May 2017 Article Archives

IRS Adjusts Health Savings Account Limits for 2018

Published on May 30, 2017

In Revenue Procedure 2017-37, the IRS said the annual contribution limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,450. For calendar year 2018, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $6,900. HSAs typically require high deductibles, but they allow people to set aside money from their paychecks on a pre-tax basis for medical expenses. 

For calendar year 2018, according to the IRS, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage or $13,300 for family coverage.

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AICPA Proposes Standard for Auditing Employee Benefit Plans

Published on May 30, 2017

The American Institute of CPAs has proposed a new standard for auditing the financial statements of employee benefit plans, after the Department of Labor released a report criticizing the quality of ERISA plan audits. 

The AICPA’s Auditing Standards Board issued an exposure draft for the proposed Standard. Proposed Statement on Auditing Standards (SAS), Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, would specifically address audits of financial statements of employee benefit plans subject to the Employee Retirement Income Security Act of 1974, or ERISA for short. 

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Risk Management Costs Dove 5% in 2016

Published on May 30, 2017

With the insurance industry glutted with capital, corporations were among those benefiting from the oversupply by paying lower prices for property-casualty coverage in 2016, according to the Risk and Insurance Management Society’s annual benchmark study

The main drivers of a 5% overall decline in risk-related expenses were a 12% drop in the cost of covering property exposures; of 6% for workers’ compensation; and of 5% for liability, according to the study. The only area in which risk managers saw rising  costs was to cover fidelity, surety, and crime losses. 

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New Revenue Recognition Standard Closing in on Manufacturers and Distributors

Published on May 30, 2017

When it comes to revenue recognition, accounting principles generally accepted in the United States (GAAP) have been industry-specific and rules-based. For most manufacturing and distribution companies, the rules have been fairly simple. But as commerce becomes more global and countries use different standards of their own, revenue recognition has become increasingly disjointed. 

To remedy this, U.S. and international accounting standard-setters have agreed on a new principles-based standard for consistent revenue recognition. The new standard’s core principle is “to depict the transfer of promised goods or services to customers in an amount that reflects the consideration expected to be received.” 

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Overtime and Stress Are Common During Month-end Close Processes

Published on May 30, 2017

Overtime and Stress Are Common During Month-end Close Processes

Automation has helped improve the efficiency and accuracy of the month-end close, but finance departments still feel pressure to close the books faster.

Two recent surveys by software providers underscore several key issues facing finance professionals 12 times a year: 

87% said they worked overtime during the financial close process, according to a survey by Adra.

60% said stress levels rise during the month-end close, according to survey by FloQast, and one-fourth of respondents said the pressure related to closing has resulted in employees leaving their organization.

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