instruments (and nonderivative instruments) designated as hedging instruments for hedges of the foreign currency exposure of a net investment in a foreign operation. 2 Derivative instruments used as economic hedges and for other purposes related to the entity’s risk exposures. b. Derivative instruments used for other purposes. 815-10-50-3. The description also shall indicate the entity’s risk management policy for each of those types of hedges, including a description of the items or transactions for which risks are hedged. 815-10-50-4. For derivative instruments not designated as hedging instruments under Subtopic 815-20, the description shall indicate the purpose of the derivative activity. > Overall Quantitative Disclosures 815-10-50-4A. An entity that holds or issues derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58 and 815-20-25-66) shall disclose all of the following for every annual and interim reporting period for which a statement of financial position and statement of financial performance are presented: a. The location and fair value amounts of derivative instruments (and such nonderivative instruments) reported in the statement of financial position b. The location and amount of the gains and losses on derivative instruments (and such nonderivative instruments) and related hedged items reported in any of the following: 1 The statement of financial performance. 2 The statement of financial position (for example, gains and losses initially recognized in other comprehensive income). 815-10-50-4B. The disclosures required by item (a) in the preceding paragraph shall
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Accounting Disclosure Checklist - Annual (12/10) Page 207 of 290 comply with all of the following: a. The fair value of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58, hedging instruments in fair value hedges involving foreign exchange risk, and 815-20-25-66, hedging instruments in net investment hedges) shall be presented on a gross basis, even when those instruments are subject to master netting arrangements and qualify for net presentation in the statement of financial position in accordance with Topic 210-20. b. Cash collateral payables and receivables associated with those instruments shall not be added to or netted against the fair value amounts. c. Fair value amounts shall be presented as separate asset and liability values segregated between each of the following: 1 Those instruments designated and qualifying as hedging instruments under Subtopic 815-20, presented separately by type of contract (for example, interest rate contracts, foreign exchange contracts, equity contracts, commodity contracts, credit contracts, other contracts, and so forth) 2 Those instruments not designated as hedging instruments, presented separately by type of contract. d. The disclosure shall identify the line item(s) in the statement of financial position in which the fair value amounts for these categories of derivative instruments are included. Amounts required to be reported for nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-2558 and 815-20-25-66 shall be the carrying value of the nonderivative hedging instrument, which includes the adjustment for the foreign currency transaction gain or loss on that instrument. 815-10-50-4C. The gains and losses disclosed pursuant to paragraph 815-10-50-4A(b) (in this checklist) shall be presented separately for all of the following by type of contract (as discussed in the following paragraph): a. Derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges. b. The effective portion of gains and losses on derivative instruments (and nonderivative instruments) designated and qualifying in cash flow hedges and net investment hedges that was recognized in other comprehensive income during the current period. c. The effective portion of gains and losses on derivative instruments (and nonderivative instruments) designated and qualifying in cash flow hedges and net investment hedges recorded in accumulated other comprehensive income during the term of the hedging relationship and reclassified into earnings during the current period. d. The portion of gains and losses on derivative instruments (and nonderivative instruments) designated and qualifying in cash flow hedges and net investment hedges representing any of the following: 1 The amount of the hedges’ ineffectiveness
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Accounting Disclosure Checklist - Annual (12/10) Page 208 of 290 The amount, if any, excluded from the assessment of hedge effectiveness. e. Derivative instruments not designated or qualifying as hedging instruments under Subtopic 815-20 (see paragraph 815-10-50-4F). Example 21 (see paragraph 815-10-55-182) illustrates the disclosure of fair value amounts of derivative instruments (and such nonderivative instruments) reported in the statement of financial position. 815-10-50-4D. Disclosures pursuant to the preceding paragraph shall both: a. Be presented separately by type of contract, for example: 1 Interest rate contracts 2 Foreign exchange contracts 3 Equity contracts 4 Commodity contracts 5 Credit contracts 6 Other contracts. b. Identify the line item(s) in the statement of financial performance in which the gains and losses for these categories of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58 and 815-20-25-66) are included. 815-10-50-4E. The quantitative disclosures required by paragraphs 815-10-50-4A(a) and 50-4A(b) (in this checklist) shall be presented in tabular format except for the information required for hedged items by subparagraph 815-10-50-4C(a) (in this checklist). Information about hedged items can be presented in a tabular or nontabular format. If a proportion of a derivative instrument is designated and qualifying as a hedging instrument and a proportion is not designated and qualifying as a hedging instrument, an entity shall allocate the related amounts to the appropriate categories within the disclosure table. Example 20 (see paragraph 815-10-55-181) illustrates a nontabular presentation. Example 21 (see paragraph 815-10-55-182) illustrates the disclosure of fair value amounts of derivative instruments (and such nonderivative instruments) reported in the statement of financial performance. > > Trading Derivatives 815-10-50-4F. For derivative instruments that are not designated or qualifying as hedging instruments under Subtopic 815-20, if an entity’s policy is to include those derivative instruments in its trading activities (for example, as part of its trading portfolio that includes both derivative instruments and nonderivative or cash instruments), the entity can elect to not separately disclose gains and losses as required by paragraph 815-10-50-4C(e) (in this checklist) provided that the entity discloses all of the following: a. The gains and losses on its trading activities (including both derivative instruments and nonderivative instruments) recognized in the statement of financial performance, separately by major types of items, for example:
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2

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). instead of in other comprehensive income. All not-for-profit entities also would indicate which class or classes of net assets (unrestricted. The existence and nature of credit-risk-related contingent features b. If the disclosure option in this paragraph is elected. A description of the nature of its trading activities and related risks. b. instead of in income. Not-for-profit entities not within the scope of Topic 954 shall disclose the gain or loss recognized in changes in net assets using a similar format.Accounting Disclosure Checklist . The aggregate fair value of assets that are already posted as collateral at the end of the reporting period e. and how the entity manages those risks. not-for-profit entities within the scope of Topic 954 should present a similarly formatted table. Example 21 (see paragraph 815-10-55-182) illustrates a footnote referencing the use of alternative disclosures for trading activities. and amounts outside their performance indicator. Those entities shall refer to amounts within their performance indicator. An entity that holds or issues derivative instruments (or nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58 and 815-20-25-66) shall disclose all of the following for every annual and interim reporting period for which a statement of financial position is presented: a. . temporarily restricted.Annual (12/10) Page 209 of 290 1 Fixed income/interest rates 2 Foreign exchange 3 Equity 4 Commodity 5 Credit. the entity shall include a footnote in the required tables referencing the use of alternative disclosures for trading activities. > > Application by Not-for-Profit Entities 815-10-50-4G. a Delaware limited liability partnership and the U. The circumstances in which credit-risk-related contingent features could be triggered in derivative instruments (or such nonderivative instruments) that are in a net liability position at the end of the reporting period c. All rights reserved. The aggregate fair value amounts of derivative instruments (or such nonderivative instruments) that contain credit-risk-related contingent features that are in a net liability position at the end of the reporting period d. or permanently restricted) are affected. Example 22 (see paragraph 815-10-55-184) illustrates the disclosure of the information required in items (a) and (b). a Swiss entity. The line items in the statement of financial performance in which trading activities gains and losses are included c. For purposes of the disclosure requirements beginning in paragraph 815-10-50-4A (in this checklist). > Credit-Risk-Related Contingent Features 815-10-50-4H.S. The aggregate fair value of additional assets that would be required to be posted as collateral if the credit-risk-related contingent features were triggered at the end of the reporting period ©2010 KPMG LLP.

Annual (12/10) Page 210 of 290 The aggregate fair value of assets needed to settle the instrument immediately if the credit-risk-related contingent features were triggered at the end of the reporting period. which shall not be reduced by the effect of any amounts that may possibly be recovered under recourse or collateralization provisions in the credit derivative (which are addressed in items (c) through (f)) 2 The fact that the terms of the credit derivative provide for no limitation to the maximum potential future payments under the contract. A seller of credit derivatives shall disclose information about its credit derivatives and hybrid instruments (for example. including all of the following: 1 The approximate term of the credit derivative 2 The reason(s) for entering into the credit derivative 3 The events or circumstances that would require the seller to perform under the credit derivative 4 The current status (that is. a Delaware limited liability partnership and the U. which includes the adjustment for the foreign currency transaction gain or loss on that instrument.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). financial performance. The nature of the credit derivative. if applicable ©2010 KPMG LLP. All of the following information about the maximum potential amount of future payments under the credit derivative: 1 The maximum potential amount of future payments (undiscounted) that the seller could be required to make under the credit derivative. b. If information on derivative instruments (or nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58 and 815-20-25-66 is disclosed in more than a single footnote. as of the date of the statement of financial position) of the payment/performance risk of the credit derivative. . Example 23 (see paragraph 815-10-55-185) illustrates a credit-risk-related contingent feature disclosure. a credit-linked note) that have embedded credit derivatives to enable users of financial statements to assess their potential effect on its financial position. Amounts required to be reported for nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-2558 and 815-20-25-66 shall be the carrying value of the nonderivative hedging instrument. the seller of a credit derivative shall disclose all of the following information for each credit derivative. f. how those groupings are determined and used for managing risk. for each statement of financial position presented. an entity shall cross-reference from the derivative instruments (or nonderivative instruments) footnote to other footnotes in which derivative-instrument-related information is disclosed. Specifically. > Information in More than One Footnote 815-10-50-4I. and cash flows. even if the likelihood of the seller’s having to make any payments under the credit derivative is remote: a. or each group of similar credit derivatives. > Credit Derivatives 815-10-50-4K. which could be based on either recently issued external credit ratings or current internal groupings used by the seller to manage its risk 5 If the entity uses internal groupings for purposes of item (a)(4). All rights reserved.Accounting Disclosure Checklist . a Swiss entity.

The nature of any assets held either as collateral or by third parties that. and structured finance). to ©2010 KPMG LLP. the seller can obtain and liquidate to recover all or a portion of the amounts paid under the credit derivative f. Equity price risk. a Swiss entity. Qualitative disclosures about an entity’s objectives and strategies for using derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 815-20-25-58 and 815-20-25-66) may be more meaningful if such objectives and strategies are described in the context of an entity’s overall risk exposures relating to all of the following: a. The fair value of the credit derivative as of the date of the statement of financial position d. Foreign exchange risk c. single-name credit default swaps. Those additional qualitative disclosures. should include a discussion of those exposures even though the entity does not manage some of those exposures by using derivative instruments. > Qualitative Disclosures 815-10-50-5. Commodity price risk d. the seller of the embedded credit derivative shall disclose the information required by the preceding paragraph for the entire hybrid instrument. provide additional subgroups for major types of referenced (or underlying) asset classes (for example. upon the occurrence of any specified triggering event or condition under the credit derivative. the approximate extent to which the proceeds from liquidation of assets held either as collateral or by third parties would be expected to cover the maximum potential amount of future payments under the credit derivative. 815-10-50-4L. sovereign debt. a Delaware limited liability partnership and the U. With respect to hybrid instruments that have embedded credit derivatives. All rights reserved. In its estimate of potential recoveries.Annual (12/10) Page 211 of 290 If the seller is unable to develop an estimate of the maximum potential amount of future payments under the credit derivative. One way to present the information required by the preceding paragraph for groups of similar credit derivatives would be first to segregate the disclosures by major types of contracts (for example. The nature of any recourse provisions that would enable the seller to recover from third parties any of the amounts paid under the credit derivative e. the disclosures required by this paragraph do not apply to an embedded derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another. as described in paragraph 815-15-15-9.Accounting Disclosure Checklist . 3 . traded indexes. not just the embedded credit derivatives.S. If estimable. corporate debt. the reasons why it cannot estimate the maximum potential amount. but not required. Interest rate risk b. An entity is encouraged. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). and swaptions) and then. Credit risk e. the seller of credit protection shall consider the effect of any purchased credit protection with identical underlying(s). other portfolio products. if made. However. c. for each major type.

> Balance Sheet Offsetting 815-10-50-7. a power purchase agreement entered into in connection with the financing of a generation facility subject to the disclosure requirements of Topic 440 may also meet the definition of derivative instrument in paragraphs 815-1015-83 through 15-139 and is accounted for as a derivative instrument at fair value in the balance sheet. If an unconditional purchase obligation is subject to the requirements of both Topic 440 and this Subtopic.Accounting Disclosure Checklist . > Certain Contracts on Debt and Equity Securities 815-10-50-9. A reporting entity shall disclose the amounts recognized at the end of each reporting period for the right to reclaim cash collateral or the obligation to return cash collateral as follows: a. including paragraph 440-10-50-4 (in this checklist). A reporting entity that has made an accounting policy decision to offset fair value amounts shall separately disclose amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral that have been offset against net derivative positions in accordance with paragraph 815-10-45-5. A reporting entity’s accounting policy to offset or not offset in accordance with paragraph 815-10-45-6 (in this checklist) shall be disclosed. All rights reserved. KPMG & Other Guidance 1 SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). see paragraph 505-10-50-10. November 30. A reporting entity that has made an accounting policy decision to not offset fair value amounts shall separately disclose the amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral under master netting arrangements. Components of a derivative presented in different line items or reclassified realized gains and losses of a derivative out of the line item that included unrealized gains and losses on the same derivative is ©2010 KPMG LLP. An entity shall disclose its accounting policy for the premium paid (time value) to acquire an option that is classified as held to maturity or available for sale. the entity shall comply with both sets of disclosure requirements.Annual (12/10) Page 212 of 290 provide such additional qualitative disclosures about those risks and how they are managed. > Contingently Convertible Securities 815-10-50-8A. > Unconditional Purchase Obligations 815-10-50-6. 815-10-50-8. a Swiss entity. Unrealized and realized gains and losses on derivative instruments not accounted for as hedging instruments should be recorded in the same income statement caption (SEC 2003 AICPA National Conference on Current SEC Developments). A reporting entity shall separately disclose amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral under master netting arrangements that have not been offset against net derivative instrument positions. . For example. For guidance on disclosures of information about derivative transactions entered into in connection with the issuance of the contingently convertible securities. b. a Delaware limited liability partnership and the U. 2006. c.S.

Early adoption is permitted. disclose separately the gross gains and gross losses that represent the adjustment related to the election of the fair value option and the adjustment related to the pro forma bifurcation for those hybrids for which the fair value option was not elected. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). • If separate accounting for the host contract and a derivative instrument is required. No cumulative-effect adjustment to beginning retained earnings for the period of adoption is warranted. .S. determined on an instrument-by-instrument basis. An entity may. Any contract contains embedded derivative features that have previously been bifurcated and accounted for separately but are no longer subject to the application of paragraph 815-10-15-11 and Section 815-15-25 for potential bifurcation under the scope exception in paragraph 815-15-15-9. a Swiss entity. 2010. At the date of adoption. If the fair value option is elected at adoption for any investment.Accounting Disclosure Checklist . a Delaware limited liability partnership and the U. an entity shall assess each preexisting contract that was acquired. the carrying amount of the combined hybrid instrument at adoption should be the total carrying amount of the individual components of the preexisting bifurcated hybrid financial instrument.Annual (12/10) Page 213 of 290 inappropriate. Disclose any associated hedging strategies (economic or accounting) to describe how the entity manages the risk associated with issuing loan commitments and its operations. 2. the cumulative unrealized gains and losses at that date shall be included in the cumulative-effect adjustment to beginning retained earnings for the period of adoption. the carrying amount of the host contract upon adoption of this ASU should be based on a pro forma bifurcation as of the inception of the hybrid contract and the host contract’s subsequent accounting to the date of adoption. issued. Upon adoption of ASU 2010-11. An entity shall separately disclose the gross gains and gross losses that make up the cumulative-effect adjustment. For any contract containing embedded derivative features that have previously been bifurcated but are no longer subject to the application of paragraph 815-10-15-11 and Section 815-15-25. paragraph 815-10-50-4K is amended to read as follows: > Credit Derivatives ©2010 KPMG LLP. 1. an entity may elect the fair value option for any investment in a beneficial interest in a securitized financial asset. At the date of adoption. or subject to a remeasurement event occurring after the entity’s adoption of Statement 155 to determine whether: • Any contract for which the fair value option has not been elected contains one or more embedded credit derivative features that no longer qualify for the scope exception in paragraph 815-15-15-9. Any difference between the total carrying amount of the components of the newly bifurcated hybrid instrument and the carrying amount of the hybrid instrument before bifurcation should be recognized as a cumulative-effect adjustment to beginning retained earnings for the period of adoption. All rights reserved. 2 Pending Content ASU 2010-11 is effective for the first fiscal quarter that begins after June 15. but is not required to.

the seller can obtain and liquidate to recover all or a portion of the amounts paid under the credit derivative f. how those groupings are determined and used for managing risk. All rights reserved. if applicable 3 If the seller is unable to develop an estimate of the maximum potential amount of future payments under the credit derivative. and cash flows. If estimable. including all of the following: 1 The approximate term of the credit derivative 2 The reason(s) for entering into the credit derivative 3 The events or circumstances that would require the seller to perform under the credit derivative 4 The current status (that is.Annual (12/10) Page 214 of 290 815-10-50-4K. a credit-linked note) that have embedded credit derivatives to enable users of financial statements to assess their potential effect on its financial position. which shall not be reduced by the effect of any amounts that may possibly be recovered under recourse or collateralization provisions in the credit derivative (which are addressed in items (c) through (f)) 2 The fact that the terms of the credit derivative provide for no limitation to the maximum potential future payments under the contract. for each statement of financial position presented. The fair value of the credit derivative as of the date of the statement of financial position d. The nature of any assets held either as collateral or by third parties that. the approximate extent to which the proceeds from liquidation of assets held either as collateral or by third parties would be expected to cover the maximum potential amount of future payments under the credit derivative. . financial performance. In its estimate of potential recoveries. c. A seller of credit derivatives shall disclose information about its credit derivatives and hybrid instruments (for example. as of the date of the statement of financial position) of the payment/performance risk of the credit derivative. or each group of similar credit derivatives. a Swiss entity. All of the following information about the maximum potential amount of future payments under the credit derivative: 1 The maximum potential amount of future payments (undiscounted) that the seller could be required to make under the credit derivative. even if the likelihood of the seller’s having to make any payments under the credit derivative is remote: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the seller of credit protection shall consider the effect of any purchased credit protection with ©2010 KPMG LLP. a Delaware limited liability partnership and the U. Specifically. b. which could be based on either recently issued external credit ratings or current internal groupings used by the seller to manage its risk 5 If the entity uses internal groupings for purposes of item (a)(4). the seller of a credit derivative shall disclose all of the following information for each credit derivative.Accounting Disclosure Checklist . upon the occurrence of any specified triggering event or condition under the credit derivative. The nature of the credit derivative. The nature of any recourse provisions that would enable the seller to recover from third parties any of the amounts paid under the credit derivative e.S. the reasons why it cannot estimate the maximum potential amount.

101 Subtopic 815-15: Derivatives and Hedging—Embedded Derivatives Note: ASU 2010-08. a Swiss entity. as described in paragraph 815-15-15-9. a Delaware limited liability partnership and the U. the disclosures required by this paragraph do not apply to an embedded derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another.S. However. 815-15-50-2. An issuer shall disclose both of the following for the period in which an embedded conversion option previously accounted for as a derivative instrument under this Subtopic no longer meets the separation criteria under this Subtopic: ©2010 KPMG LLP.Accounting Disclosure Checklist . In each statement of financial position presented. Display separate line items for the fair value and non-fair-value carrying amounts b. may cause a change in the application of that Subtopic. certain clarifications made to Subtopic 815-15. To accomplish that separate reporting. 2009. For those hybrid financial instruments measured at fair value under the election and under the practicability exception in paragraph 815-15-30-1. and provide clarification of the Board’s original intent in certain areas. Present the aggregate of the fair value and non-fair-value amounts and parenthetically disclose the amount of fair value included in the aggregate amount.S. While none of the provisions fundamentally change U. GAAP. an entity shall also disclose the information specified in paragraphs 825-10-50-28 through 50-32 (in this checklist). Presentation 815-15-45-1. Derivatives and Hedging—Embedded Derivatives. All rights reserved. Disclosure > Hybrid Instruments that Are Not Separated 815-15-50-1. an entity may do either of the following: a. Technical Corrections to Various Topics amends the Codification to eliminate inconsistencies. 25-42. For more information refer to ASU 2010-08. > Embedded Conversion Option that Is No Longer Bifurcated 815-15-50-3.Annual (12/10) Page 215 of 290 identical underlying(s). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). . remove outdated provisions. and 55-13 and are effective for fiscal years beginning after December 15. The amendments affect paragraphs 815-15-25-26. An entity shall provide information that will allow users to understand the effect of changes in the fair value of hybrid financial instruments measured at fair value under the election and under the practicability exception in paragraph 815-15-30-1 on earnings (or other performance indicators for entities that do not report earnings). an entity shall report hybrid financial instruments measured at fair value under the election and under the practicability exception in paragraph 815-15-30-1 in a manner that separates those reported fair values from the carrying amounts of assets and liabilities subsequently measured using another measurement attribute on the face of the statement of financial position.

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the policy should be disclosed in the notes to the financial statements. See Section 815-10-50 (in this checklist) for overall guidance on disclosures. 815-25-50-1. see paragraph 815-10-50-5 (in this checklist). see paragraph 860-50-50-2(b) (in this checklist). 815-25-50-2. The amount of the liability for the conversion option reclassified to stockholders' equity.Annual (12/10) Page 216 of 290 a. see paragraph 860-50-50-2 (in this checklist). SEC Guidance 1 SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. An alternative is to present the embedded derivative instrument separately from the host contract. a Delaware limited liability partnership and the U. .Accounting Disclosure Checklist . if any. An entity’s disclosures for every annual and interim reporting period for which a statement of financial position and a statement of financial performance is presented shall include both of the following for derivative instruments. a Swiss entity. For guidance on disclosures about instruments used to mitigate the income statement effect of changes in fair value of servicing assets and servicing liabilities. November 30. Regardless of the presentation alternative chosen. ©2010 KPMG LLP. Classify the effective portion of the gain or loss on a derivative hedging instrument in the same income statement line as the hedged item. excluded from the assessment of hedge effectiveness. that have been designated and have qualified as fair value hedging instruments and for the related hedged items: a. as well as nonderivative instruments that may give rise to foreign currency transaction gains or losses under Subtopic 830-20. The amount of net gain or loss recognized in earnings when a hedged firm commitment no longer qualifies as a fair value hedge. For guidance on encouraged disclosure of quantitative information about instruments used to manage the risks inherent in servicing assets and servicing liabilities. 102 Subtopic 815-25: Derivatives and Hedging—Fair Value Hedging Disclosure 815-20-50-1. A description of the principal changes causing the embedded conversion option to no longer require bifurcation under this Subtopic b. All rights reserved. KPMG & Other Guidance 1 KPMG Derivatives and Hedging Accounting Handbook: Most entities will follow the legal form of the instrument such that the carrying amount of the hybrid instrument will reflect the aggregate carrying amount of the host contract (as determined by the accounting standards applicable to instruments of that type) and the fair value of the embedded derivative instrument. For guidance on qualitative disclosures. 2006. b.S. The net gain or loss recognized in earnings during the reporting period representing both of the following: 1 The amount of the hedges’ ineffectiveness 2 The component of the derivative instruments’ gain or loss.

As part of the disclosures of accumulated other comprehensive income. ©2010 KPMG LLP. see paragraph 815-10-50-5 (in this checklist). and the ineffective portion is reported in earnings.S. Disclosure 815-30-50-1. The maximum length of time over which the entity is hedging its exposure to the variability in future cash flows for forecasted transactions excluding those forecasted transactions related to the payment of variable interest on existing financial instruments e. an entity shall separately disclose all of the following: a. a Swiss entity. SEC Guidance 1 SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. See Section 815-10-50 (in this checklist) for overall guidance on disclosures. A description of the transactions or other events that will result in the reclassification into earnings of gains and losses that are reported in accumulated other comprehensive income c. The net amount of any reclassification into earnings. 815-30-50-3. Classify the effective portion of the gain or loss on a derivative hedging instrument in the same income statement line as the hedged item. 815-30-50-2. a Delaware limited liability partnership and the U. The amount of gains and losses reclassified into earnings as a result of the discontinuance of cash flow hedges because it is probable that the original forecasted transactions will not occur by the end of the originally specified time period or within the additional period of time discussed in paragraphs 815-30-40-4 through 40-5. .Accounting Disclosure Checklist . The related net change associated with current period hedging transactions c. All rights reserved.Annual (12/10) Page 217 of 290 103 Subtopic 815-30: Derivatives and Hedging—Cash Flow Hedges Presentation > Other Comprehensive Income 815-30-45-1. For guidance on qualitative disclosures. 2006. The estimated net amount of the existing gains or losses that are reported in accumulated other comprehensive income at the reporting date that is expected to be reclassified into earnings within the next 12 months d. An entity shall display as a separate classification within other comprehensive income the net gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments that are reported in comprehensive income. November 30. pursuant to paragraph 220-10-45-14. The effective portion of the gain or loss on a derivative instrument designated as a cash flow hedge is reported in other comprehensive income. An entity’s disclosures for every annual and interim reporting period for which a statement of financial position and a statement of financial performance is presented shall include all of the following for derivative instruments that have been designated and have qualified as cash flow hedging instruments and for the related hedged transactions: a. The beginning and ending accumulated derivative instrument gain or loss b. [not used] b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

Accordingly. to present a more complete picture of its activities by disclosing that information. see paragraph 815-10-50-5 (in this checklist). 815-25-50. Contracts within the scope of this Subtopic may be required to be reclassified into (or out of) equity during the life of the instrument (in whole or in part) pursuant to the provisions of paragraphs 815-40-35-8 through 35-13. if similar information is disclosed about other financial instruments or nonfinancial assets and liabilities to which the derivative instruments are related by activity. . 815-30-50.S. but not required.Accounting Disclosure Checklist . and the effect on the issuer's financial statements. the pertinent information to be disclosed under Section 505-10-50 (in this checklist) about the contract includes all of the following: 1 The forward rate 2 The option strike price 3 The number of issuer's shares to which the contract is indexed 4 The settlement date or dates of the contract 5 The issuer's accounting for the contract (that is. and 815-35-50 (in this checklist) also are required for those contracts. The related disclosures that are required by Sections 815-10-50. For guidance on qualitative disclosures. or 105 ©2010 KPMG LLP. All rights reserved. Subtopic 815-40: Derivatives and Hedging—Contracts in Entity’s Own Equity Disclosure 815-40-50-1. an entity is encouraged. liability. > Reclassifications and Related Accounting Policy Disclosures 815-40-50-3. 815-40-50-4. as an asset. 815-40-50-2. > Interaction with Disclosures About Capital Structure 815-40-50-5. a Delaware limited liability partnership and the U. In the case of an option or forward contract indexed to the issuer's equity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The disclosures required by Section 505-10-50 (in this checklist) apply to all contracts within the scope of this Subtopic as follows: a. An issuer shall disclose contract reclassifications (including partial reclassifications). the reason for the reclassification. Some contracts within the scope of this Subtopic that are classified as assets or liabilities meet the definition of a derivative instrument under the provisions of Subtopic 815-10. in those situations. and less likely to be perceived to be out of context or otherwise misunderstood. Changes in the fair value of all contracts within the scope of this Subtopic classified as assets or liabilities shall be disclosed in the financial statements as long as the contracts remain classified as assets or liabilities. a Swiss entity.Annual (12/10) Page 218 of 290 104 Subtopic 815-35: Derivatives and Hedging—Net Investment Hedges Disclosure 815-35-50-2. The quantitative disclosures about derivative instruments may be more useful. The determination of how to partially reclassify contracts subject to this Subtopic is an accounting policy decision that shall be disclosed pursuant to Topic 235.

Price at which warrant or right is exercisable. as relevant. c. 2 SEC Comment Letters. If the terms of the contract provide settlement alternatives. . The disclosures required by paragraph 505-10-50-11 (in this checklist) shall be made for any equity instrument in the scope of this Subtopic that is (or would be if the issuer were a public entity) classified as temporary equity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Disclose the purpose of issuing warrants to nonemployees. regardless of whether the private entity chooses to classify those securities as temporary equity.S. Paragraph 505-10-50-3 (in this checklist) requires additional disclosures for actual issuances and settlements that occurred during the accounting period. (That paragraph applies to redeemable stock issued by nonpublic entities. (in this checklist) including both of the following: 1 Who controls the settlement alternatives 2 The maximum number of shares that could be required to be issued to net share settle a contract. A contract's current fair value for each settlement alternative (denominated. a tabular format may provide the most concise and informative presentation of these data. ©2010 KPMG LLP.Annual (12/10) Page 219 of 290 equity). KPMG & Other Guidance > Warrants or Rights Outstanding 1 SEC Comment Letters. if applicable. related to the warrants or rights and the line item(s) on the income statement that include such costs. All rights reserved. Title of issue of securities called for by warrants or rights. the issuer is obligated to issue an additional X shares or pay an additional Y dollars in cash for each $1 decrease in stock price) shall be disclosed under Section 505-10-50 (in this checklist). b. Date from which warrants or rights are exercisable d.) e. if any. in monetary amounts or quantities of shares) and how changes in the price of the issuer's equity instruments affect those settlement amounts (for example. the fact that a potentially infinite number of shares could be required to be issued to settle the contract shall be disclosed under Section 505-10-50 (in this checklist). a Swiss entity. a Delaware limited liability partnership and the U. d.Accounting Disclosure Checklist . (For some issuers. those settlement alternatives shall be disclosed under Section 505-10-50. Disclose the expense (or revenue offset) recognized. If a contract does not have a fixed or determinable maximum number of shares that may be required to be issued. Information with respect to warrants or rights outstanding at the date of the related balance sheet shall be set forth as follows: a. b.) SEC Guidance > Warrants or Rights Outstanding 1 Regulation S-X Rule 4-08(i). Aggregate amount of securities called for by warrants or rights outstanding c.

the reporting entity shall disclose all of the information in (a) through (e) below for each interim and annual period separately for each class of assets and liabilities. Significant transfers into ©2010 KPMG LLP. Early adoption is permitted.S. 820-10-50-2. and for interim periods within those fiscal years. The fair value measurement at the reporting date. . except the disclosures about purchases. Disclosure > Recurring Measurements 820-10-50-1. To meet the objectives of the preceding paragraph. The reporting entity shall determine the appropriate classes of assets and liabilities on the basis of the guidance in the following paragraph. issuances. and settlements in the roll forward of activity in Level 3 fair value measurements (see subparagraph 820-10-50-2(c)(2)). For recurring fair value measurements using significant unobservable inputs (Level 3). The amounts of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for the transfers. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). In periods after the initial adoption. entities are not required to include disclosures for ASU 2010-06 for previous comparative periods. 2010. b. the valuation techniques and inputs used to develop those measurements b. comparative disclosures under ASU 2010-06 are required only for periods ending after the initial adoption. In the initial adoption period. Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. Those disclosures are effective for fiscal years beginning after December 15. For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition (for example.Accounting Disclosure Checklist . segregating the fair value measurement using any of the following: 1 2 3 Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3). which is effective for interim and annual reporting periods beginning after December 15. The level within the fair value hierarchy in which the fair value measurement in its entirety falls. the effect of the measurements on earnings (or changes in net assets) for the period. bb.Annual (12/10) Page 220 of 290 106 Subtopic 820-10: Fair Value Measurements and Disclosures—Overall Note: The content of the Subtopic has been updated for ASU 2010-06. It shall provide sufficient information to permit reconciliation of the fair value measurement disclosures for the various classes of assets and liabilities to the line items in the statement of financial position a. a Swiss entity. All rights reserved. trading securities). 2009. a Delaware limited liability partnership and the U. The reporting entity shall disclose information that enables users of its financial statements to assess both of the following: a. sales.

The policy about the timing of recognizing transfers shall be the same for transfers into Level 3 as that for transfers out of Level 3. a Delaware limited liability partnership and the U.Annual (12/10) Page 221 of 290 each level shall be disclosed separately from transfers out of each level. and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities) or in other comprehensive income Purchases. when changes in fair value are recognized in other comprehensive income. For this purpose. Significant transfers into Level 3 shall be disclosed separately from significant transfers out of Level 3. and for interim periods within those fiscal years. sales. . separately presenting changes during the period attributable to any of the following: 1 Total gains or losses for the period (realized and unrealized). Examples of policies for when to recognize the transfers are as follows: 1 2 3 The actual date of the event or change in circumstances that caused the transfer The beginning of the reporting period The end of the reporting period. A reporting entity shall disclose and consistently follow its policy for determining when transfers between levels are recognized. issuances. For this purpose. The beginning of the reporting period iii. separately presenting gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income. Early adoption is permitted. Examples of policies for when to recognize the transfers are as follows: The actual date of the event or change in circumstances that caused the transfer 2 3 i. ii. and settlements (each type disclosed separately). significance shall be judged with respect to earnings and total assets or total liabilities or. The policy about the timing of recognizing transfers shall be the same for transfers into the levels as that for transfers out of the levels. All rights reserved. 2010. with respect to total equity. with respect to total equity. when changes in fair value are recognized in other comprehensive income. Transfers in and/or out of Level 3 and the reasons for those transfers. Note: The requirement in this subparagraph to disclose each type separately is effective for fiscal years beginning after December 15.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist . A reporting entity shall disclose and consistently follow its policy for determining when transfers between levels are recognized. The end of the reporting period ©2010 KPMG LLP. c. significance shall be judged with respect to earnings and total assets or total liabilities or. a Swiss entity. a reconciliation of the beginning and ending balances. For fair value measurements using significant unobservable inputs (Level 3).

changing from a market approach to an income approach or the use of an additional valuation technique). such as the market approach. the guidance on major security type in paragraph 942-320-50-2 applies. Residential mortgage-backed securities g. If there has been a change in the valuation technique(s) (for example.S. For fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). shall be the same as the guidance on major security type as described in paragraph 942-32050-2 even if the equity securities or debt securities are not within the scope of paragraph 320-10-50-1B. financial institutions shall include in their disclosure all of the following major security types. b. a description of the valuation technique (or multiple valuation techniques) used. 820-10-50-2A.S. For entities within the scope of Topic 942. Debt securities issued by the U. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). government corporations and agencies c. The amount of the total gains or losses for the period in (c)(1) included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities). Debt securities issued by states of the United States and political subdivisions of the states d. a Delaware limited liability partnership and the U. Debt securities issued by foreign governments e. a Swiss entity. Corporate debt securities f. the reporting entity shall disclose that change and the reason for making it. class shall be determined on the basis of the nature and risks of the investments in a manner consistent with the guidance in paragraph 320-10-50-1B (in this checklist) and.Annual (12/10) Page 222 of 290 d. income approach. For examples of disclosures that a reporting entity may present to comply with the requirement to disclose the inputs used in measuring fair value in this paragraph. Equity securities. For equity and debt securities. or the cost approach. All rights reserved. Commercial mortgage-backed securities ©2010 KPMG LLP. if applicable. and the inputs used in determining the fair values of each class of assets or liabilities. Under that guidance. Financial Services—Depository and Lending. e. . Treasury and other U. segregated by any one of the following: 1 2 3 Industry type Entity size Investment objective.Accounting Disclosure Checklist . although additional types also may be necessary: a.S. see paragraphs 820-10-55-22A through 55-22B.

(Shared) activity or business sector b. The fair value disclosures required by paragraphs 820-10-50-2(a) through (bb) (in this checklist) on a gross basis (which is consistent with the requirement of paragraph 815-10-50-4B(a) in this checklist) ©2010 KPMG LLP. the reporting entity shall consider the level of disaggregated information required for specific assets and liabilities under other Topics. The classification of the asset or liability in the fair value hierarchy also shall affect the level of disaggregation because of the different degrees of uncertainty and subjectivity involved in Level 1. For example. . the guidance on major security type in paragraph 320-1050-1B applies. 2. For derivative assets and liabilities. For example. Under that guidance. a Delaware limited liability partnership and the U. commodity contracts. Levels 1. and Level 3 measurements. 820-10-50-3. foreign exchange contracts. Level 2. Collateralized debt obligations i. Fair value measurement disclosures for each class of assets and liabilities often will require greater disaggregation than the reporting entity’s line items in the statement of financial position. equity contracts. Credit quality e. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Geographic concentration d.S. In determining whether disclosure for a particular security type is necessary and whether it is necessary to further separate a particular security type into greater detail. In determining the appropriate classes for fair value measurement disclosures. and 3). Level 3 measurements) to achieve the disclosure objectives because Level 3 measurements have a greater degree of uncertainty and subjectivity. the number of classes may need to be greater for fair value measurements using significant unobservable inputs (that is. For all other assets and liabilities. All rights reserved. For all other entities. Economic characteristic.Accounting Disclosure Checklist . A reporting entity shall determine the appropriate classes for those disclosures on the basis of the nature and risks of the assets and liabilities and their classification in the fair value hierarchy (that is. under Topic 815. major security types shall be based on the nature and risks of the security. an entity shall consider all of the following: a. judgment is needed to determine the appropriate classes of assets and liabilities for which disclosures about fair value measurements should be provided. Vintage c. a Swiss entity. Other debt obligations. disclosures about derivative instruments are presented separately by type of contract such as interest rate contracts. and credit contracts.Annual (12/10) Page 223 of 290 h. the reporting entity shall present both of the following: a.

the unit of accounting for a liability measured or disclosed at fair value does not include the third-party credit enhancement. > Liability Issued with an Inseparable Third-Party Credit Enhancement 820-10-50-4A. or (c) a credit enhancement provided between entities under common control. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The level within the fair value hierarchy in which the fair value measurement in its entirety falls. the disclosure required by paragraph 820-10-50-2(e) (in this checklist). > Fair Value Measurements of Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) ©2010 KPMG LLP. Paragraph 820-10-35-18A states that. To meet that objective. Cases A and B (see paragraphs 820-10-55-60 through 55-63) illustrate disclosures about recurring measurements. For fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). a. [Not used] d. 820-10-50-6. The reconciliation disclosure required by paragraph 820-10-50-2(c) through (d) (in this checklist) on either a gross or a net basis. The fair value measurement recorded during the period and the reasons for the measurement b. (b) a credit enhancement provided between a parent and its subsidiary. the reporting entity shall disclose information that enables users of its financial statements to assess the valuation techniques and inputs used to develop those measurements. Example 8. Case C (see paragraph 820-10-55-64) illustrates disclosures about nonrecurring measurements. For a liability issued with an inseparable third-party credit enhancement that is measured or disclosed at fair value on a recurring basis and that is not (a) a credit enhancement provided by a government or government agency (for example.Annual (12/10) Page 224 of 290 b. For assets and liabilities that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example. a Swiss entity. c.Accounting Disclosure Checklist . impaired assets). deposit insurance). the reporting entity shall disclose all of the following information for each interim and annual period separately for each class of assets and liabilities.S. 820-10-50-4. for the issuer. > Nonrecurring Measurements 820-10-50-5. . an issuer shall disclose the existence of a third-party credit enhancement on its issued liability. Example 8. a Delaware limited liability partnership and the U. The reporting entity shall determine classes of assets and liabilities on the basis of the guidance in paragraph 820-10-50-2A. segregating the fair value measurement using any of the following: 1 2 3 Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3). All rights reserved.

S. d. and a description of the significant investment strategies of the investee(s) in the class. investments subject to a lockup or gate). the reporting entity’s estimate of the period of time over which the underlying assets are expected to be liquidated by the investees. The circumstances in which an otherwise redeemable investment in the class (or a portion thereof) might not be redeemable (for example. To meet that objective.Accounting Disclosure Checklist . c. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the reporting entity shall disclose all of the following information for each interim and annual period separately for each class of investment (class of investment shall be determined on the basis of the nature and risks of the investments in a manner consistent with the guidance for major security types in paragraph 320-10-50-1B in this checklist): a. A general description of the terms and conditions upon which the investor may redeem investments in the class (for example. Also. All rights reserved. h. . g. the reporting entity shall disclose its estimate of when the restriction from redemption might lapse. f. to the extent applicable. the reporting entity shall disclose the total fair value of all investments that meet the criteria in paragraph 820-10-35-62 and any remaining actions required to complete the sale. quarterly redemption with 60 days’ notice). a Delaware limited liability partnership and the U. such as member units or an ownership interest in partners’ capital to which a proportionate share of net assets is attributed). For each class of investment that includes investments that can never be redeemed with the investees. If a group of investments would otherwise meet the criteria in paragraph ©2010 KPMG LLP. e. If an estimate cannot be made. For investments that are within the scope of paragraphs 820-10-15-4 through 15-5 (in this checklist) (regardless of whether the practical expedient in paragraph 820-10-35-59 has been applied) and measured at fair value on a recurring or nonrecurring basis during the period. The amount of the reporting entity’s unfunded commitments related to investments in the class. but the reporting entity receives distributions through the liquidation of the underlying assets of the investees. a Swiss entity. Any other significant restriction on the ability to sell investments in the class at the measurement date. b. for those otherwise redeemable investments that are restricted from redemption as of the reporting entity’s measurement date. the reporting entity shall disclose that fact and how long the restriction has been in effect. The fair value (as determined by applying paragraphs 820-10-35-59 through 35-62) of the investments in the class. If a reporting entity determines that it is probable that it will sell an investment(s) for an amount different from net asset value per share (or its equivalent) as described in paragraph 820-10-35-62. the reporting entity shall disclose information that enables users of its financial statements to understand the nature and risks of the investments and whether the investments are probable of being sold at amounts different from net asset value per share (or its equivalent.Annual (12/10) Page 225 of 290 820-10-50-6A.

if a reporting entity decides to sell 20 percent of its investments in private equity funds but the individual investments to be sold have not been identified). The reporting entity is encouraged. the disclosures required in paragraphs 715-20-50-1(d) and 715-20-50-5(c) (in this checklist) shall apply for fair value measurements of plan assets of a defined benefit pension or other postretirement plan. Plan assets of a defined benefit pension or other postretirement plan that are accounted for under Topic 715 are not subject to the disclosure requirements in paragraphs 820-10-50-1 through 50-9 (in this checklist). As discussed in paragraph 250-10-50-5. the reporting entity shall disclose its plans to sell and any remaining actions required to complete the sale(s). inventories measured at market value under Topic 330). . Section 825-10-50) in the periods in which those disclosures are required.Accounting Disclosure Checklist . KPMG & Other Guidance 1 The SEC staff has provided guidance in a Dear CFO letter on disclosures related to fair value measurements that may be appropriate in MD&A and an update of the Dear CFO letter issued in September 2008. the disclosure provisions of Topic 250 for a change in accounting estimate are not required for revisions resulting from a change in a valuation technique or its application. so the investments continue to qualify for the practical expedient in paragraph 820-10-35-59. but not required.S. 107 Subtopic 825-10: Financial Instruments—Overall Disclosure > Applicability of this Subsection > > Entities 825-10-50-3. a Delaware limited liability partnership and the U. > Tabular Format Required 820-10-50-8 The quantitative disclosures required by this Subtopic shall be presented using a tabular format. Combine the fair value information disclosed under this Subtopic with the fair value information disclosed under other Subtopics (for example. Disclose information about other similar measurements (for example. Instead.) > Relation to Other Disclosure Requirements 820-10-50-9. a Swiss entity. 820-10-50-10. the disclosure guidance in this Subsection applies to all entities but is optional for an entity that meets all of the following criteria: ©2010 KPMG LLP. (See Example 8 [paragraph 820-10-55-60]. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). All rights reserved. if practicable. to: a. if practicable b. For annual reporting periods.Annual (12/10) Page 226 of 290 820-10-35-62 but the individual investments to be sold have not been identified (for example. > Changes in Valuation Techniques or Their Application 820-10-50-7.

postemployment benefits.S. 825-10-50-5. other postretirement benefits including health care and life insurance benefits. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 825-10-50-7. If disclosures are required in the current period. b. this Subsection requires disclosures about fair value for all financial instruments. 825-10-50-4. The entity’s total assets are less than $100 million on the date of the financial statements. c. Employers’ and plans’ obligations for pension benefits. in whole or in part. 712. is accounted for as a derivative instrument under Topic 815 other than commitments related to the origination of mortgage loans to be held for sale during the reporting period. The criteria in the preceding paragraph shall be applied to the most recent year presented in comparative financial statements to determine applicability of this Subsection. disclosures that have not been reported previously need not be included in financial statements that are presented for comparative purposes.Accounting Disclosure Checklist . The entity has no instrument that. whether recognized or not recognized in the statement of financial position. The entity is a nonpublic entity. 825-10-50-6. employee stock option and stock purchase plans. If disclosures are not required in the current period. 715. the disclosures for previous years may be omitted if financial statements for those years are presented for comparative purposes. and other forms of deferred compensation arrangements (see Topics 710. . a Delaware limited liability partnership and the U. a Swiss entity.Annual (12/10) Page 227 of 290 a. 718. and 960) b. In part. except that the disclosures about fair value prescribed in paragraphs 825-10-50-10 through 50-16 (in this checklist) are not required for any of the following: a. All rights reserved. The following table clarifies the requirements for disclosures if prior periods are presented in comparative financial statements. If Disclosures for the Current Period Are: And Disclosures for Prior Periods Were: Then Disclosures for Prior Periods Presented in Comparative Statements Are: Optional Optional Optional Required Optional Optional Required Required > Transactions Optional Required Optional Required 825-10-50-8. Substantively extinguished debt subject to the disclosure requirements of Subtopic 405-20 ©2010 KPMG LLP.

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Equity instruments issued by the entity and classified in stockholders’ equity in the statement of financial position (see Topic 505).) e. > Fair Value of Financial Instruments 825-10-50-10. 825-10-50-12.Annual (12/10) Page 228 of 290 c.Accounting Disclosure Checklist .S. Whether the fair value and carrying amount represent assets or liabilities b. . one of the notes shall include a summary table. a Swiss entity. as discussed in Subtopic 944-20 d. This Subtopic does not prohibit an entity from disclosing separately the estimated fair value of any of its nonfinancial intangible and tangible assets and ©2010 KPMG LLP. Fair value disclosed in the notes shall be presented together with the related carrying amount in a form that clarifies both of the following: a. 825-10-50-11. A description of the changes in the method(s) and significant assumptions used to estimate the fair value of financial instruments. if any. the fair value of financial instruments for which it is practicable to estimate that value b. Either in the body of the financial statements or in the accompanying notes. Noncontrolling interests and equity investments in consolidated subsidiaries (see Topic 810) i. the disclosure requirements of Topic 820 also apply. Warranty obligations (see Topic 450) and the Product Warranties Subsections of Topic 460. If the fair value of financial instruments is disclosed in more than a single note. other than financial guarantees (including financial guarantee insurance contracts within the scope of Topic 944) and investment contracts. during the period. The method(s) and significant assumptions used to estimate the fair value of financial instruments c. f. Lease contracts as defined in Topic 840 (A contingent obligation arising out of a cancelled lease and a guarantee of a third-party lease obligation are not lease contracts and are subject to the disclosure requirements in this Subsection. Unconditional purchase obligations as defined in paragraph 440-10-50-2 (in this checklist) g. 825-10-50-13. For financial instruments recognized at fair value in the statement of financial position. Investments accounted for under the equity method in accordance with the requirements of Topic 323 h. All rights reserved. How the carrying amounts relate to what is reported in the statement of financial position. The summary table shall contain the fair value and related carrying amounts and cross-references to the location(s) of the remaining disclosures required by this Section. a Delaware limited liability partnership and the U. Insurance contracts. An entity shall disclose all of the following: a.

if any. 825-10-50-15. or economic characteristic that identifies the concentration b. The maximum amount of loss due to credit risk that. All rights reserved. Information about the (shared) activity. please see paragraphs 825-10-50-17 through 50-19. The reasons why it is not practicable to estimate fair value. Note: For the definition of “practicable” in the context of this Subtopic. region. The exceptions for master netting arrangements in paragraph 815-10-45-5 and for amounts related to certain repurchase and reverse repurchase agreements in paragraphs 210-20-45-11 through 45-17. If it is not practicable for an entity to estimate the fair value of a financial instrument or a class of financial instruments. > Concentrations of Credit Risk of All Financial Instruments 825-10-50-20. 825-10-50-21. both of the following shall be disclosed: a. a Delaware limited liability partnership and the U. 825-10-50-16. the term financial instruments includes derivative instruments accounted for under Topic 815. a Swiss entity. an entity shall not net that fair value with the fair value of other financial instruments—even if those financial instruments are of the same class or are otherwise considered to be related (for example. all of the following shall be disclosed about each significant concentration: a. an entity shall disclose all significant concentrations of credit risk arising from all financial instruments. Except as indicated in paragraph 825-10-50-22 (in this checklist). the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). whether from an individual counterparty or groups of counterparties. In disclosing the fair value of a financial instrument.S. For trade receivables and payables. The general principle in paragraph 210-20-45-1 b. by a risk management strategy)—except to the extent that the offsetting of carrying amounts in the statement of financial position is permitted under either of the following: a. effective interest rate. no disclosure is required under this Subtopic if the carrying amount approximates fair value.Accounting Disclosure Checklist . 825-10-50-14. Throughout paragraphs 825-10-50-20 and 50-21. based on the gross fair value of the financial instrument. .Annual (12/10) Page 229 of 290 nonfinancial liabilities. for the amount due proved to be of no value to the entity ©2010 KPMG LLP. Except as indicated in the following paragraph. Group concentrations of credit risk exist if a number of counterparties are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Information pertinent to estimating the fair value of that financial instrument or class of financial instruments (such as the carrying amount. and maturity) b.

(c). The requirements of the preceding paragraph do not apply to the following financial instruments. Possibilities include disclosing any of the following: a. whether written or held: a. This list is not exhaustive. The financial instruments described in paragraphs 825-10-50-8(a). a Delaware limited liability partnership and the U. The duration of the financial instruments e. or annual income. to disclose quantitative information about the market risks of financial instruments that is consistent with the way it manages or adjusts those risks. all of the following: 1 2 3 The entity’s policy of requiring collateral or other security to support financial instruments subject to credit risk Information about the entity’s access to that collateral or other security The nature and a brief description of the collateral or other security supporting those financial instruments. More details about current positions and perhaps activity during the period b. Financial instruments of a pension plan. a Swiss entity. An entity is encouraged. > Market Risk of All Financial Instruments 825-10-50-23. The entity’s value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year. of several possible changes in market prices c.Annual (12/10) Page 230 of 290 c. All rights reserved. including the extent to which they would reduce the entity’s maximum amount of loss due to credit risk.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Accounting Disclosure Checklist . With respect to collateral. d. and (f) (in this checklist). (e). if subject to the accounting and reporting requirements of Topic 715. The hypothetical effects on comprehensive income (or net assets). The entity’s policy of entering into master netting arrangements to mitigate the credit risk of financial instruments Information about the arrangements for which the entity is a party A brief description of the terms of those arrangements. ©2010 KPMG LLP. but not required. Appropriate ways of reporting that quantitative information will differ for different entities and will likely evolve over time as management approaches and measurement techniques evolve. including plan assets. all of the following: 1 2 3 825-10-50-22. With respect to master netting arrangements. and an entity is encouraged to develop other ways of reporting quantitative information. except for reinsurance receivables and prepaid reinsurance premiums b. . A gap analysis of interest rate repricing or maturity dates d.

Accounting Disclosure Checklist . The disclosure requirements in paragraphs 825-10-50-28 through 50-30 (in this checklist) do not eliminate disclosure requirements included in other Subtopics. . As of each date for which a statement of financial position is presented. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Present the aggregate of fair value and non-fair-value amounts in the same line item in the statement of financial position and parenthetically disclose the amount measured at fair value included in the aggregate amount b. All rights reserved. Management’s reasons for electing a fair value option for each eligible item or group of similar eligible items ©2010 KPMG LLP. > Required Disclosures as of Each Date for Which an Interim or Annual Statement of Financial Position Is Presented 825-10-50-28. an entity shall either: a. Entities are encouraged but are not required to present the disclosures required by this Subtopic in combination with related fair value information required to be disclosed by other Subtopics (for example. entities shall disclose all of the following: a. Entities shall report assets and liabilities that are measured at fair value pursuant to the fair value option in this Subtopic in a manner that separates those reported fair values from the carrying amounts of similar assets and liabilities measured using another measurement attribute. Disclosure 825-10-50-24.Annual (12/10) Page 231 of 290 108 Fair Value Option Subsection of Subtopic 825-10: Financial Instruments—Overall Presentation > Statement of Financial Position 825-10-45-1. Comparisons between entities that choose different measurement attributes for similar assets and liabilities b. 825-10-50-27. life settlement contracts measured at fair value pursuant to Subtopic 325-30. To accomplish that. Present two separate line items to display the fair value and non-fair-value carrying amounts. including other disclosure requirements relating to fair value measurement. the General Subsection of this Section and Topic 820). 825-10-50-25. The disclosures below are not required for securities classified as trading securities under Topic 320. Those Subtopics include disclosure requirements not affected by this Subtopic.S. a Delaware limited liability partnership and the U. 825-10-45-2. Comparisons between assets and liabilities in the financial statements of an entity that selects different measurement attributes for similar assets and liabilities. a Swiss entity. The principal objectives of the disclosures required by paragraphs 82510-50-28 through 50-32 (in this checklist) are to facilitate both of the following comparisons: a. or servicing rights measured at fair value pursuant to Subtopic 860-50.

The difference between the aggregate fair value and the aggregate unpaid principal balance of each of the following: 1 Loans and long-term receivables (other than securities subject to Topic 320) that have contractual principal amounts and for which the fair value option has been elected Long-term debt instruments that have contractual principal amounts and for which the fair value option has been elected. . a Swiss entity. If the fair value option is elected for some but not all eligible items within a group of similar eligible items. in nonaccrual status. the aggregate fair value of loans in nonaccrual status The difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due. all of the following: 1 2 The aggregate fair value of loans that are 90 days or more past due If the entity’s policy is to recognize interest income separately from other changes in fair value. the information required by paragraph 323-10-50-3 (excluding the disclosures in paragraph 323-10-50-3(a)(3).) The aggregate carrying amount of items included in each line item in the statement of financial position that are not eligible for the fair value option. (b). For each line item in the statement of financial position that includes an item or items for which the fair value option has been elected. partnerships and certain limited liability corporations) that both: ©2010 KPMG LLP. (Paragraph 825-10-50-11 (in this checklist) also requires an entity to relate carrying amounts that are disclosed in accordance with that paragraph to what is reported in the statement of financial position. 825-10-50-29. For loans held as assets for which the fair value option has been elected. both of the following: 1 2 A description of those similar items and the reasons for partial election Information to enable users to understand how the group of similar items relates to individual line items on the statement of financial position. if any. and (d)). c. a Delaware limited liability partnership and the U. or both. All rights reserved. The disclosure in paragraph 825-10-50-28(f) applies to investments in common stock. both of the following: 1 Information to enable users to understand how each line item in the statement of financial position relates to major categories of assets and liabilities presented in accordance with the fair value disclosure requirements of Topic 820. investments in in-substance common stock. and other investments (for example. 3 f. For investments that would have been accounted for under the equity method if the entity had not chosen to apply the fair value option. 2 e.S. 2 d.Accounting Disclosure Checklist .Annual (12/10) Page 232 of 290 b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

Would be required to satisfy the disclosure requirements of paragraph 32310-50-3 (in this checklist). all of the following: 1 The estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrumentspecific credit risk Qualitative information about the reasons for those changes How the gains and losses attributable to changes in instrument-specific credit risk were determined. a Swiss entity. For required disclosures about the method(s) and ©2010 KPMG LLP.Annual (12/10) Page 233 of 290 a. . In annual periods only. Would otherwise be required to be accounted for under the equity method under other generally accepted accounting principles (GAAP) b. > Required Disclosures for Each Period for Which an Interim or Annual Income Statement Is Presented 825-10-50-30. This Subtopic does not preclude an entity from meeting this requirement by disclosing amounts of gains and losses that include amounts of gains and losses for other items measured at fair value. an entity shall apply the guidance from paragraphs 323-10-50-2 and 323-10-50-3(a) and (c).Accounting Disclosure Checklist . b. All rights reserved. such as items required to be measured at fair value. entities shall disclose all of the following about items for which the fair value option has been elected: a. For each line item in the statement of financial position. For loans and other receivables held as assets. a Delaware limited liability partnership and the U. 2 3 > Other Required Disclosures 825-10-50-31. A description of how interest and dividends are measured and where they are reported in the income statement. When applying paragraph 825-10-50-28(f). d. c. For each period for which an income statement is presented. interest income. For liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk. an entity shall disclose the methods and significant assumptions used to estimate the fair value of items for which the fair value option has been elected. This Subtopic does not address the methods used for recognizing and measuring the amount of dividend income. both of the following: 1 2 The estimated amount of gains or losses included in earnings during the period attributable to changes in instrument-specific credit risk How the gains or losses attributable to changes in instrument-specific credit risk were determined. and interest expense for items for which the fair value option has been elected.S. the amounts of gains and losses from fair value changes included in earnings during the period and in which line in the income statement those gains and losses are reported. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

Any settlement alternatives contained in the terms of the registration payment arrangement. b.Annual (12/10) Page 234 of 290 significant assumptions used to estimate the fair value of financial instruments.S. The current carrying amount of the liability representing the issuer’s obligations under the registration payment arrangement f. that the issuer could be required to transfer under the registration payment arrangement (including the maximum number of shares that may be required to be issued) d. a Delaware limited liability partnership and the U. . that fact shall be disclosed e. see paragraph 825-10-50-10(b) (in this checklist). the entity shall disclose both of the following in financial statements for the period of the election: a.Accounting Disclosure Checklist . The issuer of a registration payment arrangement shall disclose all of the following information about each registration payment arrangement or each group of similar arrangements: a. All rights reserved. The income statement classification of any gains or losses resulting from changes in the carrying amount of the liability representing the issuer’s obligations under the registration payment arrangement. certain insurance contracts) for which the fair value option has been elected. Qualitative information about the nature of the event b. ©2010 KPMG LLP. Given the requirement in that paragraph. 825-10-50-32. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The maximum potential amount of consideration. a Swiss entity. the disclosure requirement in this paragraph is essentially limited to instruments otherwise outside the scope of this Section (see paragraph 825-1050-2) (for example. 109 Subtopic 825-20: Financial Instruments—Registration Payment Arrangements Disclosure 825-20-50-1. The nature of the registration payment arrangement. undiscounted. including all of the following: 1 2 3 The approximate term of the arrangement The financial instrument(s) subject to the arrangement The events or circumstances that would require the issuer to transfer consideration under the arrangement. If the terms of the arrangement provide for no limitation to the maximum potential consideration (including shares) to be transferred. Quantitative information by line item in the statement of financial position indicating which line items in the income statement include the effect on earnings of initially electing the fair value option for an item. including the party that controls the settlement alternatives c. If an entity elects the fair value option at the time one of the events in paragraph 825-10-25-4(d) through (e) occurs.

Income Taxes 830-740-45-1. If disclosed. when the reporting currency (not the foreign currency) is the functional currency. . All rights reserved. may be necessary. Disclosure > Subsequent Rate Changes 830-20-50-2. they may be disclosed as dealer gains or losses rather than as transaction gains or losses. a Swiss entity.Annual (12/10) Page 235 of 290 825-20-50-2. Management is encouraged to supplement the disclosures required by this Subtopic with an analysis and discussion of the effects of rate changes on the reported results of operations. Disclosure of a rate change that occurs after the date of the reporting entity’s financial statements and its effects on unsettled balances pertaining to foreign currency transactions. 110 Subtopic 830-20: Foreign Currency Matters—Foreign Currency Transactions Subtopic 830-740: Foreign Currency Matters—Income Taxes Presentation > Aggregate Transaction Gain or Loss 830-20-45-1. These disclosures are incremental to the disclosures that may be required under other applicable generally accepted accounting principles (GAAP) and are required even if the likelihood of the issuer having to make any payments under the arrangement is remote. As indicated in paragraph 830-20-45-3. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . > Effects of Rate Changes on Results of Operations 830-20-50-3. Paragraph 830-20-45-1 (in this checklist) requires disclosure of the aggregate transaction gain or loss included in determining net income but does not specify how to display that transaction gain or loss or its components for ©2010 KPMG LLP.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). such as the effects on selling prices. that fact shall be stated. if significant. In some cases it may not be practicable to determine these changes. The aggregate transaction gain or loss included in determining net income for the period shall be disclosed in the financial statements or notes thereto. and cost structures. remeasurement of an entity's deferred foreign tax liability or asset after a change in the exchange rate will result in a transaction gain or loss that is recognized currently in determining net income. This type of disclosure might include the mathematical effects of translating revenue and expenses at rates that are different from those used in a preceding period as well as the economic effects of rate changes. sales volume. primarily banks. are dealers in foreign exchange. The purpose is to assist financial report users in understanding the broader economic implications of rate changes and to compare recent results with those of prior periods. 830-20-45-2. the disclosure shall include consideration of changes in unsettled transactions from the date of the financial statements to the date the rate changed. Although certain gains or losses from dealer transactions may fit the definition of transaction gains or losses in this Subtopic. Certain entities. if so.

At a minimum. Beginning and ending amount of cumulative translation adjustments b. Entities should. disclose any changes to the current or non-current classification along with their overall policy and rationale for any changes. The aggregate adjustment for the period resulting from translation adjustments (see paragraph 830-30-45-12) and gains and losses from certain hedges and intra-entity balances (see paragraph 830-20-35-3). The amounts transferred from cumulative translation adjustments and included in determining net income for the period as a result of the sale or complete or substantially complete liquidation of an investment in a foreign entity (see paragraph 830-30-40-1). recorded in the book and records of a Venezuelan entity) in non-current simply due to the volume limitations in the newly regulated parallel rate market. c. If not provided in a separate financial statement or as part of a statement of changes in equity. a Swiss entity. All rights reserved. the analysis shall disclose the items enumerated in paragraph 830-30-45-20. 2 111 Subtopic 830-30: Foreign Currency Matters—Translation of Financial Statements Disclosure > Analysis of Changes in Cumulative Translation Adjustment 830-30-50-1. if material. Accordingly. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). That paragraph requires the following items: a.Annual (12/10) Page 236 of 290 financial reporting. current classification of USD-denominated receivables from Venezuelan third-parties may not be appropriate. KPMG & Other Guidance > Considerations Related to Recent Changes in the Currency Rate Environment in Venezuela 1 Financial statement preparers should consider that presentation within current assets may not be appropriate if the BSF-denominated asset accounts cannot be settled within the newly regulated parallel rate market during the normal operating cycle of the business as a result of the volume limitations if those BSFdenominated asset accounts will not be used to pay BSF-denominated liabilities. The amount of income taxes for the period allocated to translation adjustments (see paragraph 830-30-45-21) d. Unless there has been a change to the actual terms of a liability account and that change has been legally agreed to by the counterparty.Accounting Disclosure Checklist . > Subsequent Rate Change ©2010 KPMG LLP. a Delaware limited liability partnership and the U. In addition. that transaction gain or loss is still included in the aggregate transaction gain or loss for the period to be disclosed as required by that paragraph. a transaction gain or loss that results from remeasuring a deferred foreign tax liability or asset may be included in the reported amount of deferred tax benefit or expense if that presentation is considered to be more useful.S. If reported in that manner. it would be inappropriate to classify an otherwise current USD-denominated liability account (for example. . an analysis of the changes during the period in the accumulated amount of translation adjustments reported in equity shall be provided in notes to financial statements.

dollar denominated values 4.S. or accounted for by the equity method in the financial statements of the reporting entity and its effects on unsettled balances pertaining to foreign currency transactions.. the staff believes that any differences that may have existed prior to January 1.S. A description of why the actual U. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). registrants must follow the accounting outlined in ASC Topic 830. including the reasons for using two different rates with respect to remeasurement and translation 3. reporting currency parent and subsidiary effectively use the same currency (U.g. Therefore. accounts payable) on the financial statements for which the amounts reported for financial reporting purposes differ from the underlying U. When material. SEC Guidance 1.S. dollar denominated balances held at foreign subsidiaries (for example. Foreign Currency Matters). the disclosures should. the difference between the amounts reported for financial reporting purposes versus the underlying U.S. 2010 for calendar year registrants). Disclosure of the relevant line items (e. a Swiss entity. dollar denominated balances (as a result of using multiple exchange rates in accordance with Topic 830. 2010 EITF meeting. Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. consist of the following: 1. if significant.S. a U. The SEC staff observed that some entities may be reporting U.” Accordingly.S. codifies the SEC Staff Announcement at the March 18. The staff notes that upon application of highly inflationary accounting (January 1. ©2010 KPMG LLP. which states that “[t]he financial statements of a foreign entity in a highly inflationary economy shall be remeasured as if the functional currency were the reporting currency. dollar denominated values 5. dollars) and accordingly there should no longer be any differences between the amounts reported for financial reporting purposes and the amount of any underlying U.S. The staff believes a registrant should make disclosures that inform users of the financial statements as to the nature of these differences. Disclosure of the rates used for remeasurement and translation 2. All rights reserved. Disclosure of the amount that will be recognized through the income statement (as well as the impact on the other financial statements) as part of highly inflationary accounting beginning in 2010. dollar denominated balances differ from the amounts reported for financial reporting purposes. Foreign Currency Matters. a Delaware limited liability partnership and the U. ASU 2010-19. may be necessary. . in Venezuela) in their consolidated financial statements at amounts that differ from their actual U. For each relevant line item. combined. In those circumstances: a. upon the application of highly inflationary accounting requirements. Disclosure of a rate change that occurs after the date of the reporting entity's financial statements or after the date of the foreign currency statements of a foreign entity if they are consolidated.Accounting Disclosure Checklist .S.S.Annual (12/10) Page 237 of 290 830-30-50-2. cash. 2010 b. at a minimum. dollar denominated values that are held by the subsidiary.

(2) 2. For example. sales and cash balances will be less than half of the amount if translated or remeasured at the parallel rate (and the new official rate) compared to the official rate at December 2009. a receivable in BSF might be initially measured at the official rate. and the length of time the request(s) have been pending. however. b. Furthermore. 2010 Center for Audit Quality SEC Regulations Committee meeting. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Swiss entity. provide an explanation of the criteria used to make the distinction and provide information on the relative significance of the various exchange rates. g. For example. At the April 6.Accounting Disclosure Checklist . e. All rights reserved.S. The suggested disclosures are primarily related to MD&A. If multiple exchange rates were or are used. Disclose the new monetary assets and liabilities that are exposed to exchange rate changes. unless the registrant can document that the difference was previously recognized as a cumulative translation adjustment (in which case the difference should be recognized as an adjustment to the cumulative translation adjustment). the SEC staff discussed the specific types of disclosures it expects registrants to consider in quarterly and annual filings. dollar denominated balances should be recognized in the income statement in 2010 at the time of adoption of highly inflationary accounting.. but could ultimately be settled at the parallel rate. and cash flow statements) Disclose the exchange rate used for translation from BSF into dollars (e. Multiple Exchange Rate System c. . ©2010 KPMG LLP. h. disclose (1) The amount in ‘other comprehensive income’ relating to Venezuela The impact of the different exchange rates on the results of operations and the carrying amounts in the balance sheet (which is also relevant for the impact of the devaluation in 2010). the official rate or parallel rate). as well as an explanation of any changes in the rate used. income statements. summarized balance sheets. Disclose the exchange rates used for remeasurement purposes from US dollars into BSF in 2009 and from BSF into US dollars in 2010. a Delaware limited liability partnership and the U. Disclose the amount of BSF pending government approval for settlement at the official rate. If the registrant changed rates during 2009.g. Disclose the timing of and the economic factors that led to Venezuela becoming a highly inflationary economy. Disclose disaggregated financial information about the Venezuelan operations (e. f.Annual (12/10) Page 238 of 290 between reported balances for financial reporting and the U. if material.S..g. Discuss the exchange rate systems and the implications for the registrant’s operations in Venezuela and related cash flows. some may be applicable to the financial statements: Change to a Highly Inflationary Economy a. Describe how the change in functional currency will impact the accounting and financial reporting. d. the staff believes that these differences should be recognized in 2010 at the time of adoption of highly inflationary accounting.

The nature and extent of leasing transactions with related parties shall be ©2010 KPMG LLP. 112 Subtopic 835-20: Interest—Capitalization of Interest Disclosure 835-20-50-1. 113 Lessees and Real Estate Subsections of Topic 840: Leases Subtopic 840-10 Leases—Overall Presentation 840-10-45-1. including changes in the registrant’s ability to settle transactions at either the official or parallel rates. including gains and losses on monetary items resulting from the devaluation in the 2009 10-K as well as the actual amount recognized in the first quarter of 2010 (for a calendaryear company). n. the amount of interest cost incurred and charged to expense during the period b. Devaluation j. For an accounting period in which no interest cost is capitalized. The equity method is not adequate for fair presentation of those subsidiaries because their assets and liabilities are significant to the consolidated financial position of the entity.Annual (12/10) Page 239 of 290 Discuss the government’s actions regarding exchange rates. l.Accounting Disclosure Checklist . m. the total amount of interest cost incurred during the period and the amount thereof that has been capitalized.S. Discuss the government pressures on vendors not to change sales prices and the expected impact on post-currency devaluation profitability. All rights reserved. a Delaware limited liability partnership and the U. Discuss the impact that the devaluation had or is expected to have on the registrant’s compliance with debt covenants. Disclose an estimate of the financial effect. Disclose the timing and the implications of the 2010 devaluation. a Swiss entity. o. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Discuss the changes in profitability related to the currency devaluation’s increase in the cost of imports and in-country’s sales prices of imported goods. The accounts of subsidiaries (regardless of when organized or acquired) whose principal business activity is leasing property or facilities to the parent or other affiliated entities shall be consolidated. Disclose business practices or policies which have occurred or are anticipated to occur in response to the devaluation. . i. k. For an accounting period in which some interest cost is capitalized. This discussion should focus on both accounting and operational implications. Disclosure 840-10-50-1. An entity shall disclose the following information with respect to interest cost in the financial statements or related notes: a.

leasehold improvement incentives and unusual provisions or conditions. SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. The existence and terms of renewal or purchase options and escalation clauses c. Future minimum rental payments required as of the date of the latest balance sheet presented. in the aggregate and for each of the five succeeding fiscal years b. the lessee shall disclose rental expense for each period for which an income statement is presented. in its financial statements or footnotes thereto. Disclose the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. and sublease rentals. the lessee shall disclose both of the following: a. For operating leases having initial or remaining noncancelable lease terms in excess of one year.Accounting Disclosure Checklist . Disclose rent holidays. For all operating leases. 2006. Restrictions imposed by lease agreements. and further leasing. Rental payments under leases with terms of a month or less that were not renewed need not be included. 840-20-50-2. All rights reserved. contingent rentals. a Delaware limited liability partnership and the U. with separate amounts for minimum rentals.S. 2006. Assets recorded under capital leases and the accumulated amortization thereon shall be separately identified in the lessee's balance sheet or in footnotes thereto. . Subtopic 840-30 Leases—Capital Leases Presentation 840-30-45-1. ©2010 KPMG LLP. Example 1 (see paragraph 840-10-55-40) illustrates a lessee's application of the disclosure requirements of Subtopic 840-10 for an operating lease. a Swiss entity. a general description of its leasing arrangements including.Annual (12/10) Page 240 of 290 disclosed. 840-10-50-2. SEC Guidance 1 SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. such as those concerning dividends. November 30. 2 Subtopic 840-20 Leases—Operating Leases Presentation 840-20-45-1 Rental costs shall be included in the lessee's income from continuing operations. The lessee shall disclose. The basis on which contingent rental payments are determined b. but not limited to. additional debt. rent concessions. 840-20-50-3. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). November 30. The total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented. all of the following: a. Disclosure 840-20-50-1.

Real Estate > Transactions that Do Not Qualify for Sale-Leaseback Accounting 840-40-50-2. Total contingent rentals actually incurred for each period for which an income statement is presented. obligations.S. Obligations under capital leases shall be separately identified as such in the lessee's balance sheet and shall be subject to the same considerations as other obligations in classifying them with current and noncurrent liabilities in classified balance sheets. a Swiss entity. Example 1 (see paragraph 840-10-55-40) illustrates certain disclosures. An entity is not required to classify interest expense or amortization of leased assets as separate items in the income statement. provisions. c. 840-30-50-3. including any profit thereon. unless the charge to income resulting from amortization of assets recorded under capital leases is included by the lessee with depreciation expense and the fact that it is so included is disclosed. In addition to the disclosure requirements of Subtopics 360-20 and 840-10. a Delaware limited liability partnership and the U. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). with separate deductions from the total for the amount representing executory costs. d. in the aggregate and for each of the five succeeding fiscal years. All of the following information with respect to capital leases shall be disclosed in the lessee's financial statements or the footnotes thereto: a. . 840-30-45-3.Annual (12/10) Page 241 of 290 840-30-45-2. including future commitments. The total of minimum sublease rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented. Disclosure 840-30-50-1. Future minimum lease payments as of the date of the latest balance sheet presented.Accounting Disclosure Checklist . b. included in the minimum lease payments and for the amount of the imputed interest necessary to reduce the net minimum lease payments to present value (see paragraphs 840-30-30-1 through 30-4). Subtopic 840-40 Leases—Sale-Leaseback Transactions Disclosure 840-40-50-1. or circumstances that require or result in the seller-lessee's continuing involvement. This information may be combined with the comparable information for owned assets. All rights reserved. the amortization charge shall be separately disclosed by the lessee in the financial statements or footnotes thereto. The financial statements of a seller-lessee that has accounted for a saleleaseback transaction by the deposit method or as a financing according to the ©2010 KPMG LLP. However. The gross amount of assets recorded under capital leases as of the date of each balance sheet presented by major classes according to nature or function. the financial statements of a seller-lessee shall include a description of the terms of the sale-leaseback transaction.

114 Lessors Subsections of Topic 840: Leases Subtopic 840-10 Leases—Overall Presentation 840-10-45-4. rent concessions. Disclose rent holidays. a Delaware limited liability partnership and the U.A. if any. to be received in the future under noncancelable subleases in the aggregate and for each of the five succeeding fiscal years. or leasehold improvement incentives and unusual provisions or conditions. Disclosure 840-10-50-1. SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. disclosure of the impact on rental income shall be made as if the lessor's accounting policy was to defer contingent rental income until the specified target is met. exclusive of leveraged leasing. 840-10-50-4. All rights reserved. The lessor shall disclose its accounting policy for contingent rental income. November 30. The obligation for future minimum lease payments as of the date of the latest balance sheet presented in the aggregate and for each of the five succeeding fiscal years b. The nature and extent of leasing transactions with related parties shall be disclosed. (SAB 13.Annual (12/10) Page 242 of 290 guidance in this Subtopic also shall disclose both of the following: a. If a lessor accrues contingent rental income before the lessee's achievement of the specified target (provided achievement of that target is considered probable). The total of minimum sublease rentals. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Swiss entity. [Note: SEC registrants may not recognize contingent rental income before the lessee’s achievement of the specified target. ©2010 KPMG LLP. net income.4(c))] SEC Guidance 1 SEC-Current Accounting and Disclosure Issues in the Division of Corporation Finance. is a significant part of the lessor's business activities in terms of revenue. or assets. The leased property shall be included by the lessor with or near property. November 30. If leasing.Accounting Disclosure Checklist . 2006. Leases of a manufacturing entity's equipment sold to a leasing subsidiary that are accounted for as direct financing leases on the subsidiary's financial statements normally would be sales-type capital leases in the consolidated financial statements. a lessor shall disclose in the financial statements or footnotes thereto a general description of the lessor's leasing arrangements. 840-10-50-5. Disclose the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. 2 Subtopic 840-20 Leases—Operating Leases Presentation 840-20-45-2. .S. 2006.

Annual (12/10) Page 243 of 290 plant. is a significant part of the lessor's business activities in terms of revenue. and the amount of accumulated depreciation in total as of the date of the latest balance sheet presented b. and equipment in the balance sheet. Disclosure > Sales-Type Leases and Direct Financing Leases 840-30-50-4. . 840-20-45-3. or assets. of property on lease or held for leasing by major classes of property according to nature or function. Accumulated depreciation shall be deducted by the lessor from the investment in the leased property. If leasing. exclusive of leveraged leasing. the amount of related deferred taxes shall be presented separately (from the remainder of the net investment).S. Minimum future rentals on noncancelable leases as of the date of the latest balance sheet presented. All rights reserved. > Leveraged Leases 840-30-45-5. Disclosure 840-20-50-4. Total contingent rentals included in income for each period for which an income statement is presented. is a significant part of the lessor’s business activities in terms of revenue. if different. exclusive of leveraged leasing. or assets. net income. 840-20-50-4A. Example 1 (see paragraph 840-10-55-47) illustrates the application of the preceding paragraph.Accounting Disclosure Checklist . a Swiss entity. In the income statement or the notes thereto. in the aggregate and for each of the five succeeding fiscal years c. All of the following components of the net investment in sales-type and direct ©2010 KPMG LLP. If leasing. Subtopic 840-30 Leases—Sales-Type Leases and Direct Financing Leases Presentation > Sales-Type Leases and Direct Financing Leases 840-30-45-4. The cost and carrying amount. and the amount of investment tax credit recognized as income during the period. the tax effect of pretax income. separate presentation (from each other) shall be made of pretax income from the leveraged lease. a Delaware limited liability partnership and the U. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). For purposes of presenting the investment in a leveraged lease in the lessor's balance sheet. net income. all of the following information with respect to operating leases shall be disclosed in the financial statements or footnotes thereto: a. all of the following information with respect to sales-type and direct financing leases shall be disclosed in the financial statements or footnotes: a. The net investment in a sales-type or direct financing leases shall be subject to the same considerations as other assets in classification as current or noncurrent assets in a classified balance sheet.

Those components are: a. the lessor shall disclose the reason for that variation. and 310-10-50-31. which include receivables relating to a lessor’s rights to payments from leveraged leases. Estimated residual value of the leased asset d.Annual (12/10) Page 244 of 290 financing leases as of the date of each balance sheet presented: 1 Future minimum lease payments to be received.) > Leveraged Leases 840-30-50-5. 310-10-50-27. If leveraged leasing is a significant part of the lessor’s business activities in terms of revenue. 2 3 4 The unguaranteed residual values accruing to the benefit of the lessor For direct financing leases only. a Delaware limited liability partnership and the U. Unearned and deferred income 840-30-50-5A. Total contingent rentals included in income for each period for which an income statement is presented. Example 1 (see paragraph 840-10-55-47) illustrates certain disclosures. (Note: After adoption of ASU 2010-20. Future minimum lease payments to be received for each of the five succeeding fiscal years as of the date of the latest balance sheet presented c. 31010-50-11A. 310-10-50-11A. Rentals receivable b. The accumulated allowance for uncollectible minimum lease payments receivable.Accounting Disclosure Checklist . For guidance on disclosures about financing receivables. initial direct costs Unearned income (see paragraphs 840-30-30-9 and 840-30-30-13). For guidance on disclosures about financing receivables. 840-30-50-4A. net income. Amounts representing executory costs (including any profit thereon) included in the minimum lease payments b.S. Investment-tax-credit receivable c. with separate deductions for both of the following: a. b. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 310-10-50-27. . and 310-10-50-31. ©2010 KPMG LLP. (Note: After adoption of ASU 2010-20. See note at the beginning of section 22. see the guidance beginning in paragraphs 310-10-50-5A. see the guidance beginning in paragraphs 310-10-50-5A. which include receivables relating to a lessor’s rights to payments from sales-type and direct financing leases. the components of the net investment balance in leveraged leases as set forth in paragraph 840-30-25-8 shall be disclosed in the footnotes to financial statements. See note at the beginning of section 22. All rights reserved. a Swiss entity. or assets.) 840-30-50-6. If accounting for the effect on leveraged leases of the change in tax rates results in a significant variation from the customary relationship between income tax expense and pretax accounting income and the reason for that variation is not otherwise apparent.

The staff would view that situation as an error. All rights reserved. 845-10-50-2. 117 Subtopic 850-10: Related Party Disclosures--Overall Disclosure > Related Party Transactions 850-10-50-1. Entities shall disclose. in each period's financial statements. A description of the transactions. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The SEC staff has been asked for its views on situations in which a lessor had not obtained a residual value guarantee at inception. expense allowances. The disclosures shall include: a. Gains or losses recognized on transfers. and other similar items in the ordinary course of business.Accounting Disclosure Checklist . The nature of the relationship(s) involved b. the amount of gross operating revenue recognized as a result of nonmonetary transactions. disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. a Delaware limited liability partnership and the U. See Subtopic 505-50. However.S. including transactions to which no amounts ©2010 KPMG LLP. An entity shall disclose the amount of revenue and costs (or gains and losses) associated with inventory exchanges recognized at fair value. yet had assumed such a guarantee existed when determining the minimum lease payments. regardless of whether a residual value guarantee is subsequently obtained. a Swiss entity. The basis of accounting for the assets transferred c. Financial statements shall include disclosures of material related party transactions. which would require restatement as described in paragraphs 250-10-45-23 and 250-10-50-7 ( in this checklist).Annual (12/10) Page 245 of 290 SEC Guidance 1 SEC Staff Announcement: Lessor Consideration of Third-Party Value Guarantees. 115 Subtopic 845-10: Nonmonetary Transactions—Overall Disclosure 845-10-50-1. The nature of the transactions b. 116 Purchase and Sales of Inventory Subsection of Subtopic 845-10: Nonmonetary Transactions--Overall Disclosure 845-10-50-3. other than compensation arrangements. . An entity that engages in one or more nonmonetary transactions during a period shall disclose in financial statements for the period all of the following: a.

member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).S. if not otherwise apparent. which is as follows for an entity that issues separate financial statements and is a member of a group that files a consolidated tax return: 1 The aggregate amount of current and deferred tax expense for each statement of earnings presented and the amount of any tax-related balances due to or from affiliates as of the date of each statement of financial position presented The principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to members of the group and the nature and effect of any changes in that method (and in determining related balances to or from affiliates) during the years for which the above disclosures are presented. a Delaware limited liability partnership and the U. aggregation of similar transactions by type of related party may be appropriate. the name of the related party shall be disclosed. a Swiss entity. and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements c. if made. If necessary to the understanding of the relationship.Annual (12/10) Page 246 of 290 or nominal amounts were ascribed. for each of the periods for which income statements are presented. or affiliated entities must be shown separately and not included under a general heading such as notes receivable or accounts receivable. 850-10-50-4. the effect of the relationship between the parties may be so pervasive that disclosure of the relationship alone will be sufficient. freemarket dealings may not exist. the terms and manner of settlement e. .Accounting Disclosure Checklist . > Disclosures About Arm's-Length Bases of Transactions 850-10-50-5. The information required by paragraph 740-10-50-17 (in this checklist). Amounts due from or to related parties as of the date of each balance sheet presented and. The dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period d. Representations about transactions with related parties. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis. shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. 850-10-50-3. All rights reserved. as the requisite conditions of competitive. > Control Relationships ©2010 KPMG LLP. employees. 2 850-10-50-2. Sometimes. Notes or accounts receivable from officers. It is not necessary to duplicate disclosures in a set of separate financial statements that is presented in the financial report of another entity (the primary reporting entity) if those separate financial statements also are consolidated or combined in a complete set of financial statements and both sets of financial statements are presented in the same financial report. In some cases.

any intercompany profits or losses resulting from transactions with related parties and not eliminated and the effects thereof shall be disclosed.E. . the nature of the control relationship shall be disclosed even though there are no transactions between the entities.G. This ASU amends the Codification to eliminate inconsistencies.Annual (12/10) Page 247 of 290 850-10-50-6. Notes or other receivable from a parent or another affiliate must be treated as a deduction from stockholders' equity in the balance sheet of a corporate general partner. separate disclosure shall be made in such statements of the amounts in the related consolidated financial statements which are (i) eliminated and (ii) not eliminated. Subtopic 852-740: Reorganizations—Income Taxes Note: In February 2010.S. If the reporting entity and one or more other entities are under common ownership or management control and the existence of that control could result in operating results or financial position of the reporting entity significantly different from those that would have been obtained if the entities were autonomous. which was based on EITF Topic D-33. a. or statement of cash flows. In cases where separate financial statements are presented for the registrant. All rights reserved. Also.E. the FASB issued ASU 2010-08. Generally all amounts receivable from officers and directors resulting from sales of stock or from other transactions (other than expense advances or sales on normal trade terms) should be separately stated in the balance sheet irrespective of whether such amounts may be shown as assets or are required to be reported as deductions from stockholders' equity. The amount recorded as a receivable arising from the issuance of capital stock to officers of other employees should be presented in the balance sheet as a deduction from stockholder’s equity. 118 Subtopic 852-10: Reorganizations—Overall.Accounting Disclosure Checklist . certain investees. Technical Corrections to Various Topics. 2 > Notes or Other Receivables from a Parent or Another Affiliate 3 SAB Topic 4. Related party transactions should be identified and the amounts stated on the face of the balance sheet. SEC Guidance > Receivables Arising from the Issuance of Capital Stock to Officers or Other Employees 1 SAB Topic 4. income statement. “Timing of Recognition of Tax Benefits for Pre-reorganization Temporary ©2010 KPMG LLP. SAB Topic 4. a Delaware limited liability partnership and the U. a Swiss entity. b. remove outdated provisions. > Related Party Transactions 4 Regulation S-X Rule 4-08(k). or subsidiaries. ASU 2010-08 deletes paragraph 852-740-45-2. and provide clarification of the Board’s original intent in certain areas. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

and post-reorganization amounts. Example 1 (see paragraph 852-10-55-2) provides an illustration of financial statements and notes thereto for an entity operating under Chapter 11. retrospective application is required. All rights reserved. the benefit shall be determined for financial reporting by provisions in the tax law that identify the sequence in which those amounts are utilized for tax purposes. The balance sheet of an entity in Chapter 11 shall distinguish prepetition liabilities subject to compromise from those that are not (such as fully secured liabilities that are expected not to be compromised) and postpetition liabilities. Revenues. >> Statement of Operations 852-10-45-9. The financial statements for periods including and after filing the Chapter 11 petition shall distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Prior to its deletion.Accounting Disclosure Checklist .Annual (12/10) Page 248 of 290 Differences and Carryforwards. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).” Presentation > Financial Reporting During Reorganization Proceedings 852-10-45-2. 2008 (consistent with the effective date of Statement 141(R)). For those reorganizations reflected in interim financial statements issued before the issuance of this ASU. a Delaware limited liability partnership and the U.” The guidance in EITF Topic D-33 should have been nullified when Statement 141(R) was issued. a Swiss entity. 852-10-45-7.S. >> Balance Sheet 852-10-45-4. 852-10-45-3.or post-reorganization amounts. expenses (including professional fees). An entity should not apply those provisions before that date. paragraph 852-740-45-2 stated the following: “It is necessary to determine the timing of recognition of a tax benefit for prereorganization deductible temporary differences and net operating loss and tax credit carryforwards (for which a valuation allowance was provided at the date of reorganization) when post-reorganization net operating loss carryforwards exist. Professional fees and similar types of expenditures directly relating to the Chapter 11 proceeding shall be expensed as incurred and reported as reorganization items. because that Statement modified the guidance in SOP 90-7 and Statement 109 to no longer require tax benefits acquired in a business combination to be separately classified between pre. The deletion of paragraph 852-740-45-2 should be applied to reorganizations for which the date of reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15. 852-10-45-10. realized gains and losses. In determining whether a tax benefit recognized in later years is attributable to the pre. and provisions for losses resulting from the reorganization and restructuring of the business shall be reported separately as reorganization items. . Liabilities not subject to compromise shall be further segregated into current and noncurrent classifications if the entity presents a classified balance sheet. 852-10-45-5. Claims not subject to reasonable estimation are required to be disclosed in the notes to financial statements. except for those required to be reported as discontinued operations and extraordinary items in conformity with Subtopics 205-20 and 225-20. ©2010 KPMG LLP.

Consolidated financial statements that include one or more entities in reorganization proceedings and one or more entities not in reorganization proceedings shall include condensed combined financial statements of the entities in reorganization proceedings. Fresh-start financial statements prepared by entities emerging from Chapter 11 will not be comparable with those prepared before their plans were confirmed because they are. The extent to which reported interest expense differs from stated contractual interest shall be disclosed. >> EPS 852-10-45-16. Thus. if required. >> Condensed Combined Financial Statements 852-10-45-14. Claims not subject to reasonable estimation based on the provisions of Subtopic 450-20 b. Intra-entity receivables and payables of entities in reorganization proceedings shall be disclosed in the condensed combined financial statements referred to in paragraph 852-10-45-14 (in this checklist). shall be reported as a reorganization item. The principal categories of the claims subject to compromise. 852-10-50-5. 852-10-50-3. >>>Statement of Cash Flows 852-10-45-13. 852-10-50-4. All rights reserved. It may be appropriate to disclose this parenthetically on the face of the statement of operations. a Swiss entity. Interest income earned by an entity in Chapter 11 that it would not have earned but for the proceeding. in conformity with Topic 260. comparative financial statements that straddle a confirmation date shall not be presented. details of operating cash receipts and payments resulting from the reorganization shall be disclosed in a supplementary schedule or in the notes to financial statements. Forgiveness of debt. thereby diluting current equity ©2010 KPMG LLP. Reorganization items shall be disclosed separately within the operating. and financing categories of the statement of cash flows.Accounting Disclosure Checklist . Earnings per share (EPS) shall be reported. if any. 852-10-45-12. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). normally all interest income. in effect. a Delaware limited liability partnership and the U. .Annual (12/10) Page 249 of 290 852-10-45-11. If the indirect method is used. shall be reported as an extinguishment of debt and classified in accordance with Subtopic 225-20. > Financial Reporting When Entities Emerge from Chapter 11 Reorganization >> Fresh-Start Reporting >>> Comparative Financial Statements 852-10-45-26. Interest expense is not a reorganization item. >> Reporting by Entities Not Qualifying for Fresh-Start Reporting 852-10-45-29. If it is probable that the reorganization plan will require the issuance of common stock or common stock equivalents. those of a new entity. Disclosure > Financial Reporting During Reorganization Proceedings 852-10-50-2.S. investing. The notes to financial statements of an entity in Chapter 11 shall disclose both of the following: a.

©2010 KPMG LLP.Annual (12/10) Page 250 of 290 interests. > Financial Reporting When Entities Emerge from Chapter 11 Reorganization and Adopt Fresh-Start Reporting 852-10-50-7. and the method of determining terminal value 2 Sensitive assumptions—that is. SEC registrants are required to indicate the point in time from which the new retained earnings dates for a period of at least 10 years subsequent to the effective date of a quasi-reorganization (Regulation S-X Rule 5-02. dated to show that it runs from the effective date of the readjustment. Paragraph 852-10-45-21 requires additional information to be disclosed in the notes to the initial fresh-start financial statements when fresh-start reporting is adopted. The amount of debt forgiveness c. a Delaware limited liability partnership and the U. 119 Subtopic 852-20: Reorganizations—Quasi-Reorganizations Disclosure 852-20-50-2. After a quasi-reorganization. the total amount of deficit eliminated should be disclosed on the balance sheet. SEC Guidance Other Stockholders’ Equity 1 For a period of at least three years from effective date of quasi-reorganization. All rights reserved. 852-10-50-6. be of significance after a period of 10 years.Accounting Disclosure Checklist . There may be exceptional circumstances in which the discontinuance of the dating of retained earnings could be justified at the conclusion of a period less than 10 years. Significant matters relating to the determination of reorganization value. a Swiss entity. that fact shall be disclosed. Example 1 (see paragraph 852-10-55-2) provides an illustration of financial statements and notes thereto for an entity operating under Chapter 11.30(b)). . the number of years for which cash flows are projected. if ever. Adjustments to the historical amounts of individual assets and liabilities b. assumptions about which there is a reasonable possibility of the occurrence of a variation that would have significantly affected measurement of reorganization value 3 Assumptions about anticipated conditions that are expected to be different from current conditions. A new retained earnings account shall be established. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). including all of the following: 1 The method or methods used to determine reorganization value and factors such as discount rates. retained earnings previously accumulated cannot properly be carried forward under that title. and this dating shall be disclosed in financial statements until such time as the effective date is no longer deemed to possess any special significance. That additional information consists of all of the following (see Example 2 at 852-10-55-4): a. The dating of retained earnings following a quasi-reorganization would rarely. tax rates. unless otherwise apparent.S. However.

an entity also shall consider presenting pro forma statements. the following definition of an SEC filer should be used: An entity that is required to file or furnish its financial statements with either of the following: a. . an entity shall disclose in the revised financial statements the dates through which subsequent events have been evaluated in both of the following: a. For such events. > Revised Financial Statements 855-10-50-4. In some situations. 855-10-25-4. for example. The Securities and Exchange Commission (SEC) b. An entity also shall consider supplementing the historical financial statements with pro forma financial data. The date the financial statements were issued 2. Financial statements for other entities that are not otherwise SEC filers whose financial statements are included in a submission by another SEC filer are not included within this definition. usually a balance sheet only. Disclosure > Date through Which Subsequent Events Have Been Evaluated 855-10-50-1. An entity may need to reissue financial statements. as amended. Unless the entity is an SEC filer. The date through which subsequent events have been evaluated b. If an entity is not an SEC filer.Annual (12/10) Page 251 of 290 120 Subtopic 855-10: Subsequent Events--Overall Note: For purposes of applying the disclosure provisions of this Subtopic 855. The nature of the event b. Whether that date is either of the following: 1. or a statement that such an estimate cannot be made.Accounting Disclosure Checklist . The issued or available to be issued financial statements b. an entity shall disclose the following: a. > Nonrecognized Subsequent Events 855-10-50-2. Occasionally. a nonrecognized subsequent event may be so significant that disclosure can best be made by means of pro forma financial data. in ©2010 KPMG LLP. a Delaware limited liability partnership and the U. a Swiss entity. in columnar form on the face of the historical statements. 855-10-50-3. The date the financial statements were available to be issued. The revised financial statements.S. the appropriate agency under that Section. All rights reserved. An estimate of its financial effect. With respect to an entity subject to Section 12(i) of the Securities Exchange Act of 1934. then the entity shall disclose both of the following: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Such data shall give effect to the event as if it had occurred on the balance sheet date. Some nonrecognized subsequent events may be of such a nature that they must be disclosed to keep the financial statements from being misleading.

Generally. when multiplied by the offering price.Annual (12/10) Page 252 of 290 reports filed with the SEC or other regulatory agencies. . An entity shall not recognize events occurring between the time the financial statements were issued or were available to be issued and the time the financial statements were reissued unless the adjustment is required by GAAP or regulatory requirements.S. in the case of annual financial statements. In these situations. The change revises the meaning of wide distribution of financial statements to allow posting of financial statements to a registrant’s Web site to be considered wide distribution to all shareholders and other financial statement users if the registrant uses its Web site to disclose information to the public under Regulation FD (Fair Disclosure). see paragraph 855-10-25-4. For guidance on the recognition of subsequent events in reissued financial statements. After the original issuance of the financial statements. when the dividends are to be paid from the proceeds of an offering. that contain an audit report that indicates that the auditors have complied with generally accepted auditing standards (GAAS) in completing their audit. SEC Observer Comment. 2009 EITF meeting. Revised financial statements are considered reissued financial statements. the SEC will now consider a registrant’s financial statements to be issued under ASC Topic 855 when 2 3 ©2010 KPMG LLP. Dividends declared by a subsidiary after the balance sheet date should be given retroactive effect in the balance sheet with appropriate footnote disclosure. the issuance of an earnings release does not constitute issuance of financial statements because the earnings release would not be in a form and format that complies with GAAP and GAAS. a Delaware limited liability partnership and the U. 855-10-50-5. A similar presentation is appropriate when dividends exceed earnings in the current year. the SEC Observer indicated that the SEC staff modified the definition of the date of issuance for financial statements of public companies from the date the financial statements are filed with the SEC to the date the financial statements are posted on a registrant’s Web site. Similarly. pro forma per share data should give effect to the increase in the number of shares which. or reflected in a pro forma balance sheet. SEC Guidance 1 SAB Topic 1. Furthermore. the staff believes that financial statements are "issued" as of the date they are distributed for general use and reliance in a form and format that complies with generally accepted accounting principles (GAAP) and. a Swiss entity. even though the stated use of proceeds is other than for the payment of dividends. events or transactions may have occurred that require disclosure in the reissued financial statements to keep them from being misleading. Accordingly. an entity shall not recognize events or transactions occurring after the financial statements were issued or were available to be issued in financial statements that are later reissued in comparative form along with financial statements of subsequent periods unless the adjustment meets the criteria stated in this paragraph. At the September 9-10. Issuance of financial statements then would generally be the earlier of when the annual or quarterly financial statements are widely distributed to all shareholders and other financial statement users or filed with the Commission. In addition. SEC Staff Announcement. the staff believes it is appropriate to include pro forma per share data (for the latest year and interim period only) giving effect to the number of shares whose proceeds were to be used to pay the dividend.Accounting Disclosure Checklist .3. would be sufficient to replace the capital in excess of earnings being withdrawn. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).B.

and an entity may need to supplement the required disclosures depending on any of the following: a. if a transferor has continuing involvement with the transferred financial assets 2. How servicing assets and servicing liabilities are reported under Subtopic 860-50 d. 860-10-50-4. Transfers accounted for as sales. financial performance. For both of the following. if any. The nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset. including the carrying amounts of those assets c. clarifies other sale-accounting criteria.” 121 Subtopic 860-10: Transfers and Servicing--Overall Note: The content in this Subtopic has been updated for ASU 2009-16. The facts and circumstances of a transfer b. creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale. The specific disclosures required by this Topic are minimum requirements. with transferred financial assets b. The objectives in the preceding paragraph apply regardless of whether this Topic requires specific disclosures. 2009. changes the initial measurement of a transferor’s interest in transferred financial assets. The principal objectives of the disclosure requirements of this Topic are to provide financial statement users with an understanding of all of the following: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the entity shall disclose a description of those items and the reasons why it is not practicable to estimate their fair value. Transfers of financial assets accounted for as secured borrowings. financial performance. which formerly was included in EITF Topic No. D-86. If it is not practicable to estimate the fair value of certain assets obtained or liabilities incurred in transfers of financial assets during the period. The nature of an entity’s continuing involvement with the transferred financial assets c. ASU 2009-16 amends Topic 860 to eliminate the concept of a QSPE and associated guidance. Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets (Statement 166). All rights reserved.S. a Delaware limited liability partnership and the U. Disclosure 860-10-50-1. ©2010 KPMG LLP.Annual (12/10) Page 253 of 290 they are posted to the registrant’s Web site. The effect of an entity’s continuing involvement on the transferor’s financial position. how the transfer of financial assets affects an entity’s financial position. which is effective for the first annual reporting period that begins after November 15. A transferor’s continuing involvement. “Issuance of Financial Statements. a Swiss entity. and cash flows: 1. > General 860-10-50-3. The announcement supersedes footnote 4 to paragraph 855-10-S99-2 of ASC Topic 855. and amends existing disclosure requirements.Accounting Disclosure Checklist . . and cash flows.

The guidance in paragraph 310-10-50-25 (for risks and uncertainties) and paragraphs 825-10-55-1 through 55-2 (for concentrations involving loan product terms). KPMG & Other Guidance 1 In October 2010. 860-10-50-5. including all of the following: a. the SEC staff has also provided guidance in a Dear CFO letter on disclosures related to potential risks and costs associated with mortgage and foreclosure-related activities or exposures. . The entity shall strike a balance between obscuring important information as a result of too much aggregation and excessive detail that may not assist financial statement users to understand the entity’s financial position. >> Aggregation of Certain Disclosures 860-10-50-4A. a Delaware limited liability partnership and the U.S. The disclosures shall be presented in a manner that clearly and fully explains to financial statement users the transferor’s risk exposure related to the transferred financial assets and any restrictions on the assets of the entity. To apply the disclosures required in this Topic. In determining whether to aggregate the disclosures for multiple transfers.Accounting Disclosure Checklist . Similarly. the reporting entity shall consider quantitative and qualitative information about the characteristics of the transferred financial assets. For example. 860-10-50-7. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). An entity shall determine. Distinguish between transfers that are accounted for as secured borrowings and transfers that are accounted for as sales. an entity shall not disclose information that is so aggregated that it obscures important differences between the different types of involvement or associated risks. a public entity shall consider all involvements by the transferor. A transferor shall both: a. The nature of the transferor’s continuing involvement b. All rights reserved. a Swiss entity. how much detail it must provide to satisfy disclosure requirements of this Topic and how it aggregates information for assets with different risk characteristics.Annual (12/10) Page 254 of 290 Disclosures required for a particular form of continuing involvement shall be considered when determining whether the disclosure objectives of this Topic have been met. ©2010 KPMG LLP. an entity shall not obscure important information by including it with a large amount of insignificant detail. 860-10-50-6. its consolidated affiliates included in the financial statements being presented. Disclose how similar transfers are aggregated b. Disclosures required by this Topic may be reported in the aggregate for similar transfers if separate reporting of each transfer would not provide more useful information to financial statement users. or its agents to be involvements by the transferor. Risks related to the transferred financial assets to which the transferor continues to be exposed after the transfer and the change in the transferor’s risk profile as a result of the transfer d. in light of the facts and circumstances. The types of financial assets transferred c.

and dividing the sum by the initial principal balance. 2. The nature and initial fair value of both of the following: i. All rights reserved. and similar transfers that have both of the following characteristics: a. the key inputs and assumptions used in measuring the fair value of assets obtained and liabilities incurred as a result of the sale that relate to the transferor’s continuing involvement. The weighted-average life of prepayable assets in periods (for example.Annual (12/10) Page 255 of 290 122 Subtopic 860-20: Transfers and Servicing—Sales of Financial Assets Note: The content in this Subtopic has been updated for ASU 2009-16. summing those products. Significant other observable inputs (Level 2) 3. Discount rates. Anticipated credit losses. For the initial fair value measurements in item (b)(2). the entity shall disclose all of the following: a. months or years) can be calculated by multiplying the principal collections expected in each future period by the number of periods until that future period. including quantitative information about all of the following: 1. 3. asset-backed financing arrangements. Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets (Statement 166). A description of the transferor’s continuing involvement with the transferred financial assets 2. >> Disclosures for Each Income Statement Presented 860-20-50-3. . which is effective for the first annual reporting period that begins after November 15. segregating fair value measurements using each of the following: 1. For each income statement presented. Quoted prices in active markets for identical assets or liabilities (Level 1) 2.Accounting Disclosure Checklist . The transferor has continuing involvement with the transferred financial assets. ©2010 KPMG LLP. Expected prepayments including the expected weighted-average life of prepayable financial assets. a Swiss entity. The asset obtained as proceeds ii. 3 The gain or loss from sale of transferred financial assets. The characteristics of the transfer including all of the following: 1. The liabilities incurred in the transfer. including expected static pool losses. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the level within the fair value hierarchy in Topic 820 in which the fair value measurements fall.S. [Not Used] b. See Subtopic 860-10 for more information. Disclosure > All Entities within Scope of this Subtopic 860-20-50-2. Paragraphs 860-20-50-3 through 50-4 address disclosures for securitizations. For the initial fair value measurements in item (b)(2). 2009. a Delaware limited liability partnership and the U. bb. The transfer is accounted for as a sale b. Significant unobservable inputs (Level 3). c.

or other commitments by third parties related to the transferred financial assets that may affect the fair value or risk of ©2010 KPMG LLP. . including both of the following: i. Proceeds from new transfers 2. Cash flows received from a transferor’s interests. The type and amount of support ii. credit risk.Accounting Disclosure Checklist . an entity shall disclose all of the following: a. liquidity arrangements and obligations to purchase assets) to the transferee or its beneficial interest holders. including— when the transferor assisted the transferee or its beneficial interest holders in obtaining support—both of the following: i. Proceeds from collections reinvested in revolving-period transfers 3. >> Disclosures for Each Statement of Financial Position Presented 860-20-50-4. For each statement of financial position presented. All rights reserved. a Swiss entity. For the initial fair value measurements in item (b)(2). The terms of any arrangements that could require the transferor to provide financial support (for example. and other risks). The amount that continues to be recognized in the statement of financial position 4. including all of the following: 1. cc. interest rate risk. it may disclose the range of assumptions. the valuation technique(s) used to measure fair value. The total principal amount outstanding 2. A description of any events or circumstances that could expose the transferor to loss ii. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The primary reasons for providing the support.S.Annual (12/10) Page 256 of 290 If an entity has aggregated transfers during a period in accordance with the guidance beginning in paragraph 860-10-50-5 (in this checklist). An entity also is encouraged to disclose information about any liquidity arrangements. but not limited to. 5. The amount that has been derecognized 3. d. Cash flows between a transferor and transferee. regardless of when the transfer occurred. guarantees. Purchases of previously transferred financial assets 4. a Delaware limited liability partnership and the U. including all of the following: 1. Whether the transferor has provided financial or other support during the periods presented that it was not previously contractually required to provide to the transferee or its beneficial interest holders. The amount of the maximum exposure to loss. Servicing fees 5. Qualitative and quantitative information about the transferor’s continuing involvement with transferred financial assets that provides financial statement users with sufficient information to assess the reasons for the continuing involvement and the risks related to the transferred financial assets to which the transferor continues to be exposed after the transfer and the extent that the transferor’s risk profile has changed as a result of the transfer (including.

d. at a minimum. a Swiss entity. it may disclose the range of assumptions. e. [Not Used] 2. information for receivables shall include. All rights reserved. This information is intended to provide financial statement users with an understanding of the risks inherent in the transferred financial assets as well as in other financial assets and liabilities that it manages together with transferred financial assets. c. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Delinquencies at the end of the period 5. if applicable.Annual (12/10) Page 257 of 290 the related transferor’s interest. aa. methodology. and limitations of the sensitivity analysis or stress test. Information about the asset quality of transferred financial assets and any other financial assets that it manages together with them. but is not limited to both of the following: 1. Credit losses. Discount rates 2. b. [Not Used] 3. net of recoveries. If an entity has aggregated transfers during a period in accordance with the guidance beginning in paragraph 860-10-50-5 (in this checklist). This information shall be separated between assets that have been derecognized and assets that continue to be recognized in the statement of financial position.Accounting Disclosure Checklist . For the transferor’s interest in the transferred financial assets. including expected static pool losses. For example. quantitative information about all of the following: 1. a sensitivity analysis or stress test showing the hypothetical effect on the fair value of those interests (including any servicing assets or servicing liabilities) of two or more unfavorable variations from the expected levels for each key assumption that is reported under item (b) of this paragraph independently from any change in another key assumption. A description of the objectives. Expected prepayments including the expected weighted-average life of prepayable financial assets (see paragraph 860-20-50-3(c)(2) in this checklist) 3 Anticipated credit losses. > > Sales of Loans and Trade Receivables 860-20-50-5. a Delaware limited liability partnership and the U. . The key inputs and assumptions used in measuring the fair value of assets or liabilities that relate to the transferor’s continuing involvement including. but not limited to. during the period.S. [Not Used] 4. Expected static pool losses can be calculated by summing the actual and projected future credit losses and dividing the sum by the original balance of the pool of assets. The entity’s accounting policies for subsequently measuring assets or liabilities that relate to the continuing involvement with the transferred financial assets. The aggregate amount of gains or losses on sales of loans or trade receivables (including adjustments to record loans held for sale at the lower of cost or fair value) shall be presented separately in the financial statements or ©2010 KPMG LLP.

then the obligor (transferor) shall reclassify that asset and report that asset in its statement of financial position separately (for example. it shall disclose its policy for requiring collateral or other security. both of the following: 1. Disclosure 860-30-50-1A.Accounting Disclosure Checklist . which is effective for the first annual reporting period that begins after November 15. Financial assets. 860-30-45-2. not as loans receivable or other terminology implying that it has not been subordinated to the senior interests in the securitization. As of the date of the latest statement of financial position presented. or other receivables. See Topic 310 for a full discussion of disclosure requirements for loans and trade receivables. See Subtopic 860-10 for more information.S. but are not limited to. 123 Subtopic 860-30: Transfers and Servicing—Secured Borrowing and Collateral Note: The content in this Subtopic has been updated for ASU 2009-16. An entity shall disclose all of the following for collateral: a. SEC Guidance 1 SEC-2002 AICPA National Conference on Current SEC Developments. Presentation 860-30-45-1. except for instruments that are within the scope of Subtopic 815-10. interest-only strips. or AIR) that is subordinated either because it has been isolated from the transferor or because of the operation of the cash flow distribution (or “waterfall”) through the securitization trust. Registrants should actively monitor the value of the obligation throughout its life and disclose any material changes. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the total AIR asset should be accounted for as a transferor’s interest. The carrying amount and classifications of both of the following: ©2010 KPMG LLP. Examples of such financial assets include. All rights reserved.e. If a securitization transaction meets the criteria for sale treatment and the transferor has continued to recognize receivables for accrued fee and finance charge income (i. For a transfer of receivables with recourse. as security pledged to creditors) from other assets not so encumbered. . 860-20-55-18.Annual (12/10) Page 258 of 290 disclosed in the notes to financial statements. that can be contractually prepaid or otherwise settled in such a way that the holder would not recover substantially all of its recorded investment shall be subsequently measured like investments in debt securities classified as available for sale or trading. If the secured party (transferee) has the right by contract or custom to sell or repledge the collateral. 2009.. accrued interest receivable. If the entity has entered into repurchase agreements or securities lending transactions. loans. SEC Speech by Eric Schuppenhauer. b. > > Financial Assets Subject to Prepayment 860-20-35-2. Liabilities incurred by either the secured party or obligor in securities borrowing or resale transactions shall be separately classified. a Swiss entity. Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets (Statement 166). a Delaware limited liability partnership and the U. other beneficial interests.

Present the aggregate of those amounts that are subsequently measured at fair value and those amounts that are subsequently measured using the amortization method (see paragraphs 860-50-35-9 through 35-11) and disclose parenthetically the amount that is subsequently measured at fair value that is included in the aggregate amount. a Swiss entity. SEC Guidance > Assets Subject to Lien 1 Regulation S-X Rule 4-08(b). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). or otherwise subject to lien. a description of the nature of restrictions placed on those assets. If the entity has accepted collateral that it is permitted by contract or custom to sell or repledge. ©2010 KPMG LLP. An entity shall report recognized servicing assets and servicing liabilities that are subsequently measured using the fair value measurement method in a manner that separates those carrying amounts on the face of the statement of financial position from the carrying amounts for separately recognized servicing assets and servicing liabilities that are subsequently measured using the amortization method. To accomplish that separate reporting. an entity may do either of the following: a.S. 124 Subtopic 860-50: Transfers and Servicing—Servicing Assets and Liabilities Note: The content in this Subtopic has been updated for ASU 2009-16. The fair value as of the date of each statement of financial position presented of the portion of that collateral that it has sold or repledged 3. it shall disclose all the following: 1. which is effective for the first annual reporting period that begins after November 15. b. All rights reserved. for example. Associated liabilities. The fair value as of the date of each statement of financial position presented of that collateral 2. 860-50-45-2. See Subtopic 860-10 for more information. Qualitative information about the relationship(s) between those assets and associated liabilities. Information about the sources and uses of that collateral. 2. c. if assets are restricted solely to satisfy a specific obligation. shall be designated and the obligations collateralized briefly identified. Disclosure i. and the approximate amounts thereof. . Assets mortgaged. a Delaware limited liability partnership and the U. Assets subject to lien.Accounting Disclosure Checklist . Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets (Statement 166). pledged. Presentation 860-50-45-1. Display separate line items for the amounts that are subsequently measured using the fair value measurement method and amounts that are subsequently measured using the amortization method. 2009.Annual (12/10) Page 259 of 290 Any assets pledged as collateral that are not reclassified and separately reported in the statement of financial position in accordance with paragraph 860-30-25-5(a) ii.

but not required. Changes in fair value during the period resulting from either of the following: ©2010 KPMG LLP. b. Additions through any of the following: i. to disclose quantitative and qualitative information about the assumptions used to estimate the fair value of those instruments. if applicable. both of the following shall be disclosed: a. The beginning and ending balances 2. All rights reserved. A description of the risks inherent in servicing assets and servicing liabilities and. Quantitative and qualitative information about the assumptions used to estimate fair value (for example. Disclosure of quantitative information about the instruments used to manage the risks inherent in servicing assets and servicing liabilities. including the fair value of those instruments at the beginning and end of the period. The amount of contractually specified servicing fees. late fees. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Delaware limited liability partnership and the U. Recognition of servicing obligations that result from transfers of financial assets.S. For servicing assets and servicing liabilities subsequently measured at fair value. but not limited to. Management's basis for determining its classes of servicing assets and servicing liabilities. d. Purchases of servicing assets ii. For all servicing assets and servicing liabilities. is encouraged but not required. c. Assumptions of servicing obligations iii. all of the following shall be disclosed: a. For each class of servicing assets and servicing liabilities. and prepayment speeds). Section 235-10-50 (in this checklist) provides guidance on disclosures of accounting policies. a Swiss entity. anticipated credit losses. and ancillary fees earned for each period for which results of operations are presented. > > Servicing Assets and Servicing Liabilities Subsequently Measured at Fair Value 860-50-50-3. the following: 1. including. the instruments used to mitigate the income statement effect of changes in fair value of the servicing assets and servicing liabilities. discount rates. Disposals 4.Annual (12/10) Page 260 of 290 > All Entities within the Scope of Subtopic > > All Servicing Assets and Servicing Liabilities 860-50-50-2. the activity in the balance of servicing assets and the activity in the balance of servicing liabilities (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented). An entity that provides such quantitative information is also encouraged. 3. including a description of where each amount is reported in the statement of income. .Accounting Disclosure Checklist .

For each class of servicing assets and servicing liabilities. a Swiss entity. all of the following shall be disclosed: a. c. b. i. the fair value of recognized servicing assets and servicing liabilities at the beginning and end of the period. but not limited to. Amortization 5. Other-than-temporary impairments 7. including. Other changes that affect the balance and a description of those changes. Recognition of servicing obligations that result from transfers of financial assets. For servicing assets and servicing liabilities measured subsequently under the amortization method in paragraph 860-50-35-1(a). [Not Used] d. Purchases of servicing assets ii. 3. See Example 2 (paragraph 860-50-55-27) for an illustration of the disclosure requirement in paragraph 860-50-50-3(a) (in this checklist). Additions through any of the following: i. The risk characteristics of the underlying financial assets used to stratify recognized servicing assets for purposes of measuring impairment in accordance with paragraph 860-50-35-9. b. For each class of servicing assets and servicing liabilities. 5. Assumptions of servicing obligations iii. the following: 1. Other changes that affect the balance and a description of those changes. Disposals 4. Application of valuation allowance to adjust carrying value of servicing assets 6. The beginning and ending balances 2. that fact and the reasons for those changes shall be included in the disclosures about the risk characteristics of the underlying financial assets used to stratify the recognized servicing assets in accordance with this paragraph. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . All rights reserved. ©2010 KPMG LLP.S.Annual (12/10) Page 261 of 290 Changes in valuation inputs or assumptions used in the valuation model ii. See Example 2 (paragraph 860-50-55-27) for an illustration of the disclosure requirement in paragraph 860-50-50-4(a) (in this checklist). member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). [Not Used] > > Servicing Assets and Servicing Liabilities Subsequently Amortized 860-50-50-4. the activity in the balance of servicing assets and the activity in the balance of servicing liabilities (including a description of where changes in the carrying amount are reported in the statement of income for each period for which results of operations are presented). Other changes in fair value and a description of those changes. If the predominant risk characteristics and resulting stratums are changed. .

Beginning and ending balances 2. For each period for which results of operations are presented. . a Swiss entity. the activity by class in any valuation allowance for impairment of recognized servicing assets. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). including all of the following: 1. a Delaware limited liability partnership and the U.Annual (12/10) Page 262 of 290 e. the amount of the cumulative-effect adjustment to retained earnings shall be separately disclosed. If an entity (whether public or nonpublic) elects under paragraph 86050-35-3(d) to subsequently measure a class of servicing assets and servicing liabilities at fair value at the beginning of the fiscal year.S. Aggregate additions charged and recoveries credited to operations 3. > > Servicing Assets and Servicing Liabilities for Which Subsequent Measurement at Fair Value Is Elected as of the Beginning of the Fiscal Year 860-50-50-5. Aggregate write-downs charged against the allowance. All rights reserved. ©2010 KPMG LLP.Accounting Disclosure Checklist .

All rights reserved. 264 265 265 268 274 274 275 276 277 278 278 279 280 286 287 287 288 289 Category of Disclosure Considerations 1 2 3 4 5 6 7 8 9 Topic 905: Agriculture Topic 908: Airlines Topic 910: Contractors—Construction Topic 912: Contractors—Federal Government Topic 915: Development Stage Entities Topic 920: Entertainment—Broadcasters Topic 924: Entertainment—Casinos Topic 926: Entertainment—Films Topic 928: Entertainment—Music 10 Topic 930 Extractive Activities—Mining 11 Topic 952: Franchisors 12 Topic 970: Real Estate—General 13 Topic 972: Real Estate—Common Interest Realty Associations 14 Topic 974: Real Estate—Real Estate Investment Trusts 15 Topic 976: Real Estate—Retail Land 16 Topic 978: Real Estate—Time-Sharing Activities 17 Topic 985: Software 18 Topic 995: U.Accounting Disclosure Checklist . a Delaware limited liability partnership and the U.S. a Swiss entity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Steamship Entities ©2010 KPMG LLP.S.Annual (12/10) Page 263 of 290 Section IV—Index to the Accounting Disclosure Checklist – Industry Guidance Index to Checklist Page Ref. .

they shall be treated as equity with appropriate disclosure of face value. dividend rate. Subtopic 905-360: Agriculture—Property. or revolved. Cooperatives—Patrons Subsection of Subtopic 905-325: Agriculture--Investments--Other Presentation 905-325-45-1. and Equipment Disclosure > Intermediate-Life Plants 905-360-50-1. or savings.Accounting Disclosure Checklist . the patron). Plant. over a number of years. Examples are nonpatronage income from investments in securities. but it is usually at the ©2010 KPMG LLP. and any revolving or retirement plan. the retains shall be classified as noncurrent. negotiability. a Swiss entity. Cooperatives Subsection of Subtopic 905-505: Agriculture—Equity Presentation 905-505-45-1. and income earned on sales or purchases made on a nonpatronage basis. The method used and the dollar amounts assigned to members' products shall be disclosed. If retains are not to be redeemed in the current year by the producer (that is. rental income from nonpatronage activities.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). If a patron is economically dependent on a cooperative for sale of all or a significant portion of annual production. net proceeds. The timing may be specified in the cooperative's bylaws. Generally. Cooperatives may use other terms for earnings. If the retained patronage allocations and per-unit retains have no fixed maturity dates and are subordinated to all debt instruments. All rights reserved. . Cooperatives Subsection of Subtopic 905-330: Agriculture--Inventory Disclosure 905-330-50-1. 905-505-45-4. Disclosure 905-325-50-1. Allocated equities are usually paid. the earnings of cooperatives are classified as either patronage or nonpatronage.Annual (12/10) Page 264 of 290 Applicability 1 Topic 905: Agriculture Cooperatives Subsection of Subtopic 905-205: Agriculture---Presentation of Financial Statements Presentation 905-205-45-1. a Delaware limited liability partnership and the U. Financial statement disclosure of the accumulated costs for intermediatelife plants and estimated useful lives shall be made. subordination agreements. 905-505-45-5. Nonpatronage earnings result from transactions other than those with or for patrons. such as margins. the extent of such transactions shall be disclosed in the financial statements. The excess of revenues over costs resulting from transactions for or with patrons shall be classified as patronage source earnings.

S. a cooperative may elect at times not to allocate patronage earnings or losses. b. 3 Topic 910: Contractors—Construction See also Subtopic 605-35. The allocations shall be presented separately. plus a description of the nature and status of the principal items comprising such aggregate amounts and the basis on which such items are recorded (for example. The amount of progress payments netted against contract costs at the date of the balance sheet. Nonpatronage earnings are frequently not allocated and shall be classified as retained earnings in the equity section.Accounting Disclosure Checklist . Rotable parts and assemblies of significant value are classified along with flight equipment as fixed assets. 905-505-45-6. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). cost or realizable value) b. . Plant and Equipment Presentation > Rotable Parts 908-360-45-1. a Swiss entity. All rights reserved. cooperatives may derive earnings from nonpatronage business and account for these earnings as other entities do. For example. In addition. Revenue Recognition—Construction-Type and ProductionType Contracts.Annual (12/10) Page 265 of 290 discretion of its board of directors. or similar items subject to uncertainty concerning their determination or ultimate realization. Subtopic 908-360: Airlines—Property. Expendable parts are classified as current assets. 2 Topic 908: Airlines Subtopic 908-330: Airlines—Inventory Presentation 908-330-45-1. The aggregate amount included in contract costs representing unapproved change orders. claims. ©2010 KPMG LLP. a Delaware limited liability partnership and the U. Subtopic 910-20: Contractors—Construction—Construction Costs Disclosure 910-20-50-1. Certain transactions of cooperatives may result in unallocated equities. The amounts shall not be classified as current liabilities until the board has formally acted to revolve the equities. Both of the following amounts included in contract costs shall be disclosed: a. Cooperatives—Patrons Subsection of Subtopic 905-605: Agriculture—Revenue Recognition Presentation 905-605-45-2. A cooperative patron shall record the allocation of patronage refunds in either of the followings ways: a. The classification of the allocations to patrons in their financial statements shall follow the recording of the costs or proceeds.

All rights reserved. Interest rates on major receivable items. The entity uses an unclassified balance sheet. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Significant accounting policy disclosures relating to construction contractors include both of the following: a. or within the operating cycle if it is longer than one year. a Swiss entity. The amount b. An entity shall disclose liquidity characteristics of specific assets and liabilities if either of the following conditions is met: a. The portion of retainages not collectible within one year. A description of the nature and status of the principal items comprising the amount c. For amounts representing the recognized sales value of performance under contracts that have not been billed and were not billable at the date of the balance sheet. claims. Both of the following shall be disclosed for receivable amounts maturing after one year: a. the balance sheet. . Information relating to the method of reporting by affiliated entities shall be disclosed. Subtopic 910-310: Contractors—Construction—Receivables Presentation 910-310-45-1. ©2010 KPMG LLP. b. The entity's operating cycle exceeds one year.Annual (12/10) Page 266 of 290 Subtopic 910-235: Contractors—Construction—Notes to Financial Statements Disclosure > Accounting Policies 910-235-50-1.S. expected to be collected after one year. b. Construction contractors shall follow the general disclosure requirements of Subtopic 235-10. For billed or unbilled amounts under contracts representing unapproved change orders. 910-310-50-2. a Delaware limited liability partnership and the U. A general description of the prerequisites for billings c. The portion. if practicable. or similar items subject to uncertainty concerning their determination or ultimate realization. The amounts b. or on classes of receivables. If the operating cycle exceeds one year.Accounting Disclosure Checklist . 910-310-50-3. > Liquidity Characteristics 910-235-50-2. if any. expected to be collected after one year. Disclosure 910-310-50-1. the amounts maturing in each year b. the range of contract durations shall be disclosed. The amount maturing after one year and. or a note to the financial statements. all of the following shall be disclosed: a. shall be classified as noncurrent in a classified balance sheet. if any. The portion. maturing after one year or an indication of the average interest rate or the range of rates on all receivables. shall disclose all of the following: a.

The method of recognizing income (percentage of completion or completed contract) shall be disclosed. a Delaware limited liability partnership and the U. for example. including the amounts of retentions to be paid after one year and. if practicable. all of the following: a. If practicable. 910-405-45-2.Accounting Disclosure Checklist . Inherent hazards or undependable estimates that cause forecasts to be doubtful Subtopic 910-810: Contractors—Construction—Consolidation Presentation 910-810-45-1.S. If receivables include amounts representing balances billed but not paid by customers under contract retainage provisions. Such advances are made to provide a revolving fund and are not applied as partial payment until the contract is nearly or fully completed. An advance received on a cost-plus contract shall not be offset against accumulated costs unless it is a payment on account of work in progress. If the completed-contract method is used. Advances that are payments on account of work in progress shall be shown as a deduction from the related asset. 910-405-50-2.Annual (12/10) Page 267 of 290 910-310-50-4. The amounts b. Subtopic 910-340: Contractors—Construction—Other Assets and Deferred Costs Disclosure 910-340-50-1. expected to be collected after one year c. Subtopic 910-605: Contractors—Construction—Revenue Recognition Disclosure 910-605-50-1. For costs deferred either in anticipation of future sales (precontract costs that are not within the scope of Subtopic 720-15) or as a result of an unapproved change order. Disclosure 910-405-50-1. either of the following: a. The portion. the years in which the amounts are expected to be collected. 910-605-50-2. Subtopic 910-405: Contractors—Construction—Liabilities Presentation > Advances on Cost-Plus Contracts 910-405-45-1. The amounts of advances that are payments on account of work in progress shall be disclosed. the year in which the amounts are expected to be paid. if any. the reason for selecting that method shall be indicated. the policy of deferral and the amounts involved shall be disclosed. Information relating to accounts and retentions payable shall be disclosed. All rights reserved. Numerous short-term contracts for which financial position and results of operations reported on the completed-contract basis would not vary materially from those resulting from use of the percentage-of-completion method b. either in the balance sheet or in a note to the financial statements. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Swiss entity. . Paragraph 810-10-45-14 (in this checklist) explains that a proportionate gross financial statement presentation is not appropriate for an investment in an unincorporated legal entity accounted for by the equity method of accounting unless the investee is in either the construction industry (as discussed in this ©2010 KPMG LLP. a contractor shall disclose.

S. A loss on termination of a contract for default that is not reported as a separate item in the income statement shall be disclosed in the notes to financial statements in conformity with Subtopic 450-20. and only if that is the treatment anticipated in the normal course of business transactions under the contract. while not all-inclusive. Accordingly. . Costs in excess of billings and estimated earnings d. 912-210-45-3. > Contract-Related Assets and Liabilities 912-210-45-7. Other deferred contract costs ©2010 KPMG LLP. amounts due from the government on such contracts is acceptable only to the extent that the advances may under the terms of the agreement be offset in settlement. is a list of assets generally considered to be contract-related and classified as current under the operating cycle concept: a.Accounting Disclosure Checklist . Subtopic 912-20: Contractors—Federal Government--Contract Costs Disclosure > Default Terminations 912-20-50-1. a Swiss entity. > Current Assets and Current Liabilities 912-210-45-6. 4 Topic 912: Contractors—Federal Government See also Subtopic 605-35. Revenue Recognition—Construction-Type and ProductionType Contracts. Contractors whose operating cycle exceeds one year shall classify all contract-related assets and liabilities as current under the operating cycle concept and follow the more specific guidance in Section 210-10-45 in classifying other assets and liabilities. Offsetting of government advances on cost-plus-fixed-fee contracts by. a Delaware limited liability partnership and the U. In such a circumstance the advance is deducted from the related asset. 912-210-45-4. Subtopic 912-210: Contractors—Federal Government—Balance Sheet Presentation > Cost-Plus-Fixed-Fee Contracts > > Offsetting 912-210-45-1. Advances on cost-plus-fixed-fee contracts are usually made for the purpose of providing a revolving fund and are not applied as partial payments until the contract is completed or nears completion. Unbilled contract receivables c. offsetting advances on cost-plus-fixed-fee contracts against receivables in connection with the contracts is appropriate only if it is expected that the advances will be applied in payment of those particular charges. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The following. or against.Annual (12/10) Page 268 of 290 Topic) or an extractive industry (see paragraphs 930-810-45-1 and 932-810-45-1). An advance received on a contract may not be offset against contract work in progress unless it is a payment on account of the contract work in progress. Accounts receivable on contracts (including retentions) b.

Equipment and tooling specifically purchased for. Accrued contract costs c. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). All rights reserved. an individual contract or group of related contracts. > Terminated Contracts 912-225-45-3. Basis for stating amounts related to contracts in progress. 912-210-45-8. Subtopic 912-225: Contractors—Federal Government—Income Statement Presentation > Contracts Subject to Renegotiation 912-225-45-1. The following. Obligations for equipment specifically purchased for.Annual (12/10) Page 269 of 290 e. 912-225-45-4. including policies ©2010 KPMG LLP. a Swiss entity. Accounts payable on contracts (including retentions) b. among others: a. Advance payments on contracts e. and expected to be used solely on. Subtopic 912-235: Contractors—Federal Government—Notes to Financial Statements Disclosure > Accounting Policies 912-235-50-1. Provisions for losses on contracts (see paragraph 605-35-45-2 in this checklist). is a list of liabilities generally considered to be contract-related and classified as current under the operating cycle concept: a. and expected to be used solely on. while not all-inclusive. Amounts offset in accordance with paragraph 912-210-45-1 shall be disclosed. an individual contract or group of related contracts—regardless of the payment terms of the obligations f. renegotiation involves an adjustment of the original contract or selling price. of the selling price is not reasonably assured. the difference between the renegotiation refund and the provision shall be shown as a separate item in the current income statement. . Sales related to terminated contracts shall be separately presented in the income statement.Accounting Disclosure Checklist . 912-225-45-2. a Delaware limited liability partnership and the U.S. the provision should preferably be treated in the income statement as a deduction from sales. or retention. If a renegotiation refund applicable to a particular year is materially different from the provision made in the financial statements originally issued for such year. Renegotiation refunds are commonly referred to as involving a refund of excessive profits. Because a provision for renegotiation refund indicates that the collection. Any items the contractor retains without claim for cost or loss shall remain as inventory or deferred charges in the contractor's accounts. Disclosures by government contractors pursuant to Subtopic 235-10 shall include a description of all of the following accounting policies. Disclosure > Amounts Offset 912-210-50-1. Billings in excess of cost and estimated earnings d. however.

> Termination Claims 912-275-50-2. consideration shall be given to delaying the issuance of financial statements until necessary data are available. . If sufficient information is not available to predict the effect of a very recent termination. the circumstances shall be disclosed in statements issued or available to be issued (as discussed in Section 855-10-25) before the removal of the uncertainty. If the contractor's claim includes items of known controversial nature it shall be stated at the amount estimated to be collectible. 912-275-50-4. Specific criteria used to determine when a contract is substantially complete if the completed-contract method is used. Subtopic 912-275: Contractors—Federal Government—Risks and Uncertainties Disclosure > Contracts Subject to Renegotiation 912-275-50-1. Renegotiation uncertainties.Annual (12/10) Page 270 of 290 with respect to accounting for indirect costs b. Paragraph 912-605-25-22 addresses the effective date of termination. Subtopic 912-255: Contractors—Federal Government—Changing Prices Disclosure > Financial Reporting and Changing Prices For those contractors electing to disclose supplementary information on the effects of changing prices. of the status of the remainder. including the policies with respect to combining and segmenting contracts and the recognition of contract incentives c. 912-275-50-3. In an extreme circumstance involving undeterminable claims. The effect of a contract termination shall be reflected in the financial statements of the contractor in the period in which the termination occurs. or earlier if the termination is a subsequent event occurring before the financial statements are issued or are available to be issued (as discussed in Section 855-1025) and attributable to conditions that existed at the date of the balance sheet. Methods of determining revenues and related costs. by footnote or otherwise. If a particular termination claim or part thereof is so uncertain in amount that it cannot be reasonably estimated. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . it is preferable not to give effect to that part of the claim in the financial statements. In some circumstances it will be impossible to make a reasonable estimate of a termination claim in time for inclusion in the financial statements of the period in which the termination occurs. their significance. then the best information available shall be disclosed in the notes to financial statements in conformity with Topic 450. a Swiss entity. the basis used in determining the amount of the provision (such as the prior years' experience of the contractor or of similar contractors if their experience is available and is used). ©2010 KPMG LLP. If the total of such undeterminable elements is material. Effect may then be given in the statements to those parts of the termination claim that are determinable with reasonable certainty and disclosure made. Methods of measuring extent of progress toward completion if the percentage-of-completion method is used d.S. and renegotiation discussions relating to the current year shall be disclosed. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). see paragraph 912-255-50-1.

Advance payments received before termination may be shown in financial statements after termination as a deduction from the claim receivable.S. as well as claims for profit. deferred charges. it is preferable to record the claim in one account. such as serious disagreement pointing to probable litigation. Government contract receivables usually are shown separately from other receivables in the balance sheet (or otherwise disclosed).S.Accounting Disclosure Checklist . 912-275-50-6. Claims directly against the government shall be segregated from claims against other contractors. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).Annual (12/10) Page 271 of 290 912-275-50-5. government ©2010 KPMG LLP. a Delaware limited liability partnership and the U. A termination claim shall be classified as a current asset. contract performance problems. > > Unbilled Amounts 912-310-45-9. All rights reserved. >> Cost-Plus-Fixed-Fee Contracts 912-310-45-2. procurement cutbacks. disclosure of the circumstances and the potential effects shall be made in the notes to financial statements. 912-310-45-6. and other items. Unbilled amounts (net of unliquidated progress payments) shall be stated separately if the amounts constitute a significant portion of the U. Significant items of a known controversial nature also shall be disclosed in the notes to financial statements. If there are indications that a contract termination may occur and the termination would have a material effect on the contractor's operations. and so forth. Partial payments shall be recorded as reductions of the termination claim receivable. There is a difference in character between billed items and unbilled costs and such amounts shall be presented separately on the balance sheet. Indicators of a potential contract termination include notice of a possible termination. >> Termination Claims 912-310-45-4. a Swiss entity. unless there is an indication of extended delay. The costs and expenses chargeable to the termination claim are given their usual classification in the accounts. The total of termination claims shall be presented separately from other receivables. 912-310-45-8. Although a claim may be composed of several elements representing reimbursable items of special equipment. which would exclude it from this classification. inventories. Subtopic 912-310: Contractors—Federal Government—Receivables Presentation > Balance Sheet >> Government Contract Receivables 912-310-45-1. . Paragraph 420-10-50-1 (in this checklist) provides guidance on information about contract terminations to be disclosed in notes to financial statements. The government contractor is subject to a degree of risk different from its commercial counterpart because of the unilateral contract right of the government to terminate a contract. 912-310-45-7. 912-310-45-5. 912-275-50-7. although estimates of ultimate amounts to be realized may not be determinable.

The manner of reporting depends on whether the entity uses the direct method or indirect method as follows: a. The termination claim shall be separately disclosed. Entities that use the direct method in reporting cash flows from operating activities shall show progress and advance payments received on contracts as a separate major class of cash receipts.Annual (12/10) Page 272 of 290 contract receivables. Advance payments received on the contract before its termination shown as a deduction from the claim receivable in accordance with paragraph 912-31045-4 (in this checklist) shall be explained in a footnote disclosure. A contractor's accounting policies with respect to costs included in inventory shall be disclosed. progress. full disclosure of the essential facts shall be made. All rights reserved. Provisions for renegotiation refunds shall be classified as current liabilities. and advance payments received on contracts shall be reported gross. Indirect method. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Direct method. > Cash Flow Statement 912-310-45-11. a Delaware limited liability partnership and the U. the uncertainties resulting from the possibilities of renegotiation are usually such that separate presentation shall be given in the financial statements. >> Fixed-Price Contract Terminations 912-405-45-3. In reporting cash flows from operating activities.Accounting Disclosure Checklist . > Progress Payments 912-310-50-3. Subtopic 912-330: Contractors—Federal Government--Inventory Disclosure > Contract Inventory 912-330-50-1. > Advance Payments 912-310-50-4. b. For those parts of the termination claim that are included in financial statements after termination. The amount of progress payments offset against unbilled receivables shall be disclosed.S. a Swiss entity. 912-405-45-2. regardless of whether those payments have been applied against unbilled contract receivables or accumulated costs of contracts in progress in the balance sheet. Loans negotiated on the security of the termination claim shall be shown ©2010 KPMG LLP. Entities that use the indirect method shall show progress and advance payments as a separate adjustment in reconciling net income to net cash provided for operating activities. Subtopic 912-405: Contractors—Federal Government—Liabilities Presentation > Balance Sheet >> Contracts Subject to Renegotiation 912-405-45-1. Disclosure > Termination Claims 912-310-50-1. If government contracts and subcontracts subject to renegotiation constitute a substantial part of the business done. . 912-310-50-2.

Contractors shall consider disclosing the effect.S. or if an entity is facing renegotiation for the first time and no reliable precedent is available. Subtopic 912-605: Contractors—Federal Government—Revenue Recognition Disclosure > Convenience Terminations 912-605-50-1 All of the contractor's own cost and profit elements included in the termination claim shall be separately disclosed. disclosure of these circumstances and the consequent uncertainties is required. and shall be presented in the balance sheet as liabilities. 912-405-45-4. the effect of a new or amended renegotiation act cannot be predicted within reasonable limits. To the extent that the amounts of subcontractors' claims are not reasonably determinable. If progress and advance payments are accounted for as borrowings. > Termination Claims 912-405-50-2. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). by footnote or otherwise. Disclosure > Contracts Subject to Renegotiation 912-405-50-1. a Delaware limited liability partnership and the U. > Cash Flow Statement—Progress and Advance Payments 912-405-45-7. of the government's rights with respect to any excess pension plan assets in the event of a plan termination.S. the general nature of the related transactions and the accounting policy applied thereto shall be disclosed in the notes to the financial statements. Financial statements issued before the termination claim is recorded shall disclose. If a reasonable estimate cannot be made. even though guaranteed in whole or in part by the government. if any. disclosure shall be made by footnote or otherwise in the financial statements. government contracts. 912-405-45-6. . 912-405-50-3.S. Termination loans are liabilities to third parties. a Swiss entity. such amounts shall be reported as cash received from financing activities. If subcontract costs or the cost of special equipment to perform the contract are excluded from sales and cost of sales. Subtopic 912-705: Contractors—Federal Government—Cost of Sales and Services Disclosure > Costs Excluded from Both Sales and Costs of Sales 912-705-50-1. government contracts or amounts received in excess of costs incurred under U. with appropriate cross-reference to the related claim or claims. Advance payments received in excess of unbilled receivables and accumulated costs of contracts in progress shall be classified as a liability with captions such as advance payments on U.Annual (12/10) Page 273 of 290 as current liabilities. Subtopic 912-715: Contractors—Federal Government—Compensation— Retirement Benefits Disclosure > Contractors' Compensation and Postretirement Employee Benefit Costs 912-715-50-1. the relationship of advance payment or guaranteed loan liabilities to a possible termination claim receivable. All rights reserved. for example.Accounting Disclosure Checklist . ©2010 KPMG LLP.

a Delaware limited liability partnership and the U. The financial statements for the first fiscal year in which an entity is no longer considered to be in the development stage shall disclose that in prior years it had been in the development stage. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 915-215-45-1. 6 Topic 920: Entertainment—Broadcasters Subtopic 920-350: Entertainment—Broadcasters—Intangibles—Goodwill and Other Presentation >> License Agreements for Program Material 920-350-45-1. >> Network Affiliation Agreements 920-350-45-2. Disclosure 915-235-50-1. b. The financial statements shall be identified as those of a development stage entity. Include the following additional information on the face of the financial statements. All rights reserved. Equity. Network affiliation agreements and other such items ordinarily are presented in the balance sheet of a broadcaster as intangible assets. d. Cumulative amounts of cash inflows and outflows from inception. A statement of stockholders’ equity showing from inception for each issuance: 1 The date and number of equity securities issued for cash and other consideration.S. 3 For noncash issuances. the nature of the consideration and the basis for assigning the amounts. 915-225-45-1. a Swiss entity.Annual (12/10) Page 274 of 290 5 Topic 915: Development Stage Entities Presentation 915-205-45-4. and 915-230-45-1. For disclosure guidance on items that comprise shareholders' equity. 2 The dollar amount (per share and in total) assigned to the consideration received for equity securities (whether cash or not). see Topic 505. The financial statements shall include a description of the nature of the development stage activities in which the entity is engaged. The asset recorded for the rights acquired under a license agreement for program material shall be segregated on the balance sheet between current and noncurrent based on estimated time of usage.Accounting Disclosure Checklist . Cumulative amounts of revenues and expenses from inception of development stage. 915-235-50-2. 915-210-45-1. Cumulative net losses with a descriptive caption such as “deficit accumulated during the development stage” in the equity section. c. a. . Subtopic 920-405: Entertainment—Broadcasters—Liabilities ©2010 KPMG LLP.

hotel and restaurant operations also should be separately presented on the face of the income statement. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). 2010-16. an entity shall provide the disclosures required by paragraphs 250-10-50-1 through 50-3. 7 Topic 924: Entertainment—Casinos Note: The FASB recently issued Accounting Standards Update No. Under this ASU. Entertainment—Casinos (Topic 924): Accruals for Casino Jackpot Liabilities (EITF 09-F). All rights reserved. > Subtopic 924-10: Entertainment—Casinos—Overall SEC Guidance > Income Statement Presentation of Expenses 1 SAB Topic 11. minimum amount of a slot machine payout for a specific combination. . Early adoption is permitted. Subtopic 920-440: Entertainment—Broadcasters—Commitments Disclosure > License Agreements for Program Material Where Criteria for Recognition Have Not Been Met 920-440-50-1.S. The liability recorded for the obligation incurred under a license agreement for program material shall be segregated between current and noncurrent based on the payment terms. beginning on or after December 15. hotel and restaurant operations. a Delaware limited liability partnership and the U. Subtopic 924-280: Entertainment—Casinos—Segment Reporting Disclosure > Geographic Segments 924-280-50-1.L. Registrants having casino-hotel operations present separately within the income statement amounts of revenue attributable to casino. a Swiss entity. Broadcasters shall disclose commitments for license agreements that have been executed but were not reported because they do not meet the conditions for recording a liability as specified in paragraph 920-350-25-2.Accounting Disclosure Checklist . a liability should not be recorded. and interim periods within those fiscal years. ASU 2010-16 is effective for fiscal years. In the period of adoption. if an entity can avoid payment of the jackpot because there is no legal or regulatory requirement for payment if no one wins (as is the case for base jackpots in many jurisdictions). Operations of a nonpublic business entity with a casino property that ©2010 KPMG LLP. Progressive jackpots are larger incentive jackpots paid out for a particular reel combination on a slot machine. 2010. The Staff believes that the expenses attributable to each of the separate revenue producing activities of casino.Annual (12/10) Page 275 of 290 Presentation >> License Agreement for Program Material 920-405-45-1. Entities following an accounting policy that is inconsistent with the ASU will be expected to apply the guidance prospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the ASU is initially applied. A base jackpot is a fixed. respectively.

entertainment. However. or in development or preproduction) separately for theatrical films and direct-to-television product. completed and not released. in production. because of the natural interdependence of such operations. or comps) represent goods and services. a Delaware limited liability partnership and the U. an allocation of costs among them to determine relative contributions to income (operating profit) would be largely arbitrary and. an entity shall provide additional information. The retail amount of promotional allowances shall not be included in gross revenues and charged to operating expenses because that would overstate both revenues and expenses. and parking. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). An entity shall disclose the components of film costs (including released. Disclosure > Film Costs 926-20-50-1. An entity shall disclose the percentage of unamortized film costs for released films. Regardless of whether it presents a classified or unclassified balance sheet. 926-20-50-2. the retail amount of promotional allowances may be included in gross revenues and offset by deducting it from gross revenues on the face of the income statement. restaurant. Examples are rooms.Accounting Disclosure Checklist . An entity shall disclose its operating cycle if it is other than 12 months. If an entity presents a classified balance sheet. nonpublic casino business entities operating in various legal jurisdictions may have geographic segments and shall therefore report such information. All rights reserved. The operating revenues of each are generally separately determinable. excluding acquired film libraries. 924-605-45-2.Annual (12/10) Page 276 of 290 also includes a hotel. it shall classify film costs as noncurrent on the face of the balance sheet. and the like are generally considered as one industry segment. a Swiss entity. therefore. 926-20-50-3. food. Promotional allowances (complimentaries. that a casino gives to customers as an inducement to gamble at that establishment. However. that it expects to amortize within three years from the date of the balance sheet. . Subtopic 924-605: Entertainment—Casinos—Revenue Recognition Presentation > Promotional Allowances 924-605-45-1. parking garage. An operating cycle is presumed to be 12 months. which would be accounted for as revenue if sold. including the period required to reach an amortization level of 80 percent. ©2010 KPMG LLP.S. 8 Topic 926: Entertainment—Films Subtopic 926-20: Entertainment—Films—Other Assets Presentation > Film Costs 926-20-45-1. If that percentage is less than 80 percent. not meaningful. an entity shall disclose in the notes to financial statements the portion of the costs of its completed films that are expected to be amortized during the upcoming operating cycle. However. beverages.

9 Topic 928: Entertainment—Music Subtopic 928-340: Entertainment—Music—Other Assets and Deferred Costs Presentation > Licensor Accounting > > Artist Compensation Costs—Advance Royalties 928-340-45-1. Disclosure > Licensor Accounting >> Record Master Costs ©2010 KPMG LLP. An entity shall disclose its methods of accounting for participation costs.Annual (12/10) Page 277 of 290 926-20-50-4. Advance royalties shall be classified as current and noncurrent assets. a Swiss entity. An entity shall disclose its methods of accounting for film costs. exploitation costs. and manufacturing costs as operating activities in the statement of cash flows. a Delaware limited liability partnership and the U. and the remaining amortization period. For acquired film libraries. and it shall include the amortization of film costs in the reconciliation of net income to net cash flows from operating activities. an entity shall disclose the amount of remaining unamortized costs. as appropriate. Subtopic 926-230: Entertainment—Films—Statement of Cash Flows Presentation > Reporting Cash Flows 926-230-45-1. Subtopic 926-605: Entertainment—Films—Revenue Recognition Disclosure > Revenue 926-605-50-1. Subtopic 926-405: Entertainment—Films—Liabilities Disclosure > Accrued Participation Liabilities 926-405-50-1. > Participation Costs 926-405-50-2. An entity shall disclose its methods of accounting for revenue. participation costs.Accounting Disclosure Checklist . Subtopic 926-720: Entertainment—Films—Other Expenses Disclosure > Exploitation Costs 926-720-50-1. the method of amortization. An entity shall disclose its methods of accounting for exploitation costs.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). An entity shall disclose the amount of accrued participation liabilities that it expects to pay during the upcoming operating cycle. An entity shall report cash outflows for film costs. . > Film Libraries 926-20-50-5. All rights reserved.

As indicated in that paragraph. the estimated loss should be reported as an extraordinary item. If an entity accounts for its obligation under the Coal Industry Retiree Health Benefit Act of 1992 as a loss (see paragraph 930-715-25-1) in accordance with Subtopic 450-20. 11 Topic 952: Franchisors Subtopic 952-440: Franchisors—Commitments Disclosure 952-440-50-1. a Delaware limited liability partnership and the U. All rights reserved.Annual (12/10) Page 278 of 290 928-340-50-1. or transporting extracted mineral resources. Commitments for artist advances payable in future years and future royalty guarantees shall be disclosed. Subtopic 930-810: Extractive Activities—Mining—Consolidation Presentation > Proportionate Consolidation 930-810-45-1. an entity is in an extractive industry only if its activities are limited to the extraction of mineral resources (such as oil and gas exploration and production) and not if its activities involve related activities such as refining. . Disclosure 930-715-50-1. 10 Topic 930: Extractive Activities—Mining Other Presentation Matters > Subtopic 930-715: Extractive Activities—Mining—Compensation—Retirement Benefits 930-715-45-1.S. including a description of the services that the franchisor has agreed to provide for agreements that have not yet been substantially performed. including the estimated amount of its total obligation and the method of accounting adopted. Subtopic 928-440: Entertainment—Music—Commitments Disclosure > Licensor Accounting > > Commitments for Artist Advances and Royalty Guarantees 928-440-50-1.Accounting Disclosure Checklist . shall be disclosed. a Swiss entity. An entity shall disclose the impact of the Act. Paragraph 810-10-45-14 (in this checklist) explains that a proportionate gross financial statement presentation is not appropriate for an investment in an unincorporated legal entity accounted for by the equity method of accounting unless the investee is in either the construction industry (see paragraph 910-81045-1 in this checklist) or an extractive industry (as discussed in this Topic and paragraph 932-810-45-1). The nature of all significant commitments and obligations resulting from franchise agreements. The portion of the record master cost borne by the record company that is recorded as assets shall be disclosed separately. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). ©2010 KPMG LLP. marketing.

2 SAB Topic 7. disclosure of that fact shall be made. Subtopic 970-230: Real Estate—General—Statement of Cash Flows ©2010 KPMG LLP. Any amounts originally deferred but later recognized because uncertainties regarding the collectibility of franchise fees are resolved also shall be disclosed. All rights reserved. If it is probable that initial franchise fee revenue will decline in the future because sales predictably reach a saturation point. and the periods in which such fees become payable by the franchisee shall be disclosed. Although Rules 14a-3 and 14c-3 permit the omission of financial statement schedules from annual reports to shareholders. 952-605-50-3. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). the sales price of such franchises. Franchised outlets in operation d. See paragraph 948-310-S99-1 for the required supplemental schedule disclosing mortgage loans on real estate. the number of the following shall be disclosed: a. 952-605-50-2. a Swiss entity. Rule 12-29. If no basis for estimating the collectibility of specific franchise fees exists. . Initial franchise fees shall be segregated from other franchise fee revenue if they are significant. Disclosure of the relative contribution to net income of initial franchise fees also is required if not apparent from the relative amounts of revenue. If there are significant changes in franchisor-owned outlets or franchised outlets during the period.Accounting Disclosure Checklist . 12 Topic 970: Real Estate—General Subtopic 970-10: Real Estate—General—Overall SEC Guidance > Supplemental Schedules 1 Regulation S-X. Franchises sold b.S. a Delaware limited liability partnership and the U. the notes to the financial statements shall disclose whether the installment or cost recovery method is being used to account for the related franchise fee revenue. Franchisor-owned outlets in operation.C. That may be done by segregating revenue and costs related to franchised outlets. Furthermore. Disclosure 952-605-50-1. the revenue and related costs deferred (both currently and on a cumulative basis). Franchises purchased during the period c. the staff is of the view that the information required by these schedules is of such significance within the real estate industry that the information should be included in the financial statements in the annual report to shareholders.Annual (12/10) Page 279 of 290 Subtopic 952-605: Franchisors—Revenue Recognition Other Presentation Matters 952-605-45-1. Revenue and costs related to franchisor-owned outlets shall be distinguished from revenue and costs related to franchised outlets when practicable.

The real property is owned by undivided interests. Each investor is responsible to pay only its pro rata share of expenses. If real estate is acquired by a real estate developer to be subdivided.Annual (12/10) Page 280 of 290 Presentation 970-230-45-1. or operations of real estate owned. Schedule III—Real estate and accumulated depreciation. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . The schedule prescribed by § 210. Assets transferred to the common interest realty association by the developer and recognized in the balance sheet shall be reported as additions to the operating fund balance (or property fund. c. A common interest realty association may not need to use fund reporting if it does ©2010 KPMG LLP. or interests in other persons a substantial portion of whose business is that of acquiring and holding real estate or interests in real estate for investment. then the cash payment to purchase that real estate would be classified as an operating cash flow because the real estate is acquired specifically for resale and is similar to inventory in other businesses. improved. Regulation S-X Rule 12-28. . if such a fund is established). Subtopic 970-810: Real Estate—General—Consolidation Presentation > Undivided Interests 970-810-45-1. and Equipment SEC Guidance > Supplemental Schedules 1 Regulation S-X Rule 5-04(c). e.S. An investment in real property may be presented by recording the undivided interest in the assets.12–28 shall be filed for real estate (and the related accumulated depreciation) held by persons a substantial portion of whose business is that of acquiring and holding for investment real estate or interests in real estate. a Swiss entity. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). sale. Each investor is entitled to only its pro rata share of income. The approval of two or more of the owners is not required for decisions regarding the financing. All rights reserved. revenue. See paragraph 970-360-S99-1. development. for the requirements of Schedule III—Real Estate and Accumulated Depreciation. 13 Topic 972: Real Estate—Common Interest Realty Associations Subtopic 972-205: Real Estate—Common Interest Realty Associations— Presentation of Financial Statements Presentation > Fund Reporting 972-205-45-1. liabilities. Real estate used in the business shall be excluded from the schedule. Each investor is severally liable only for indebtedness it incurs in connection with its interest in the property. Subtopic 970-360: Real Estate—General—Property. and expenses of the venture if all of the following conditions are met: a. Plant. d. and sold in individual lots. b.

if a nonfund reporting approach is used. liabilities. Some common interest realty associations may also conduct commercial operations or separate business activities. amounts assessed for future major repairs and replacements shall be reported in the major repair and replacement fund separately from transactions in the operating fund. All rights reserved. in addition to their primary activities. Common interest realty associations that assess owners annually for portions of future major repairs and replacements shall report those assessed amounts separately from amounts assessed for normal operations. 972-205-45-2. readers should substitute the term members' equity for the term fund balance if financial statements using nonfund reporting are presented. > Nonfund Reporting 972-205-45-4. liabilities. A statement of cash flows e. 972-205-45-8. Full presentations of financial statements for common interest realty associations presented in conformity with generally accepted accounting principles (GAAP) shall include all of the following: a. Furthermore.S. prepaid expenses. and the fund balance specifically associated with the common interest ©2010 KPMG LLP.Annual (12/10) Page 281 of 290 not assess for future major repairs and replacements. the fund for major repairs and replacements would be presented as an appropriation of retained earnings in such financial statements. 972-205-45-5. Such activities may be reported on as one or more additional funds. a Delaware limited liability partnership and the U. Transfers between funds that are not part of the current-period operating revenues shall be presented only in a statement of changes in fund balances or in a statement of changes in members' equity. Information about the operating fund shall present assets. 972-205-45-3. If the amount of property and equipment held by a common interest realty association is significant. A statement of changes in fund balances or a statement of changes in members' equity if nonfund reporting is used d. However. Notes to financial statements. the operating fund shall include information about cash. fund reporting is considered more informative to users. a Swiss entity. Property and equipment. are generally reported in the operating fund. If a common interest realty association uses fund reporting. Nonfund reporting is an acceptable alternative to fund reporting. the common interest realty association may account for it in a separate fund.Accounting Disclosure Checklist . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). assessments receivable. and the fund balance specifically associated with the common interest realty association's normal maintenance and service activities. Because this Subtopic primarily addresses the fund reporting approach. > Financial Statement Requirements 972-205-45-6. For example. The presentation of information about the fund for major repairs and replacements (the replacement fund) shall include information about assets. if reported as assets. A statement of revenues and expenses c. 972-205-45-7. such as rental operations. . and trade payables. A balance sheet b.

Notes to financial statements f. other revenues. and short-term investments.S. A balance sheet b. roads. Depreciation shall be reported as an expense of the fund in which the asset is reported. 972-205-45-16. for the future replacement of roofs. Reported revenues shall include all charges to tenant-shareholders and other income. Permanent transfers between funds shall be presented as interfund transfers in the statement of changes in fund balances. a Delaware limited liability partnership and the U. Those assets usually consist of cash. and so forth. All common interest realty association activities. a separate ©2010 KPMG LLP. a Swiss entity. shall be presented in the operating fund in the statement of revenues and expenses unless the common interest realty association has other funds such as a deferred maintenance fund or a capital improvement fund. The statement of revenues and expenses shall present information about all assessments.Accounting Disclosure Checklist . except for replacement fund activities. A statement of changes in shareholders' equity d. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Common interest realty associations having significant commercial operations. and expenses. The statement may be presented separately or may be combined with the statement of revenues and expenses. . A statement of retained earnings (deficit) may be combined with the statement of operations. should consider presenting classified balance sheets. A statement of operations c. > Unclassified Balance Sheets 972-205-45-13. marketable securities. Common interest realty associations can generally present unclassified balance sheets. > Cooperatives 972-205-45-14. Statements of operations of cooperatives shall present information about all revenues and expenses. they shall be considered for disclosure in the notes to the financial statements. Corresponding interfund receivables and payables shall be presented to highlight the transactions resulting in those balances and to provide information about amounts assessed and collected that were not used in accordance with the budget. Cooperatives shall present all of the following: a. All rights reserved. The financial statements shall include a statement of changes in fund balances. not as revenues. The supplementary information required by paragraph 972-235-50-3 (in this checklist). and furniture (some common interest realty associations may have a deferred maintenance fund which is used for painting or refinishing of building exteriors). If per-share data are deemed useful. > Interfund Receivables and Payables 972-205-45-12. 972-205-45-9. A statement of cash flows e. however. If there is activity in paid-in capital. Liabilities in that fund generally are for work done on contracts for major repairs and replacements. 972-205-45-15.Annual (12/10) Page 282 of 290 realty association's long-term major repair and replacement activities. 972-205-45-10. for example. The fund includes all assets that are held. which reconciles beginning and ending fund balances with results of operations for the period.

> Future Major Repairs and Replacements 972-235-50-2. b.Annual (12/10) Page 283 of 290 statement of shareholders' equity should be prepared. Amounts assessed for major repairs and replacements in the current period. the notes to a common interest realty association's financial statements shall also include disclosures about all of the following: a. Requirements. homeowners association. a Swiss entity.Accounting Disclosure Checklist . and time-share associations may disclose the number of weeks. if any e. and the number of units. A statement that funds. All rights reserved. if any. The number of units (shares for cooperative housing corporations and weeks for time-share associations) owned by the developer. Disclosures about such funding shall include all of the following: a. Disclosure > Cooperatives 972-205-50-1. are being accumulated based on estimated future (or current) costs. A common interest realty association shall disclose information in its notes to financial statements about its funding for future major repairs and replacements. for example. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The common interest realty association's legal form (corporation or association) and that of the entity for which it provides services (for example.S. A statement indicating whether a study was conducted to estimate the remaining useful lives of common property components and the costs of future major repairs and replacements. and compliance with that policy c. A description of the common interest realty association's funding policy. that actual expenditures may vary from these estimates. Common interest realty associations that fund future major repairs and replacements by special assessments or borrowings when needs occur shall ©2010 KPMG LLP. In addition to disclosures required by generally accepted accounting principles (GAAP) for other entities. condominium. Allocating a portion of retained earnings to an amount equal to accumulated depreciation is an unacceptable practice. Components of retained earnings or deficit shall not be disclosed. Subtopic 972-235: Real Estate—Common Interest Realty Associations—Notes to Financial Statements Disclosure 972-235-50-1. if any. Services (such as maintenance) and subsidies provided by the developer c. a Delaware limited liability partnership and the U. cooperative). In place of the number of units. . Federal Housing Administration often has such requirements) to accumulate funds for future major repairs and replacements and the common interest realty association's compliance or lack of compliance with them b. if any. in statutes or the common interest realty association's documents (or mortgage or governmental bodies funding requirements. areas it controls. and that the variations may be material d. cooperative housing corporations may disclose the number of shares.

Accounting Disclosure Checklist . if any. > Depreciation 972-360-50-3. All property owned by a cooperative shall be presented on its balance sheets.Annual (12/10) Page 284 of 290 disclose that information. There is no requirement for common interest realty associations to obtain studies prepared by professional engineers. Estimates of current or future costs of future major repairs and replacements of all existing components. a Delaware limited liability partnership and the U. Depreciation expense for the period ©2010 KPMG LLP. and Equipment Disclosure > General Information 972-360-50-1. that is not recognized as assets in the common interest realty association's balance sheet d. The basis for calculations (including assumptions. Plant. A presentation of components to be repaired and replaced. estimates of current or future replacement costs. A description of common property to which the common interest realty association has title. > Required Supplementary Information 972-235-50-3. estimates of the remaining useful lives of those components. All of the following information about a common interest realty association's common property shall be disclosed in the notes to its financial statements: a. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). b. The common interest realty association's responsibility to preserve and maintain the common property e. Methods used to determine the costs 3. Sources used 5. For property and equipment recognized as assets by common interest realty associations the following information shall be disclosed: a. . including: 1. The accounting policy for recognition and measurement of common property b. and amounts of funds accumulated for each to the extent designated by the board. such as roofs. about interest and inflation rates) 4. Terms and conditions of existing land or recreation leases f. Estimated amounts required 2. Subtopic 972-360: Real Estate—Common Interest Realty Associations— Property. All rights reserved. 972-360-50-2.S. made for this purpose. A description of common property recognized as assets in the common interest realty association's balance sheet c. Common interest realty associations shall disclose the following as unaudited supplementary information: a. or other evidence of ownership. The dates of studies. The estimates may be made by the board of directors or estimates obtained from licensed contractors. a Swiss entity. if any. Restrictions on the use or disposition of the common property.

the notes to a common interest realty ©2010 KPMG LLP. The proposed use for funds collected in special assessments b. If 10 percent or more of a common interest realty association's revenues are derived from any one source. > Significant Sources of Revenue 972-605-50-2. laundry and vending machine income. Subtopic 972-740: Real Estate—Common Interest Realty Associations—Income Taxes Presentation 972-740-45-1. they may be presented in the same manner as other operating expenses in the statement of revenue and expenses. Information about revenues shall include amounts for regular and special assessments from members and amounts for such items as assessments charged to the developer. Balances of major classes of depreciable assets. Interest earned shall be presented as revenue of the appropriate fund unless the common interest realty association has a specific policy to treat it otherwise. Accumulated depreciation. or specialuse charges from members and nonmembers. Because income taxes are generally not related to the excess of revenues over expenses as in commercial entities.Accounting Disclosure Checklist . Disclosure 972-740-50-1. Individual categories of revenues may be combined if not material. Disclosure 972-605-50-1. at the reporting date d. All rights reserved. interest income. regardless of whether they have been collected or expended. developer contributions and subsidies. A general description of the method or methods used in computing depreciation for major classes of depreciable assets. the notes to a common interest realty association's financial statements shall also include disclosures about both of the following: a.Annual (12/10) Page 285 of 290 b. Subtopic 972-605: Real Estate—Common Interest Realty Associations—Revenue Recognition Presentation 972-605-45-1.S. at the reporting date c. a Delaware limited liability partnership and the U. Common interest realty associations should follow the guidance in Topic 740. Assessments that were used for purposes other than those for which they were designated. Periodic assessments for funding future major repairs and replacements shall be reported in the replacement fund in statements of revenues and expenses in the periods in which they are assessed. by nature or function. The developer or other parties may provide the common interest realty association with some of its revenues. a Swiss entity. 972-605-45-2. either by major classes of depreciable assets or in total. In addition to disclosures required by generally accepted accounting principles (GAAP) for other entities. lawsuit settlements. that fact and the amount of revenue from each source shall be disclosed. In addition to disclosures required by generally accepted accounting principles (GAAP) for other entities. . member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”).

Annual (12/10) Page 286 of 290 association's financial statements shall include disclosures about both of the following: a. officers. Credits from taxing authorities that will be phased out in future reporting periods. > Balance Sheet Presentation 2 Regulation S-X Rule 3-15(a)(2). The trust's status as a real estate investment trust under applicable provisions of the Internal Revenue Code as amended shall be stated in a note referred to in the appropriate statements. maintenance. g. return of capital). The balance sheet required by § 210.5–03.5–02 shall set forth in lieu of the captions required by § 210. ordinary income. The common interest realty association's income tax filing status and its liability for income taxes b.3–04 shall be modified similarly. The balance of undistributed income from other than gain or loss on sale of properties and b.. less applicable income tax. Such services may require disclosure in conformity with Topic 850. or developers may provide common interest realty associations with insurance. All rights reserved. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The tax status of distributions per unit shall be stated (e. capital gain. Some individual board members. Subtopic 974-605: Real Estate—Real Estate Investment Trusts—Revenue Recognition Presentation > Operating Support of the Real Estate Investment Trust by the Adviser ©2010 KPMG LLP.31(a)(3): a. a Delaware limited liability partnership and the U. Such note shall also indicate briefly the principal present assumptions on which the trust has relied in making or not making provisions for Federal income taxes. and b.5–03 shall include the following additional captions between those required by § 210. The income statement prepared pursuant to § 210.Accounting Disclosure Checklist . gain or loss on sale of properties.15 and 16: a. or management services. a Swiss entity. accumulated undistributed net realized gain or loss on sale of properties. Subtopic 972-850: Real Estate—Common Interest Realty Associations—Related Party Disclosures Disclosure 972-850-50-1. .S. 14 Topic 974: Real Estate—Real Estate Investment Trusts Subtopic 974-10: Real Estate—Real Estate Investment Trusts—Overall SEC Guidance > Income Statement Presentation 1 Regulation S-X Rule 3-15(a)(1). The information specified in §210. income or loss before gain or loss on sale of properties.5–02. extraordinary items and cumulative effects of accounting changes.

a deduction from notes receivable for the allowance for uncollectibles (see paragraphs 978-310-35-5 through 35-6). Subtopic 976-330: Real Estate—Retail Land—Inventory Disclosure 976-330-50-1. including sales of the notes. All rights reserved. Disclosures by entities with retail land sales operations shall include all of the following: a. The weighted average and range of stated interest rates of receivables. Recorded obligations for improvements. The effect of the operating support transactions described in paragraphs 974-605-25-2 and 974-605-50-1 (in this checklist) shall be reported separately in the income statement. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). a Swiss entity. Maturities of accounts receivable for each of the five years following the date of the financial statements b. shall be reported in the statement of cash flows as cash flows from operating activities. Delinquent accounts receivable and the method(s) for determining delinquency c. Estimated total costs and estimated dates of expenditures for improvements for major areas from which sales are being made over each of the five years following the date of the financial statements b. . and a deduction ©2010 KPMG LLP. Changes in time-sharing notes receivable. A time-share seller’s balance sheet shall include gross notes receivable from time-sharing sales. Disclosures by entities with retail land sales operations shall include both of the following: a.S.Accounting Disclosure Checklist . 16 Topic 978: Real Estate—Time Sharing Activities Subtopic 978-230: Real Estate—Time-Sharing Activities—Statement of Cash Flows Presentation 978-230-45-1. Subtopic 978-310: Real Estate—Time Sharing Activities—Receivables Presentation 978-310-45-1. a Delaware limited liability partnership and the U. Disclosure > Operating Support of the Real Estate Investment Trust by the Adviser 974-605-50-1. A real estate investment trust with operating support from its adviser shall make full disclosure of the relationship between the parties and the nature and amount of the transactions.Annual (12/10) Page 287 of 290 974-605-45-1. 15 Topic 976: Real Estate—Retail Land Subtopic 976-310: Real Estate—Retail Land—Receivables Disclosure 976-310-50-1.

The seller’s policies with respect to meeting the criteria for buyer’s commitment and collectibility of sales prices in paragraphs 360-20-40-5(b) and 360-20-40-50(b). c. Disclosure 985-20-50-1. The weighted average and range of stated interest rates of notes receivable. Because amortization expense of capitalized software costs relates to a software product that is marketed to others. If the developer sells receivables with recourse. and changes in estimate associated with prior-period sales. e. a Delaware limited liability partnership and the U. The estimated cost to complete improvements and promised amenities. In addition to the information otherwise required by generally accepted accounting principles (GAAP). additions associated with current-period sales.Accounting Disclosure Checklist . b. the expense shall be charged to cost of sales or a similar expense category. 17 Topic 985: Software Subtopic 985-20: Software—Costs of Software to Be Sold. b. The total amount charged to expense in each income statement presented ©2010 KPMG LLP. Subtopic 978-330: Real Estate—Time Sharing Activities—Inventory Disclosure 978-330-50-1. Both of the following shall be disclosed in the financial statements: a. In an entity's balance sheet. Unamortized computer software costs included in each balance sheet presented. the seller shall provide the same disclosure of activity on receivables sold. .S. the financial statements of entities with timesharing transactions shall disclose all of the following: a. direct writeoffs charged against the allowance. 985-20-45-2. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). As noted in paragraph 978-330-35-1.Annual (12/10) Page 288 of 290 from notes receivable for any profit deferred under Subtopic 360-20. Leased. The total of the notes receivable balances displayed with the various maturity dates shall be reconciled to the balance-sheet amount of notes receivable. d. including the balance in the allowance at the beginning and end of each period. the effects of changes in estimate in the relative sales value method shall be disclosed in accordance with Topic 250. All rights reserved. or Marketed Presentation 985-20-45-1. capitalized software costs having a life of more than one year or one operating cycle shall be presented as an other asset because the costs are an amortizable intangible asset. The effects of changes in estimates used to perform the relative sales value method shall be disclosed in accordance with paragraph 250-10-50-4 (in this checklist). respectively. a Swiss entity. The activity in the allowance for uncollectibles. Disclosure 978-310-50-1. Maturities of notes receivable for each of the five years following the date of the financial statements and in the aggregate for all years thereafter.

steamship entities: a.S. 985-20-50-2. Software (Topic 985): Certain Revenue Arrangements That Include Software Elements. 18 Topic 995: U.Annual (12/10) Page 289 of 290 for both of the following: 1 Amortization of capitalized computer software costs 2 Amounts written down to net realizable value. a Swiss entity. Subtopic 985-605: Software—Revenue Recognition This Subtopic is subject to Pending Content.S. . ©2010 KPMG LLP. Steamship Entities—Income Taxes Disclosure 995-740-50-2. or otherwise marketed. For multiple-element arrangements that include deliverables within the scope of this Subtopic and deliverables that are not within the scope of this Subtopic. b. ASU 2009-14 amends ASC Subtopic 985-605 to exclude from its scope tangible products that contain both software and non-software components that function together to deliver a product’s essential functionality. A description of the types of temporary differences for which a deferred tax liability has not been recognized and the types of events that would cause those temporary differences to become taxable. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). Steamship Entities Subtopic 995-740: U. which is effective for fiscal years beginning after June 15. The amortization and write-down amounts may be combined with only the total of the two expenses being disclosed. Early adoption is permitted. Disclosure Pending Content Note: The content below is from ASU 2009-14. Paragraph 730-10-50-1 (in this checklist) requires that disclosure be made in the financial statements of the total research and development costs charged to expense in each period for which an income statement is presented and states that such disclosure shall include research and development costs incurred for a computer software product to be sold. The cumulative amount of each type of temporary difference. leased. 2010. All rights reserved.S. All of the following information shall be disclosed whenever a deferred tax liability is not recognized because of the exception to comprehensive recognition of deferred taxes for deposits in statutory reserve funds by U. a vendor shall provide the disclosures included in the pending content in paragraphs 605-25-50-1 through 50-2. a Delaware limited liability partnership and the U.Accounting Disclosure Checklist . SEC registrants should consider the requirement to disclose the impact of accounting standards that have been issued but not yet adopted under SAB 74. Paragraph 350-30-15-3 requires that an entity apply the disclosure requirements of paragraphs 350-30-50-1 through 50-3 (in this checklist) (relates to general intangible assets other than goodwill) to capitalized software costs. 985-605-50-1.S.

©2010 KPMG LLP. .Accounting Disclosure Checklist .S.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”). The amount of the deferred tax liability for temporary differences attributable to the statutory reserve funds of a U. All rights reserved. steamship entity that is not recognized in accordance with paragraph 995-740-25-2.Annual (12/10) Page 290 of 290 c. a Delaware limited liability partnership and the U. a Swiss entity.

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