There may be some false comfort in the faraway implementation date of the proposed, converged financial reporting standard FASB and the International Accounting Standards Board (IASB) are in the final stages of developing. The standard, scheduled to be released in the first quarter of 2014, would take effect for reporting
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New guide helps navigate goodwill impairment testing challenges
Goodwill impairment testing has been a challenging area for many financial statement preparers since the issuance in 2001 of FASB Accounting Standards Codification (ASC) Subtopic 350-20 (formerly FASB Statement No. 142). A FASB Accounting Standards Update issued in September 2011 was designed to make this topic easier for preparers. The
Permanent injunction closes large tax preparation firm
A federal district court in Ohio has issued a permanent injunction ordering ITS Financial LLC, the parent company of Instant Tax Service tax franchiser, to cease operations (ITS Financial LLC, No. 3:12-cv-95 (S.D. Ohio 11/6/13). The order, which was issued as a result of a two-week trial in June, also
FASB proposes eliminating “development stage entity” distinction
A new FASB proposal seeks to eliminate the designation of “development stage entity,” as well as related disclosure requirements, from U.S. GAAP. FASB on Thursday issued a Proposed Accounting Standards Update (ASU) that originated with the Private Company Council (PCC) and was expanded in scope to include public and private
Affordable Care Act holds opportunities, challenges for internal auditors
Health care regulations associated with the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, have created new opportunities for internal auditors. But internal auditors may need to get more familiar with PPACA’s provisions to help their organizations understand the risks associated with the law and their organization’s preparedness to
PCAOB establishing Center for Economic Analysis
The PCAOB is establishing a Center for Economic Analysis to advise the board on how economic theory, analysis, and tools can enhance the effectiveness of the board’s programs. University of Chicago economist Luigi Zingales will be the founding director of the center, which will promote and encourage economic research related
IRS extends fast-track settlement to smaller businesses nationwide
Formerly available only to large and midsize businesses and in a geographically limited pilot program for smaller entities, the IRS’s Fast Track Settlement program is now available to smaller businesses nationwide, the IRS announced Wednesday. Fast-track settlement allows the IRS and business or self-employed taxpayers under examination to use alternative
Historic revenue recognition standard takes big step forward
A financial reporting standard designed to increase global comparability of one of the most important items in financial statements is nearing completion after an important vote Wednesday. FASB directed the board’s staff to draft a final revenue recognition standard to be submitted to the board in December for final approval.
SEC’s ramped-up scrutiny means CFOs need to reevaluate processes
CFOs and finance departments may want to undergo a careful evaluation of their financial reporting systems and processes, experts say, now that the SEC is ramping up its scrutiny of accounting and auditing. After years of declining enforcement actions for financial fraud and issuer disclosure, the SEC’s Division of Enforcement
Health FSA use-it-or-lose-it rule modified to allow a $500 carryover
On Thursday, the IRS issued Notice 2013-71, which permits companies to amend their Sec. 125 cafeteria plans to allow participants in health flexible spending arrangements (FSAs) who do not use all of the money in a plan year to use up to $500 in the next plan year, in addition
PTIN renewal system reopens
On Thursday, two weeks after the end of the government shutdown, the IRS reopened its registration system for renewing preparer tax identification numbers (PTINs) for the 2014 filing season. When the IRS reopened on Oct. 17, it announced that while the PTIN registration system was available for new PTIN registrations,
IRS releases inflation adjustments for 2014
On Thursday, the IRS issued the annual inflation adjustments for 2014 for more than 40 tax provisions and the tax tables for 2014 (Rev. Proc. 2013-35). Among the inflation-adjusted amounts that have increased are the personal exemption, which increased from $3,900 in 2013 to $3,950 for 2014, and the standard
Collectibility threshold added in significant change to rev rec proposal
FASB and the International Accounting Standards Board (IASB) made a significant change in a major project Wednesday by adding a collectibility threshold to the converged financial reporting standard they are developing for revenue recognition. In what’s scheduled to be their last joint meeting on a project that will significantly affect
Social Security wage base rises to $117,000 for 2014
On Wednesday, the Social Security Administration (SSA) announced that the wage base above which taxes for old age, survivors, and disability insurance (OASDI) are not due will increase from $113,700 to $117,000 in 2014. The new rate means employees will pay a maximum of $7,254 of OASDI in 2014, with
Guidance issued for FFIs with FATCA agreements
On Tuesday, the IRS issued its latest guidance in preparation for the implementation of the Foreign Account Tax Compliance Act (FATCA) reporting and withholding requirements (Notice 2013-69). The guidance applies to foreign financial institutions (FFIs) entering into an FFI agreement with the IRS under Sec. 1471 or to FFIs or
Ineffective income and withholding verification hinder IRS in detecting fraudulent returns
On Monday, the Treasury Inspector General for Tax Administration (TIGTA) released the results of its review of the IRS’s fraudulent tax return detection system, the Electronic Fraud Detection System (EFDS), concluding that inadequate income and withholding verification resulted in the IRS’s missing many fraudulent returns (TIGTA, Income and Withholding Verification
PCAOB standard for auditing revenue may be on the horizon
Auditing revenue will need to be an area of focus for PCAOB standard setting in the near future, PCAOB member Jay Hanson said in a speech Monday. FASB and the International Accounting Standards Board are in the closing stages of developing a converged financial reporting standard for revenue recognition. The
Strategic planning leads list of finance priorities
Harnessing data for strategic planning, streamlining processes, and bracing for heightened regulatory concerns are the top priorities for CFOs and the finance function, according to a new survey report. Finance executives were asked to rate how different issues and capabilities ranked among their priorities in business consulting firm Protiviti’s 2014
PCAOB continues focus on audits of internal control over financial reporting
The PCAOB maintained its focus on audits of internal control over financial reporting (ICFR) Thursday by issuing its second report in 11 months on the subject. Staff Audit Practice Alert No. 11, Considerations for Audits of Internal Control Over Financial Reporting, discusses application of PCAOB standards to audits of internal
New opportunities for CPAs in proposed crowdfunding rules
Rules on crowdfunding proposed by the SEC on Wednesday would create opportunities for startups and small, private businesses to raise cash through internet-aided sales of securities—and would create opportunities for work by CPAs. The SEC commissioners voted 5–0 to propose the rules that are designed to comply with a provision
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