The look ahead: US, UK manufacturing data could provide economic clues
Industrial production updates for many advanced economies come out this week. The data covers output of the manufacturing and mining sectors and of electric and gas utilities in the US and Europe and includes indicators for how the economies are performing.
On Tuesday, the UK Office for National Statistics releases its industrial production data for April. Eurostat follows on June 13th with April data for the euro zone. On June 15th, the Federal Reserve releases May data for the US.
The data provide clues whether the double-dip recession in the UK could extend to the second quarter, how likely it is for the euro zone to follow the UK into a second recessionary dip and how bad a sign the weakening labour market is for the US economy.
In Europe, only Germany, Slovenia and Slovakia reported increases in industrial production in March. Greece, Spain and Italy saw hefty declines. In the UK, manufacturing output was up in March, but warm weather affected utilities and the mining sector, weakening March’s overall industrial output.
In the US, industrial production picked up more steam than expected in April.
Global manufacturing executives, particularly those in the US, have been cautiously optimistic about the business outlook for the next two years, a recent KPMG report shows.
FASB and IASB could vote on leases
The US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are expected to vote on a plan for lessee accounting when they meet in London to discuss their ongoing joint convergence projects.
Models known as “Approach A” and “Approach D” remain under consideration by the boards, which could vote to allow some combination of those approaches. Each involves recognising the lease liability on the balance sheet, except for leases of less than 12 months.
In Approach A, the right-of-use (ROU) asset is accounted for as a non-financial asset and measured at cost, less accumulated amortisation. The combination of the amortisation charge on the ROU asset and the interest expense on the lease liability results in a total lease expense that would generally decrease over the lease term.
Approach D would require the lessee to allocate the total lease payments evenly over the lease term, resulting in straight-line total lease expense. In this approach, the ROU asset and the lease liability are considered one unit of account when initially and subsequently measuring those balances.
During a meeting in May, both boards’ members seemed split on the importance of having just one approach as opposed to a combination of approaches A and D.
The boards are scheduled to meet jointly June 12th–14th in London. It’s not clear when the vote will take place on the lessee accounting model, but leases are on the agenda for June 13th and 14th. A webcast is available on the IASB’s site.
The boards also are expected to discuss insurance contracts, investment entities and classification and measurement in the accounting for financial instruments project.
The initial ED in the leases project was published in August 2010; a re-exposure of the standard is expected in the second half of this year.
GASB M&A comment deadline approaches
The deadline for comments on an exposure draft issued by the US Governmental Accounting Standards Board (GASB) on government combinations and disposals of government operations is June 15.
Issued in March, the proposed statement would require US state and local governments to:
- Classify government combinations as mergers, acquisitions or transfers of operations.
- Use carrying values to determine the assets and liabilities combined in a merger or operations transfer.
- Measure acquired assets and liabilities based on their acquisition values
Instructions on the process for commenting are included in the ED.
International Business Conference
Executives, accountants and attorneys will address challenges of an unpredictable global economy at the AICPA’s two-day International Business Conference, which starts Monday in Washington, D.C.
The workshops, “how-to” sessions and expert panel discussions will focus on access to international markets, doing business in Europe and Asia, and international reporting requirements. The conference aims to foster strategic thinking, provide insight and offer practical solutions to issues that arise from doing business internationally.
Several hundred CPAs from around the world will descend on Las Vegas to take part in a three-day, three-conference event starting Monday at the Aria Resort & Casino.
For the first time, the AICPA’s Practitioners Symposium and TECH+ programmes will be held in conjunction with the Association for Accounting Marketing Summit. More than 100 sessions will offer attendees myriad opportunities to learn how to better manage their accounting firms, make the most of technology and more effectively market their business.
Hot topics on the agenda include mobile and cloud technologies, cybersecurity, pricing strategies, partner accountability and business development ideas.
—From CGMA Magazine staff reports.