The Financial Accounting Standards Board and the International Accounting Standards Board published a memorandum of understanding that reaffirms their goal of jointly developing high-quality, common accounting standards to facilitate cross-border financial reporting by removing impediments such as the requirement that foreign issuers registered with the SEC reconcile their IFRS-based financial statements with U.S. GAAP ( ). The boards will work toward eliminating by 2008 any major differences in the accounting treatment of certain subjects, including the fair value option, borrowing costs, impairment, income tax, investment properties, government grants, research and development, joint ventures, subsequent events and segment reporting. They also will continue working together in other areas of accounting practice they agree require improvement. The SEC applauded the two organizations’ commitment to convergence and improved financial reporting ( ).

In its response to a June 2005 SEC study on off-balance-sheet arrangements ( ), FASB reported on its activities to improve outdated, overly complex accounting standards relating to leases, pensions and other postemployment benefits, consolidation policies, financial instruments, intangible assets and conceptual and disclosure frameworks ( ). The board’s response also identified several structural, institutional, cultural and behavioral factors—such as resistance to change and an emphasis on short-term earnings—that, it said, contribute to complexity and impede transparent financial reporting.

A FASB staff position, Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event, clarifies that in Statement no. 123 (revised 2004), Share-Based Payment, a certain cash settlement feature (referred to in paragraphs 32 and A229)—exercisable only upon the occurrence of a contingent event outside the control of an employee who receives an options grant as compensation—cannot be used until the event becomes probable ( ). If the event seems not probable, the statement alternatively permits classification of the option as equity in keeping with Accounting Principles Board Opinion no. 25, Accounting for Stock Issued to Employees.


Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.