The IRS Oversight Board released its annual report to Congress on Thursday, describing the IRS’ performance during fiscal 2010 and its progress in meeting the goals in its strategic plan. The board describes the challenges the IRS has faced in recent years in administering new tax laws enacted to provide
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FASB, IASB Issue “Largely Identical” Guidance on Fair Value
FASB and the International Accounting Standards Board (IASB) on Thursday issued guidance on fair value measurement and disclosure requirements that the boards said in a press release is “largely identical” across IFRS and U.S. GAAP. The guidance, set out in IFRS 13, Fair Value Measurement, and FASB Accounting Standards Update
FAF Holding Webcast on Post-Implementation Review
The Financial Accounting Foundation (FAF), FASB’s parent organization, is hosting a webcast May 20 on its post-implementation review effort, which is focused on generating real-world feedback on accounting and financial reporting standards. A pilot of the post-implementation review process has begun on a FASB standard, the details of which will
FASAB Modifies Definition of “Deferred Maintenance”
The Federal Accounting Standards Advisory Board (FASAB) issued a standard that it said is aimed at resolving problems created, in part, by agencies’ use of different interpretations of “deferred maintenance.” The board said that Statement of Federal Financial Accounting Standards (SFFAS) no. 40, Definitional Changes Related to Deferred Maintenance and
Government Contractor Withholding Delayed to 2013
The IRS issued final regulations (TD 9524) further postponing implementation of mandatory 3% withholding on payments from government entities to contractors and providing interim guidance. The final regulations also adopt a $10,000 withholding threshold for any single payment and provide a transition rule under which interest and penalties will not
FinCEN: Suspected Terrorist Financing, Money Laundering up in 2010
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said suspicious activity reports (SARs) categorized as Terrorist Financing and BSA/Structuring/Money Laundering rose considerably in 2010 compared with 2009. Terrorist Financing SARs rose 30%; Money Laundering filings, after declining in 2009, increased 9%. The SAR Activity Review—By the Numbers, Issue 16, said
Tax Court Rejects Taxpayer’s Argument That Denial of Accounting Method Change Was Arbitrary
The Tax Court held that the IRS’ rejection of a taxpayer’s accounting method change request was not the result of an “automatic rejection policy” and that the IRS acted within its proper discretion in denying the request (Lattice Semiconductor Corp. v. Commissioner, TC Memo 2011-100). The taxpayer produced electronic components
IRS Responds to AICPA Accounting Software Examination Letter
In a March 29 letter from Patricia Thompson, chair of the AICPA’s Tax Executive Committee, to Chris Wagner, commissioner of the IRS’ Small Business/Self-Employed Division, the AICPA communicated its concerns regarding the Service’s program to request the accounting software files of certain small business taxpayers under examination; the letter cites
FASB Amends “Effective Control” Criteria for Repo Transactions
FASB issued an Accounting Standards Update (ASU) that it said is intended to improve financial reporting of repurchase agreements (“repos”) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The board said the amendments in ASU no. 2011-03, Transfers and
Featured Online Content for May 2011
FEATURED VIDEO China’s Accounting Landscape With a fast-growing economy powering demand for accountants, the Chinese government has made a commitment to spurring development in the accounting profession, says Winnie C.W. Cheung, chief executive and registrar of the Hong Kong Institute of Certified Public Accountants. That initiative is designed to build
IRS Allows Deduction for Payments for Preferred Stock Used to Settle Bank’s Lawsuits
In a private letter ruling released on Friday, the IRS’ Office of Chief Counsel allowed a private bank catering to high-wealth individuals to deduct as ordinary and necessary trade or business expenses the payments it made to settle lawsuits arising from criminally fraudulent activities by one of the bank’s fund
AICPA Recommends Ways IRS Could Reduce Schedule M-3 Burdens
In a letter to Heather Maloy, commissioner of the IRS’ Large Business and International Division, Patricia Thompson, chair of the AICPA’s Tax Executive Committee, encouraged the IRS to collaborate with external stakeholders in revising Schedule M-3, Net Income (Loss) Reconciliation, and suggested some revisions to reduce taxpayers’ compliance burdens. The
SEC Report Recommends No New SOX 404(b) Exemptions
An SEC study of Section 404(b) of the Sarbanes-Oxley Act recommends no new exemptions to the requirements. The study by the SEC’s Office of the Chief Accountant was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Its scope was restricted to companies with a market capitalization between
U.K. Bribery Act Requires New Precautions for Global Companies
The U.K. Bribery Act 2010 taking effect July 1 represents one of the biggest changes in global anticorruption law since the USA Patriot Act in 2001, but awareness of its provisions remains very low, according to a Deloitte webcast poll. While 78% of respondents who participated in the poll said
FASB Issues Goodwill Impairment Proposal
FASB issued an exposure draft of a proposed Accounting Standards Update intended to simplify how businesses are required to test goodwill for impairment. “Nonpublic companies have expressed concerns to the Board about the cost and complexity of performing the goodwill impairment test,” FASB member Daryl Buck said in a press
IASB and FASB Report Progress on Convergence
FASB and the International Accounting Standards Board (IASB) on Thursday published a progress report on their joint convergence projects. Since their previous report in November, the boards have: Completed five projects. In the next few weeks, the IASB will issue new standards on consolidated financial statements (including disclosure of interests
IRS Issues Proposed Regulations on Controlled Group Deferred Losses
On Wednesday, the IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group (REG-118761-09). Generally, for any loss on the sale or exchange of property between certain related persons, no deduction is allowed, except
SEC Forum to Address Benefits, Challenges of IFRS for U.S.
The SEC on Wednesday said it is hosting a round-table meeting July 7 to discuss benefits or challenges in potentially incorporating IFRS into the financial reporting system for U.S. issuers. The SEC said in a press release that the meeting will include three panels representing investors, smaller public companies, and
FASB, IASB Want Feedback on Convergence Burden, Timeline
FASB and the International Accounting Standards Board (IASB) posted a survey online to collect views from users about the time and effort that will be involved in adopting several new standards and when those standards should be effective. The boards are seeking further input on these issues because, they said
IRS Extends, Modifies Program Allowing Truncated Social Security Numbers on Information Returns
The IRS announced that it is extending and modifying a pilot program designed to deter identity theft (Notice 2011-38). Under the program, which was introduced in 2009, filers of certain paper information returns are allowed to truncate the payee’s Social Security number on the payee statement. The notice extends the
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