September 2016 Article Archives
Starting salaries for U.S. accounting and finance positions will continue to rise in 2017, reflecting high demand for skilled professionals, according to a new salary guide.
Increases in starting salaries will range from 3.0% to 4.3% in 2017, depending on the position, according to the Robert Half 2017 Salary Guide.
The prediction trails the unusually high forecast for 2016, when the guide said starting salaries in accounting and finance would rise 4.0% to 5.3%, depending on the position. But the magnitude of the projected increase for 2017 doesn’t indicate a decrease in competitiveness in the job market, said Tim Hird, executive director of Robert Half Management Resources.Read More >>
Here are some ways to lower any depreciation recapture when disposing of a property. Savvy tax professionals who recommend cost-segregation studies are well aware of the recapture tax rules that require taxpayers to pay back any tax deductions for accelerated depreciation when the property is sold. After all, in the right situation, the net present value of those tax savings far exceeds any recapture tax payback. While the effects of a cost-segregation study can magnify recapture issues, tax professionals should consider a number of worthwhile opportunities to reduce or avoid recapture tax that is realized upon sale of property.Read More >>
Companies that botch the accounting for transactions between different legal entities within their organizations can make their financial reporting slipshod.
Deloitte polled more than 3,800 professionals, most of them people who work in accounting and finance, during a May webcast. It found 25.6 percent of the respondents indicated their company’s intercompany accounting framework was still “developing.” That is, it was a goal they still wanted to achieve, but their companies had not yet standardized their governance.
Another 42.5 percent said their company’s intercompany accounting framework was “defined.” In other words, they were aiming to achieve consistency in intercompany accounting but were still working on doing so. Only 9.2 percent of the respondents indicated their company’s intercompany accounting could be described as “leading.” That is, it “provides a holistic perspective, with efficient systems and communication across critical functions.”
FASB proposed targeted changes to hedge accounting standards Thursday that are designed to help financial statements provide an accurate depiction of how an organization manages risk.
The board proposed that the economic results of an institution’s risk management activities would be portrayed more faithfully by:
• Expanding the use of component hedging for nonfinancial and financial risks.
• Refining the measurement techniques for hedged items in fair value hedges of benchmark interest rate risk.
• Eliminating the separate measurement and reporting of hedge ineffectiveness.
• Requiring for cash flow and net investment hedges that all changes in fair value of the hedging instrument included in the hedging relationship be deferred in other comprehensive income and released to the income statement in the period or periods when the hedged item affects earnings.
• Requiring that changes in the fair value of hedging instruments be recorded in the same income statement line item as the earnings effect of the hedged item.
• Requiring enhanced disclosures to highlight the effect of hedge accounting on individual income statement line items.
The FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and is effective for public business entities for fiscal years beginning after 15 December 2017, and interim periods within those years. For all other entities, it is effective for fiscal years beginning after 15 December 2018, and interim periods within fiscal years beginning after 15 December 2019. Early adoption is permitted.
(Source: EY AccountingLink – US Week in Review – September 1, 2016)
Concerns over divergent practices for reporting on the statement of cash flows led to FASB’s issuance Friday of a new standard for presenting and classifying certain cash payments and cash receipts.
Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, provides guidance for eight specific cash flow issues:
• Debt prepayment or debt extinguishment costs.
• Settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing.
• Contingent consideration payments made after a business combination.
• Proceeds from the settlement of insurance claims.
• Proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies.
• Distributions received from equity-method investees.
• Beneficial interests in securitization transactions.
• Separately identifiable cash flows and application of the predominance principle.