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1. How NFPs should allocate joint costs  

BY Joseph W. Cruitt, CPA, CGMA
Not-for-profit entities (NFPs) are under constant pressure to devote an increasing portion of their expenditures to accomplishing their mission programs. While this goal sounds appealing, the NFP must also perform management activities to operate the NFP effectively and maintain sustainable fundraising efforts to support the organization.NFP ratings agencies use the percentage of expenses devoted to programming as a key component in the formulas they use to monitor, rate, and compare NFPs.

2. PCC approves private company GAAP exception for certain acquired intangible assets   WebExclusive

BY Ken Tysiac
The Private Company Council (PCC) voted Tuesday to approve a GAAP alternative that will allow private companies to elect not to separately recognize and measure certain intangible assets acquired in a business combination.Private companies that elect the alternative would not recognize:Noncompetition agreements.Customer-related intangible assets that are not capable of being sold or licensed independently from the other assets of a business.It is anticipated that customer-related intangible assets often would not meet one of the criteria for recognition.

3. Socially awkward   CPEDirect

BY Theresa F. Henry, CPA, Ph.D., David A. Rosenthal, Ph.D. and Rob R. Weitz, Ph.D.
In November 2013, SEC Chair Mary Jo White questioned whether investors could project a company’s future potential from “unique financial or operational metrics” that may not be an indicator of future profitability. These comments followed Twitter’s initial public offering (IPO), which raised $1.82 billion through the planned sale of 70 million shares at $26 per share.

4. FASB’s proposed 2015 GAAP taxonomy available for comment   WebExclusive

BY Ken Tysiac
FASB released its proposed 2015 GAAP Financial Reporting Taxonomy on Friday and asked for public review and comment.The taxonomy is a list of financial reporting labels that are machine-readable and coded in XBRL. Users of financial statements can use the tags to electronically search for and process data so they can be easily accessed and analyzed.Updates for accounting standards and other recommended improvements are included in the proposed taxonomy, which is expected to be finalized by the SEC in early 2015.

5. COSO transition getting a close look from auditors   WebExclusive

BY Ken Tysiac
The early stages of implementation are over for many companies using the updated internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In 2013, the framework—which had been in use since 1992—was updated to reflect changes in the business environment. U.S. public companies have been working to implement the new framework to fulfill their internal control over financial reporting requirements under the Sarbanes-Oxley Act (SOX).COSO will consider the 1992 framework to be superseded following a transition period that ends Dec.

6. FASB defines management’s going-concern responsibilities   WebExclusive

BY Ken Tysiac
FASB issued a new financial reporting standard Wednesday defining management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.The standard provides new guidance, as current GAAP does not describe management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or provide disclosures in the footnotes.Accounting Standards Update No.

7. Clarified, revised SSARS approved for reviews, compilations, and engagements to prepare financial statements   WebExclusive

BY Ken Tysiac
The AICPA Accounting and Review Services Committee (ARSC) voted during its meeting this month to approve clarified and revised standards for reviews, compilations, and engagements to prepare financial statements.The clarified and revised standards for compilations and engagements to prepare financial statements create a bright line between accounting (preparation) services and reporting (compilation) services.

8. FASB proposes simpler accounting for fees paid to cloud service providers   WebExclusive

BY Ken Tysiac
FASB on Tuesday issued a proposal designed to simplify the accounting for fees that public and private companies pay as customers in cloud-computing arrangements with third-party service providers.Rules exist under current GAAP addressing the accounting for cloud service providers. But there is no explicit accounting guidance under GAAP about how a customer should account for fees paid to the cloud service provider.This lack of guidance can lead to unnecessary cost and complexity during the evaluation of how to account for those fees, as well as diversity in practice.The proposed Accounting Standards Update, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic

9. SEC will scrutinize municipal advisers’ rules compliance   WebExclusive

BY Ken Tysiac
A new SEC examination initiative will scrutinize municipal advisers’ compliance with new rules and regulations that are under implementation.The SEC announced Tuesday that its Office of Compliance Inspections and Examinations (OCIE) will examine a significant percentage of municipal advisers for compliance.“The municipal adviser examination initiative will focus on the areas that are most important to protecting issuers, investors, and municipal taxpayers,” Kevin Goodman, national associate director of the OCIE’s broker-dealer examination program, said in a news release.The SEC also plans to promote compliance through outreach to municipal advisers.SEC rules that took effect July 1 generally require municipal

10. PCAOB requests comments on auditing accounting estimates and fair value measurements   WebExclusive

BY Ken Tysiac
The PCAOB is seeking input as it weighs possible standard-setting activities related to auditing accounting estimates and fair value measurements.In a staff consultation paper released Tuesday, the PCAOB Office of the Chief Auditor seeks comments on the potential need for changes to PCAOB standards—and a possible approach to a new auditing standard.“Accounting estimates and fair value measurements can be subjective and complex, yet they can be an important part of a company’s financial statements and critical to investors’ decision-making,” PCAOB Chairman James Doty said in a news release.
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