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    General General Document Transcript

    • GENERAL U.S. GAAP INTERIM FINANCIAL STATEMENT DISCLOSURES CHECKLIST ENTITY NAME: DATE OF FINANCIAL STATEMENTS: Prepared by Date Reviewed by Date INSTRUCTIONS This checklist is intended to be used as a guide for determining whether the interim financial statements of for-profit type entities include the primary disclosures as required by U.S. generally accepted accounting principles (GAAP). Paragraph 2 of Accounting Principles Board (APB) Opinion No. 28, Interim Financial Reporting, indicates that interim financial information “may be issued on a monthly or quarterly basis or at other intervals and may take the form of either complete financial statements or summarized financial data.” It should be noted that this checklist does not address the specialized disclosure requirements of specialized industries, not-for-profit organizations, the Securities and Exchange Commission (SEC), or the Governmental Accounting Standards Board (GASB). Most of the questions addressed in this checklist refer to specific authoritative literature and use the following acronyms: • FAS—Financial Accounting Standards Board Statement of Financial Accounting Standards • FIN—Financial Accounting Standards Board Interpretation • FSP—Financial Accounting Standards Board Staff Position • APB—Accounting Principles Board Opinion • EITF—Consensus Position of the FASB Emerging Issues Task Force
    • Some of the questions included in the checklist do not refer to any specific authoritative literature. Nevertheless, the disclosure items they address are considered informative disclosures for users of the financial statements. This checklist is divided into topics that are detailed on the “Table of Contents.” Please review the topics for applicability. For each topic that is applicable, check the “Item Present” column; otherwise, check the “Item Not Present” column. For each topic checked “Item Present,” complete the individual checklist items by placing a checkmark in the appropriate “Yes,” “No,” or “N/A” (not applicable) column. Any item marked “No” should be explained in the checklist or in a separate memorandum. It is not necessary to complete the individual checklist items for topics checked “Item Not Present.” This Interim Financial Statement Disclosures Checklist has been updated through September 30, 2006, which includes incorporating the disclosure requirements of FAS-157, Fair Value Measurements, and FAS-158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. 2
    • TABLE OF CONTENTS Item Item Not Present Present General Accounting Changes and Error Corrections Fair Value Measurements Guarantees Income Statement Classification Pension and Postretirement Benefit Plans Public Companies 3
    • Yes No N/ A Note: Have disclosure requirements pertaining to specific types of transactions or actions that have occurred during the interim period (e.g., impairment determinations, investment in a variable interest entity, securitizations, and restructuring activities) been considered? (See the General U.S. GAAP Financial Statement Disclosures Checklist for these requirements.) Note: If a complete set of financial statements (i.e., not condensed) and accompanying note disclosures have been provided, has the General U.S. GAAP Financial Statement Disclosures Checklist been used in addition to this checklist? Note: Have disclosure requirements that encompass all periods presented (e.g., earnings per share) been considered? (See the General U.S. GAAP Financial Statement Disclosures Checklist for these requirements.) Note: Have the annual disclosure requirements in a new accounting pronouncement been considered if the new pronouncement is adopted in an interim period? (See the General U.S. GAAP Financial Statement Disclosures Checklist for the disclosure requirements of new accounting pronouncements.) Note: Have industry-specific disclosure requirements (e.g., those pertaining to the oil and gas industry) been considered? GENERAL 1. If the company uses estimated gross profit rates to determine the cost of goods sold during interim periods or uses other methods different from those used at annual inventory dates, have the following disclosures been made: (APB-28, par. 14) a. The method used at the interim date? b. Any significant adjustments that result from reconciliations with the annual physical inventory? 4
    • Yes No N/ A 2. When costs and expenses incurred in an interim period cannot be readily identified with the activities or benefits of other interim periods, have disclosures been made about the nature and amount of such costs? (Note: Disclosure is not required if items of a comparable nature are included in both the current interim period and the corresponding interim period of the preceding year.) (APB-28, par. 15) 3. If revenues of the entity are subject to material seasonal variations, have the following disclosures been made to avoid the possibility that interim results may be taken as fairly indicative of the estimated results for a full fiscal year: (APB-28, par. 18) a. The seasonal nature of the business activities? b. Information for 12-month periods ended at the interim date for the current and preceding years (optional)? 4. Have disclosures been made of the reasons for significant variations in the customary relationship between income tax expense and pretax accounting income, if they are not otherwise apparent from the financial statements or from the nature of the entity’s business? (APB-28, par. 19; FIN-18, par. 25) 5. Are extraordinary items, gains or losses from the disposal of a component of an entity, unusual seasonal results, business combinations, unusual and infrequently occurring transactions, and events that are material to the operating results of the interim period reported separately and included in the determination of net income for the interim period in which they occur? (Note: See item 3 in the “Public Companies” section for disclosures required for public companies with material business combinations.) (APB-28, par. 21) 6. Have disclosures been made about contingencies and other uncertainties that could be expected to affect the fairness of presentation of the interim financial information? (Note: Such disclosures should: (a) include, but not be limited to, those matters that form the basis of a qualification of an independent auditors’ report and (b) be repeated in interim reports until the contingencies have been removed or resolved or have become immaterial.) (APB-28, par. 22) 5
    • Yes No N/ A 7. Have the number of shares issued on conversion, exercise, or otherwise during at least the most recent annual fiscal period and any subsequent interim period presented been disclosed? (FAS-129, par. 5) 8. Has total comprehensive income been disclosed in condensed financial statements? (FAS-130, par. 27) 9. If there is a significant difference between total comprehensive income and net income, has disclosure of the components of the difference been considered? (FAS-130, par. 125) 10. Have unusual or infrequently occurring items that will be separately disclosed in the financial statements for the fiscal year been separately disclosed as a component of pretax income from continuing operations? (FIN-18, par. 17) 11. Have accounting policies relevant only to interim reporting been disclosed (e.g., off-season costs)? ACCOUNTING CHANGES AND ERROR CORRECTIONS Note: The disclosure requirements in items 1 through 11 below are required for entities that have not adopted FAS-154, Accounting Changes and Error Corrections. The disclosure requirements in items 6 through 20 below are required for entities that have adopted FAS-154, which is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Early adoption is permitted for accounting changes and corrections of errors made in fiscal years beginning after June 1, 2005. 1. For changes in accounting principles or reporting entity that result in retroactive restatement of previously issued financial statements have the following been disclosed for all periods presented, if not presented on the income statement: (APB-28, par. 25; APB-20, pars. 28 and 35) a. Nature and justification? b. Effect on income before extraordinary items and net income (and related per share amounts, if applicable)? 6
    • Yes No N/ A 2. For corrections of errors that result in the retroactive restatement of previously issued financial statements, have the following been disclosed in the period in which the error was discovered and corrected: (APB-28, par. 25; APB-20, par. 37) a. Nature? b. Effect on income before extraordinary items and net income (and related per share amounts, if applicable)? 3. Has the effect of a change in accounting estimate, including a change in the estimated effective annual tax rate, on income before extraordinary items, and net income (and related per share amounts, if applicable) been disclosed if material in relation to any period presented? (Note: Disclosure of the effect on income statement amounts is not necessary for estimates made each period in the ordinary course of accounting for certain items [e.g., uncollectible accounts or inventory obsolescence]. However, if the effects are material, then disclosure of the income statement amounts is recommended but not required.)(Note: The effect on earnings of a change in estimate that is made in the current interim period should be reported in the current and subsequent interim periods, if material to any period presented. It should continue to be reported in the interim financial information of the subsequent year for as many periods as necessary to avoid misleading comparisons.) (APB-28, par. 26; APB-20, par. 33) 4. Have the following disclosures about a cumulative effect-type accounting change, other than changes to last-in, first-out (LIFO), been made in interim financial reports: (FAS-3, par. 11, APB-28, par. 27B) a. In financial reports for the interim period in which the new accounting principle is adopted, have disclosures been made of: (1) The nature of and justification for the change? 7
    • Yes No N/ A (2) The effect of the change on income from continuing operations and net income (and related per share amounts, if applicable) for the interim period in which the change is made? (Note: If the change is made in a period other than the first interim period of a fiscal year, the effect of the change on income from continuing operations and net income [and related per share amounts, if applicable] for each pre-change interim period of the fiscal year should be disclosed. Also, the restated income from continuing operations, and net income [and related per share amounts, if applicable] for each pre-change interim period of the fiscal year should be disclosed.) (3) Income from continuing operations and net income (and related per share amounts, if applicable) computed on a pro forma basis for: (i) the interim period in which the change is made and (ii) any interim periods of prior fiscal years for which financial information is being presented? (Note: If no financial information for interim periods of prior fiscal years is being presented, disclosure shall be made, in the period of change, of the actual and pro forma amounts of income from continuing operations, and net income (and related per share amounts, if applicable) for the interim period of the immediately preceding fiscal year that corresponds to the interim period in which the changes are made.) b. In year-to-date and last-12-months-to-date financial reports that include the interim period in which the new accounting principle is adopted, have disclosures been made of: (1) The effect of the change on income from continuing operations and net income (and related per share amounts, if applicable) for the interim period in which the change is made? 8
    • Yes No N/ A (2) Income from continuing operations and net income (and related per share amounts, if applicable) computed on a pro forma basis for: (i) the interim period in which the change is made and (ii) any interim periods of prior fiscal years for which financial information is being presented? (Note: If no financial information for interim periods of prior fiscal years is being presented, disclosure should be made, in the period of change, of the actual and pro forma amounts of income from continuing operations, and net income (and related per share amounts, if applicable) for the interim period of the immediately preceding fiscal year that corresponds to the interim period in which the changes are made.) c. In financial reports for subsequent (postchange) interim periods of the fiscal year in which the new accounting principle is adopted, have disclosures been made of the effect of the change on income from continuing operations and net income (and related per share amounts, if applicable) for that postchange interim period? 5. For changes in accounting principles when neither the cumulative effect of the change nor the pro forma amounts can be computed (principally a change to the LIFO method of inventory pricing), have the following disclosures been made: (Note: If a change of this type has been made in the first or any other interim period of an entity’s fiscal year, the disclosures in item 4 above [except the pro forma amounts for interim periods of prior fiscal years included in item 4(a)(3) above] should be made.) (FAS-3, pars. 12-13; APB-28, pars. 27C-27D) a. An explanation of the reasons for omitting accounting for the cumulative effect of the change? b. An explanation of the reasons for omitting disclosure of pro forma amounts for prior years? 6. Have disclosures been made of any changes in accounting principles or practices from those applied in: (APB-28, par. 23) 9
    • Yes No N/ A a. The comparable interim period of the prior year? b. The preceding interim periods in the current year? c. The prior annual financial statements? 7. Have the cumulative effects of an accounting change or correction of an error that are material to an interim period, but not material to the estimated income for the full fiscal year or to the trend of earnings, been disclosed separately in the interim period? (Note: The related amount of applicable income taxes may be disclosed but is not required.) (APB-28, par. 29; FIN-18, par. 71) 8. Have the following disclosures been made in interim financial statements about an adjustment related to prior interim periods of the current fiscal year: (FAS-16, par. 15) a. The effect on income from continuing operations and net income (and related per share amounts, if applicable) for each prior interim period of the current fiscal year? b. Restated income from continuing operations and net income (and related per share amounts, if applicable) for each prior interim period? 9. Have the resulting effects (both gross and net of applicable income tax) of prior period adjustments on the net income of prior periods been disclosed in the interim report for the period in which the adjustments are made? (APB-9, par. 26; FAS-154, par. 26) 10. When single-period financial statements are presented, has the effect (both gross and net of applicable income tax) of prior period adjustments on the opening balance of retained earnings and on net income (and on related per share amounts when presented) of the preceding period been disclosed? (APB-9, par. 26; FAS-154, par. 26) 10
    • Yes No N/ A 11. When financial statements for more than one period are presented, has the effect (both gross and net of applicable income tax) of prior period adjustments on the opening balance of retained earnings and on net income (and on related per share amounts when presented) for each of the periods presented been disclosed? (APB-9, par. 26; FAS-154, par. 26) 12. Are the following disclosures made for a change in accounting principle in the interim period the change occurs: (FAS-154, par. 17) a. The nature of and reason for the change in accounting principle, including an explanation of why the newly adopted accounting principle is preferable? b. The method of applying the change? c. A description of the prior-period information that has been retrospectively adjusted? d. The effect of the change on the following for the current period and any prior periods retrospectively adjusted: (1) Income from continuing operations? (2) Net income (or other appropriate captions of changes in the applicable net assets or performance indicator)? (3) Any other affected financial statement line item? (4) Any affected per-share amounts, if applicable? e. The cumulative effect of the change on retained earnings or other components of equity or net assets in the balance sheet as of the beginning of the earliest period presented? f. If retrospective application to all prior periods is impracticable, the reasons why, and a description of the alternative method used to report the change? 11
    • Yes No N/ A g. If indirect effects of the change in accounting principle are recognized: (1) A description of the indirect effects of the change in accounting principle, including the amounts that have been recognized in the current period, and the related per-share amounts, if applicable? (2) Unless impracticable, the amount of the total recognized indirect effects of the accounting change and the related per-share amounts, if applicable, that are attributable to each prior period presented? 13. For a change in accounting principle that has no material effect in the period of change but is reasonably certain to have a material effect in later periods, have disclosures been made of the nature of and reason for the change in accounting principle, including an explanation of why the newly adopted accounting principle is preferable, whenever the financial statements of the period of change are presented? (FAS-154, par. 17) 14. In the fiscal year in which a new accounting principle is adopted, for financial information reported in interim periods after the date of adoption of a new accounting principle, has the effect of the change on the following been disclosed for the post-change interim periods: (FAS-154, par. 18) a. Income from continuing operations? b. Net income (or other appropriate captions of changes in the applicable net assets or performance indicators)? c. Related per-share amounts, if applicable? 15. If a change in accounting principle effects a change in estimate, have the disclosures detailed in items 12 through 14 above been made? (FAS-154, par. 22; APB-28, par. 26) 12
    • Yes No N/ A 16. For a change in accounting estimate that affects several future periods (e.g., change in service lives of depreciable assets), has the effect of the change on the following for the current period been disclosed: (Note: Disclosure of these effects is not necessary for estimates made each period in the ordinary course of accounting [e.g., uncollectible accounts, inventory obsolescence] unless the effect of the change in estimate is material.) (FAS-154, par. 22; APB-28, par. 26) a. Income from continuing operations? b. Net income (or other appropriate captions of change in the applicable net assets or performance indicators)? c. Related per-share amounts, if applicable? 17. For a change in accounting estimate that has no material effect in the period of change but is reasonably certain to have a material effect in later periods, has a description of the change been disclosed whenever the financial statements of the period of change are presented? (FAS-154, par. 22; APB-28, par. 26) 18. For changes in the reporting entity, have the following been disclosed in the period of the change: (FAS-154, par. 24) a. Nature and reason for it? b. Effect on income before extraordinary items, net income (or other appropriate captions of changes in the applicable net assets or performance indicator), and other comprehensive income (and related per share amounts, if applicable)? 19. For a change in reporting entity that has no material effect in the period of change but is reasonably certain to have a material effect in later periods, have disclosures been made of the nature of and reason for the change, whenever the financial statements of the period of change are presented? (FAS-154, par. 24) 20. If the financial statements have been restated to correct an error have the following been disclosed? (FAS-154, par. 26) 13
    • Yes No N/ A a. The fact that previously issued financial statements have been restated? b. A description of the nature of the error? c. The effect of the correction on each financial statement line item and any per-share amounts, if applicable, affected for each prior period presented? d. The cumulative effect of the change on retained earnings or other appropriate components of equity or net assets in the balance sheet, as of the beginning of the earliest period presented? FAIR VALUE MEASUREMENTS Note: The disclosure requirements in items 1 and 2 below are prescribed by FAS-157, Fair Value Measurements. FAS-157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Early adoption is permitted so long as financial statements for any period (interim or annual) of the fiscal year have not yet been issued. The disclosure requirements of FAS-157 need not be applied for financial statements for periods presented prior to the initial application. The quantitative disclosures required in items 1 and 2 below should be presented in a tabular format (FAS-157, par. 34). In addition, the entity is encouraged, but not required, to combine the fair value information disclosed in accordance with items 1 and 2 with the fair value information disclosed in accordance with other items in this checklist. The entity is also encouraged, but not required, to disclose information about other similar measurements (for example, inventories measured at market value under ARB-43), if practicable. (FAS-157, par. 35) 1. For assets and liabilities that are measured at fair value on a recurring basis subsequent to initial recognition, have the following disclosures been made for each major category of assets and liabilities for each interim period: (FAS-157, par. 32) a. The fair value measurements at the reporting date? 14
    • Yes No N/ A b. 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), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3)? c. For fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) Total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), 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)? (2) Purchases, sales, issuances, and settlements (net)? (3) Transfers in and (or) out of Level 3 (for example, transfers due to changes in the observability of significant inputs)? (Note: This reconciliation disclosure may be presented net for derivative assets and liabilities.) d. The amount of the total gains or losses for the period in (c) (1) above 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)? e. In the first interim period in the fiscal year in which FAS-157 is initially applied, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period? 15
    • Yes No N/ A 2. For assets and liabilities that are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition, have the following disclosures been made for each major category of assets and liabilities for each interim period: (FAS-157, par. 33) a. The fair value measurements recorded during the period and the reasons for the measurements? b. 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), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3)? c. For fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs? d. In the first interim period in the fiscal year in which FAS-157 is initially applied, the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and (or) liabilities in prior periods? GUARANTEES 1. Is the following information disclosed for each guarantee, or each group of similar guarantees, even if the likelihood of the entity having to make any payments under the guarantee is remote: (FIN-45, pars. 13–14) a. The nature of the guarantee? b. The approximate term of the guarantee? c. How the guarantee arose? d. The events or circumstances that would require the entity to perform under the guarantee? 16
    • Yes No N/ A e. The maximum potential amount of future payments, undiscounted, the entity could be required to make under the guarantee? (Note: This disclosure is not required for product warranties.) With respect to this disclosure item: (1) If the maximum potential future payments under the guarantee are unlimited, has that fact been disclosed? (2) If the entity is unable to develop an estimate of the maximum potential amount of future payments, has the entity disclosed the reasons why it cannot estimate the maximum potential amount? f. The current carrying amount of the related liability, if any? g. The nature of any recourse provisions that would enable the entity to recover from third parties any of the amounts paid under the guarantee? h. The nature of any assets held either as collateral or by third parties that, on the occurrence of any triggering event or condition under the guarantee, the entity can obtain and liquidate to recover the amounts paid under the guarantee? (Also, if estimable, the entity should indicate the extent to which the proceeds from the liquidation of those assets would be expected to cover the maximum potential amount of future payments under the guarantee.) i. For product warranties or for guarantees related to the functional performance of nonfinancial assets owned by the guaranteed party, have the following additional items been disclosed: (1) The entity’s (guarantor’s) accounting policy and methodology used in determining its liability for such product warranties or guarantees, including any liability (such as deferred revenue) associated with extended warranties? 17
    • Yes No N/ A (2) A reconciliation of the changes in the entity’s aggregate liability for such product warranties or guarantees, showing the following: (i) The beginning balance of the aggregate liability? (ii) Aggregate reductions in that liability for payments made (in cash or in kind)? (iii) Aggregate changes in the liability for accruals related to such product warranties or guarantees issued during the period? (iv) The aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates)? (v) The ending balance of the aggregate liability? Note: The disclosure requirements in item 2 below are prescribed by FSP FIN 45-3, “Application of FASB Interpretation No. 45 to Minimum Revenue Guarantees Granted to a Business or Its Owners”, which is effective for all minimum revenue guarantees in financial statements of interim periods ending after the beginning of the first fiscal quarter following November 10, 2005. Early application is permitted. 2. Have the disclosure requirements detailed in item 1 above been made for all minimum revenue guarantees, regardless of whether they were recognized and measured under FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others? (FSP FIN 45-3, par. 7) INCOME STATEMENT CLASSIFICATION 18
    • Yes No N/ A Note: The disclosure requirement in item 1 below is prescribed by EITF 06-3, “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross Versus Net Presentation).” EITF 06-3 is effective in interim and annual periods beginning after December 15, 2006. 1. For taxes that fall within the scope of EITF 06-3 (e.g., sales tax), if those taxes are reported on a gross basis and are significant, have the amounts of those taxes included in interim financial statements been disclosed for each period for which an income statement is presented? (Note: This disclosure may be provided on an aggregate basis.) (EITF 06-3) PENSION AND POSTRETIREMENT BENEFIT PLANS 1. For defined benefit pension plans and other defined benefit postretirement plans of nonpublic entities, have disclosures been made of the total amount of the employer’s contributions paid, and expected to be paid, during the current fiscal year, if significantly different from amounts previously disclosed? (Note: Estimated contributions may be presented in the aggregate for contributions required by funding regulations or laws, discretionary contributions, and noncash contributions.) (Note: This disclosure requirement applies only to nonpublic entities; see the “Public Companies” section for disclosures that are applicable to publicly held companies.) (FAS-132R, par. 10) Note: Except for certain nonpublic entities, the disclosure requirements in items 2b-e below are effective for the first interim or annual periods beginning after June 15, 2004. For nonpublic entities that sponsor one or more defined benefit postretirement health care plans that provide prescription drug coverage but of which no plan has more than 100 participants, the disclosure requirements in 2b-e below are effective for fiscal years beginning after December 15, 2004. Early adoption is encouraged but not required. Prior to applying the accounting guidance in FSP FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” the disclosure requirements in 2a below should be provided. 19
    • Yes No N/ A 2. For employers that sponsor single-employer defined benefit postretirement health care plans that provide prescription drug coverage, have the following been disclosed: (FSP FAS 106-2, pars. 20–22) a. For periods in which the employer has not yet been able to determine the actuarial equivalency to Medicare Part D under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act): (1) The existence of the Act? (2) A statement clarifying that measures of the accumulated postretirement benefit obligation (APBO) or net periodic postretirement benefit cost do not reflect any amount associated with the federal subsidy provided by the Act because the employer is unable to conclude whether the benefits provided by the plan are actuarially equivalent to Medicare Part D under the Act? b. For financial statements for the first period in which the employer includes the effects of the federal subsidy provided by the Act in measuring the APBO and net periodic postretirement benefit cost: (1) The reduction in the APBO for the subsidy related to benefits attributed to past service? (2) The effect of the subsidy on the measurement of net periodic postretirement benefit cost for the current period, including: (i) Any amortization of the actuarial experience gain in item (1) above as a component of the net amortization called for by paragraph 59 of FAS-106, Employers’ Accounting for Postretirement Benefits Other Than Pensions? 20
    • Yes No N/ A (ii) The reduction in current period service cost and interest cost on the APBO due to the subsidy? c. An explanation of any significant change in the benefit obligation or plan assets not otherwise apparent in the above disclosures? d. Gross benefit payments (paid and expected), including prescription drug benefits? e. Gross amount of the subsidy receipts (received and expected)? PUBLIC COMPANIES 1. For publicly traded companies that report summarized financial information to their security holders at interim dates (including reports on fourth quarters), have the following items, at a minimum, been reported: (Note: When summarized financial data are regularly reported on a quarterly basis, the information with respect to the current quarter and the current year-to-date or the last twelve months to date should be provided with comparable data for the preceding year.) (APB-28, pars. 30 and 32; FAS-131, par. 33) a. Sales or gross revenues? b. Provision for income taxes? c. Extraordinary items (including related income tax effects)? d. Cumulative effect of a change in accounting principles or practices? e. Net income? f. Comprehensive income? g. Basic and diluted earnings per share data for each period presented? 21
    • Yes No N/ A h. Seasonal revenue, costs, or expenses? i. Significant changes in estimates or provisions for income taxes? j. Disposal of a segment of a business and extraordinary, unusual or infrequently occurring items? k. Contingent items? l. Changes in accounting principles or estimates? m. Significant changes in financial position? n. The following information about reportable operating segments (including provisions related to the restatement of segment information in previously issued financial statements): (1) Revenues from external customers? (2) Intersegment revenues? (3) A measure of segment profit or loss? (4) Total assets for which there has been a material change from the amount disclosed in the last annual report? (5) A description of differences from the last annual report in the basis of segmentation or in the measurement of segment profit or loss? 22
    • Yes No N/ A (6) A reconciliation of the total of the reportable segments’ measures of profit or loss to the entity’s consolidated income before income taxes, extraordinary items, discontinued operations, and the cumulative effect of changes in accounting principles? (However, if, for example, an entity allocates items such as income taxes and extraordinary items to segments, the entity may choose to reconcile the total of the segments’ measures of profit or loss to consolidated income after those items. Significant reconciling items shall be separately identified and described in that reconciliation.) o. If awards of stock-based employee compensation were outstanding and accounted for under the APB-25, Accounting for Stock Issued to Employees, intrinsic value method for any period for which an income statement is presented, is the following information in tabular format for all periods presented: (1) Reported net income, and basic and diluted earnings per share? (2) Stock-based employee compensation cost, net of related tax effects, included in net income as reported? (3) Stock-based employee compensation cost, net of related tax effects, that would have been included in determining net income if the fair- value method had been applied to all awards granted, modified, or settled in fiscal periods beginning after December 15, 1994? (4) Pro forma net income assuming that the fair- value method had been applied to all awards granted, modified, or settled in fiscal periods beginning after December 15, 1994? 23
    • Yes No N/ A (5) Pro forma basic and diluted earnings per share assuming that the fair-value method had been applied to all awards granted, modified, or settled in fiscal periods beginning after December 15, 1994? p. The effects of significant events on the interim financial results? (Note: Entities are encouraged, but not required, to disclose this information.) 2. If condensed interim balance sheet information or cash flow data is not presented, have significant changes since the last reporting period with respect to liquid assets, net working capital, long-term liabilities, or stockholder’s equity been disclosed? (APB-28, par. 33) 3. Are the following disclosures made in the interim financial information if a material business combination is completed during the interim period: (FAS-141, par. 58) a. The name and a brief description of the acquired entity? b. The percentage of voting equity interests acquired? c. The primary reasons for the acquisition, including a description of the factors that contributed to a purchase price that result in recognition of goodwill? d. The period for which the results of operations of the acquired entity are included in the combined entity’s income statement? e. The cost of the acquired entity and, if applicable, the number of shares of equity interests (e.g., common shares) issued or issuable, the value assigned to those interests, and the basis for determining that value? 24
    • Yes No N/ A f. Supplemental pro forma information that discloses the results of operations for the current interim period and the current year up to the date of the most recent interim balance sheet presented (and for the corresponding periods in the preceding year) as though the business combination had been completed as of the beginning of the period being reported on? (Note: That pro forma information should disclose, at a minimum: revenue; income before extraordinary items and the cumulative effect of accounting changes; net income; and earnings per share.) g. The nature and amount of any material, nonrecurring items included in the reported pro forma results of operations? 4. If an entity changes the structure of its internal organization in a manner that causes the composition of its reportable segments to change, has the corresponding information for earlier periods, including interim periods, been restated, unless it is impracticable to do so? (Note: The entity should also disclose whether it has restated the segment information for earlier periods. If the segment information for earlier interim periods is not restated to reflect the change, the entity should 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.) (FAS-131, pars. 34–35) 25
    • Yes No N/ A Note: In September 2006, the FASB issued Statement of Financial Accounting Standards (FAS) No. 158 entitled Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. This standard amends FAS-87, Employers’ Accounting for Pensions; FAS-88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits; FAS-106, Employers’ Accounting for Postretirement Benefits Other Than Pensions; and FAS-132 (Revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefits. For an employer with publicly traded equity securities, FAS-158 is effective for financial statements with fiscal years ending after December 15, 2006. See item 5 below for the disclosure requirements about defined benefit pension plans and other defined benefit postretirement plans prior to the adoption of FAS-158 and item 6 below for the disclosure requirements after the adoption of FAS-158. 5. Are the following disclosures made about defined benefit pension plans and other defined benefit postretirement plans: (FAS-132R, par. 9; APB-28, par. 30k) a. For each income statement presented, the amount of net periodic benefit cost recognized, showing separately the following: (1) service cost component, (2) interest cost component, (3) expected return on plan assets for the period, (4) amortization of the unrecognized transition obligation or asset, (5) amount of recognized gains or losses, (6) amount of prior service cost recognized, and (7) amount of gain or loss recognized due to a settlement or curtailment? b. The total amount of the employer’s contributions paid, and expected to be paid, during the current fiscal year, if significantly different from amounts previously disclosed? (Note: Estimated contributions may be presented in the aggregate for contributions required by funding regulations or laws, discretionary contributions, and noncash contributions.) 26
    • Yes No N/ A 6. Are the following disclosures made about defined benefit pension plans and other defined benefit postretirement plans: (APB-28, par. 30k; FAS-132R, par. 9; FAS-158, pars. E1s and F3) a. For each income statement presented, the amount of net periodic benefit cost recognized, showing separately the following: (1) service cost component, (2) interest cost component, (3) expected return on plan assets for the period, (4) gain or loss component, (5) prior service cost or credit component, (6) transition asset or obligation component, and (7) gain or loss recognized due to a settlement or curtailment? b. The total amount of the employer’s contributions paid, and expected to be paid, during the current fiscal year, if significantly different from amounts previously disclosed? (Estimated contributions may be presented in the aggregate for contributions required by funding regulations or laws, discretionary contributions, and noncash contributions.) 27