The International Accounting Standards Board (IASB) in February issued International Financial Reporting Standard (IFRS) 2, Share-based Payment, on accounting for such transactions, including grants of share options to employees ( www.iasb.org/news/press.asp ). Until the issuance of IFRS 2, international accounting standards did not address the recognition or measurement of options-based
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Auditing
The AICPA in March continued its efforts to help CPA firms improve their audit services to clients: See “ Institute Launches Employee Benefit Plan Audit Quality Center .” Additional information is available at the center’s Web site, www.aicpa.org/ebpaqc/homepage.htm , which now is accepting member applications.
Contingent Fee Awards—A Different Approach
For many years there have been disputes between taxpayers and the IRS concerning the taxable amount of court awards or settlements taxpayers receive from wrongful termination claims under a contingent fee arrangement. Some courts have held the gross amount of the award represents income to the taxpayer and the amount
IRS Narrows ITIN Criteria
Source: IRS, www.irs.gov , 2004.
FYI
The AICPA is scheduling an additional exam for CPAs interested in earning the AICPA Accredited in Business Valuation (ABV) credential. Usually administered once annually, the exam is being offered a second time this year—on July 26–31—for the benefit of interested members. Information on the credential, the exam and exam review
International
The international financial reporting interpretations committee of the International Accounting Standards Board released in March draft interpretation D5, Applying IAS 29, Financial Reporting in Hyperinflationary Economies for the First Time ( www.iasb.org/uploaded_files/documents/8_39_ifric-d05.pdf ). The proposed interpretation contains guidance on how an entity should restate its financial statements in the first
Disclosure
TThe SEC changed—and proposed further modifications to—its mutual fund rules and forms ( www.sec.gov/news/press/2004-16.htm ). In one action, to improve funds’ disclosure of costs, investments and performance, the commission amended provisions pertaining to shareholder reports and quarterly portfolio disclosures. These new requirements will apply to reporting periods ending on or
Educators: Save Your Receipts
Source: IRS, www.irs.gov , 2003.
The Importance of IRD
EXECUTIVE SUMMARY CPAs MUST EXERCISE CAUTION TO CAPTURE CORRECT income in respect of the decedent (IRD) deductions on clients’ returns. Since clients typically don’t understand the issue well enough to volunteer the existence of IRD, CPAs must make sure they ask clients the right questions to elicit the information they
Valuing a Private Annuity
TAX CASE As more states start using lotteries as revenue sources, CPAs will face an increased number of tax questions from winners. Recently the Fifth Circuit Court of Appeals considered how to value for estate purposes the prize a taxpayer had won. The decision has the potential to affect more
Privacy
The AICPA assurance services executive committee and the Canadian Institute of Chartered Accountants’ assurance services development board jointly issue a privacy framework ( www.aicpa.org/innovation/baas/ ). CPAs and chartered accountants—in both industry and public practice—can use it to help the organizations they serve implement privacy programs. The framework incorporates concepts from
Estate Planning
The Federal Deposit Insurance Corp. (FDIC) in January changed its insurance rules for deposits held in connection with a living trust ( www.fdic.gov/deposit/deposits/deposit/index.html ). Under the new provisions, if a bank fails, the FDIC will insure up to $100,000 of deposits for each beneficiary entitled to a living trust’s assets
Government Accounting
The Federal Accounting Standards Advisory Board (FASAB) issues Statement of Federal Financial Accounting and Auditing Technical Release 3 (revised), Auditing Estimates for Direct Loan and Loan Guarantee Subsidies under the Federal Credit Reform Act and Technical Release 6, Preparing Estimates for Direct Loan and Loan Guarantee Subsidies under the Federal
Compliance
A January 2004 Financial Executives International (FEI) survey of more than 300 of its members who work in public companies of all sizes revealed those entities expected to spend more time and money to comply with the section 404 internal-control requirements of the Sarbanes-Oxley Act of 2002 than anticipated in
Professional Issues
The AICPA releases the results of its annual survey to assess the supply of new accounting graduates and public firms’ demand for their services ( www.aicpa.org/members/div/career/edu/sagdpar.htm ). Conducted in 2003 the poll found the number of bachelor’s degrees awarded had dropped while the level of master’s degrees had increased, matching
Banking
For news from the AICPA and state societies, visit www.cpa2biz.com , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites. In February the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp.
Ethics
The AICPA professional ethics executive committee (PEEC) defers until December 31, 2004, the effective date of its recently established requirement—originally effective September 30, 2003—that a member document in writing his or her understanding with a client regarding all nonattest services to satisfy general requirement no. 3 of Interpretation 101-3, “Nonattest
Tax Notes
TAX NOTES The Treasury Department and the IRS request comments on a draft of a proposed Schedule M-3, Net Income (Loss) Reconciliation for Corporations With Total Assets of $10 Million or More ( www.irs.gov/businesses/corporations/article/0,,id=119992,00.html ), for use by certain corporate taxpayers filing Form 1120, U.S. Corporation Income Tax Return. The
Financial Planning
The AICPA and five other organizations joined forces to sponsor the Project for Financial Independence, which offers free financial planning advice to individuals in need ( www.consultaplanner.org ). Also participating are the Certified Financial Planner Board of Standards, the Financial Planning Association, the National Association of Personal Financial Advisors, the
Service Agrees—Unmarried Parent Can Claim/Waive Dependency Exemption.
n King , 121 TC 245 (2003), the Tax Court held that the IRC section 152(e) support test applies even if the parents were never married to one another (for background see “ Who Gets the Exemption? ” JofA , Jan.04, page 86). Now, the IRS has revised both a
Features
FROM THIS MONTH'S ISSUE
4 ways solo practitioners can stand out
Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
