Congress adjourned its year-end lame-duck session on Wednesday after passing legislative fixes for several pending tax issues, including the estate tax, the expiration of the 2001 and 2003 tax cuts, an alternative minimum tax (AMT) patch, and extensions of many expired provisions. However, it failed to repeal the expanded Form
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FASB Aims for Consistency in Business Combination Pro Forma Disclosures
FASB on Wednesday issued an Accounting Standards Update (ASU) that it said should end a “diversity in practice” in the disclosure of pro forma revenue and earnings for business combinations. The ASU says that, if comparative financial statements are presented, the pro forma revenue and earnings of the combined entity
CPAs Gain Statutory Exemption From Red Flags Rule
Following years of advocacy efforts and a legal battle, CPAs received a permanent exemption from the Federal Trade Commission’s Red Flags Rule with President Barack Obama’s signing of the Red Flag Program Clarification Act of 2010 on Saturday. The Red Flags Rule, which was released Nov. 9, 2007, under the
GASB Clarifies Accounting for Partnership Arrangements
GASB issued a pair of new standards last week, one that addresses how to account for and report service concession arrangements (SCAs) and another that the board said is designed to improve financial reporting for governmental entities by amending the requirements of Statement no. 14 and Statement no. 34. Statement
IASB Amends Income Tax, IFRS Adoption Rules
The International Accounting Standards Board (IASB) on Monday issued amendments to IAS 12, Income Taxes, and what it called “narrow amendments” to IFRS 1, First-time Adoption of International Financial Reporting Standards. The amendments to IAS 12 were proposed in an exposure draft in September. IAS 12 requires an entity to
Revised Rules for Goodwill Impairment, New Health Care Proposals
The most recent work of FASB’s Emerging Issues Task Force resulted in a new update and two proposed updates to the FASB Accounting Standards Codification (ASC). ASC Update no. 2010-28, Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero
IRS Releases 2011 Withholding Tables
In the wake of Thursday night’s passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, the IRS released the withholding tables for employers to use in 2011. The IRS was unable to issue the tables earlier because of uncertainty over whether the current tax rates would be
Survey: Large Companies Heavily Engaged in Sustainability Strategies
More than three-fourths of large companies surveyed have a formal sustainability strategy compared to a third of smaller companies, according to findings released Thursday by the AICPA, the Chartered Institute of Management Accountants (CIMA) and the Canadian Institute of Chartered Accountants (CICA). On a comparative basis, 88% of CIMA respondents
Tax Cut Extension Enacted
The House of Representatives on Thursday by a vote of 277–148 passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, HR 4853, which postpones the sunset of the 2001 and 2003 tax cuts, reduces the estate tax, extends a large number of expired provisions, and extends
Firm Survey Shows Profitability Preserved Amid Flat Revenues
Despite flat revenues, CPA firms managed to maintain profitability during the past two years, according to the 2010 PCPS/TSCPA National Management of an Accounting Practice (MAP) Survey, a biennial survey conducted by the AICPA’s Private Companies Practice Section and the Texas Society of CPAs. The survey results provide a comprehensive benchmarking
IRS Maintains Stance on Omissions from Gross Income and Overstatement of Basis
The IRS on Wednesday released final regulations defining an omission from gross income for purposes of the six-year minimum period for assessment of tax attributable to partnership items and the six-year period for assessing tax (TD 9511). The regulations are designed to resolve the question of whether an overstatement of
Senate Approves Tax Cut Extender Bill
On Wednesday, the Senate voted 81–19 in favor of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Senate Amendment 4753 to HR 4853, which would postpone the sunset of the 2001 and 2003 tax cuts, reduce the estate tax, extend a large number of expired provisions,
PCAOB Proposes Interim Program for Inspection of Broker-Dealer Audits
The PCAOB on Tuesday proposed for public comment a temporary rule to establish an interim inspection program for registered public accounting firms’ audits of brokers and dealers, while the board considers the scope and other elements of a permanent inspection program, consistent with the Dodd-Frank Wall Street Reform and Consumer
Federal Court Rules Health Care Insurance Mandate Unconstitutional
A federal district court has held that the health care reform legislation’s mandate that individuals obtain health insurance is unconstitutional (Virginia v. Sebelius, docket no. 3:10-CV-188 (E.D. Va. 12/13/10)). In so holding, however, the court severed that mandate from the rest of the health care reform legislation and refused to
AICPA: Revenue Recognition Proposal Impractical
The AICPA’s Financial Reporting Executive Committee (FinREC) this week voiced extensive concerns with a joint FASB-IASB proposed standard on revenue recognition that is intended to apply across all industry sectors. “We agree with the theoretical merit of many of the concepts included in the proposed standard,” FinREC said in its comment
Final Regs Issued Requiring Uncertain Tax Position Disclosure Statement
On Monday, the IRS issued final regulations requiring some corporations to file a Schedule UTP, disclosing their uncertain tax positions when filing a return (TD 9510). The final regulations adopt regulations proposed in September (REG-119046-10), with one change relating to the effective date. For prior coverage, see “IRS Issues Proposed
Panel Moves Forward With Recommendations for a Separate Private Company Financial Reporting Board
A more detailed outline of what would be a blue ribbon panel recommendation for a new private company accounting standard-setting board began to take shape Friday. The new standard-setting board could have between five and seven members with private company financial reporting experience, an estimated $4 million annual budget and
Provisions in the Senate’s Tax Cut Extension Bill
Senate Majority Leader Harry Reid, D-Nev., introduced legislation late Thursday that would postpone the sunset of the 2001 and 2003 tax cuts, reduce the estate tax, and extend a number of expired provisions, as well as extending unemployment benefits. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of
FASB May Delay Troubled Debt Restructuring Standard for Public Entities
FASB on Thursday proposed to delay indefinitely the effective date of new disclosures about troubled debt restructurings in Accounting Standards Update (ASU) no. 2010-20 for public-entity creditors. Currently, the new standard is scheduled to become effective for interim and annual reporting periods ending on or after Dec. 15, 2010. Comments
IASB Issues Guidance on Management Commentary
The International Accounting Standards Board (IASB) on Wednesday published an IFRS Practice Statement Management Commentary, which the standard setter said is a broad, nonbinding framework for the presentation of narrative reporting to accompany financial statements prepared in accordance with IFRSs. The Practice Statement is not an IFRS, therefore, an entity
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FROM THIS MONTH'S ISSUE
Tax Court upholds passport notice certification
The IRS issued a passport notice certification of a “seriously delinquent tax debt” of more than $1.6 million in trust fund recovery penalties.
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Current developments in taxation of individuals: Part 2
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