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Revenue Recognition Path Forward

Published on February 21, 2017

This compilation of recent articles from the editors of Bloomberg BNA’s Accounting Policy & Practice Report provides valuable insights into the new FASB and IASB standards on recognizing revenue.

https://assets.sourcemedia.com/b2/2c/0ac536a4402ab313d4856c4b867f/rev-rec-special-report-nov-2016.pdf

(Source: AccountingToday - Tax Practice - January 31, 2017)

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New Form I-9 for all U.S. Employers

Published on February 21, 2017

As of 1/22/2017, employers are required to use the new version of Form I-9 to verify identity and employment eligibility of employees. See the new form (11/14/2016 N version) at https://www.uscis.gov/i-9. Form I-9 found at other sites may not be the correct version. All prior versions are obsolete. 

Form I-9 is required for all new employees (hired after Nov. 6, 1986) or for the reverification of expiring employment authorization of current employees (if applicable). Under § 274A of the Immigration and Nationality Act, 8 U.S.C. 1324a, and as enforced by US Immigration and Customs Enforcement, employers who fail to properly complete and retain Form I-9 may be subject to penalties.

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Companies not ready to automate fixed assets accounting

Published on January 23, 2017

Relatively few companies are using dedicated fixed assets accounting software, according to a new survey, and are instead relying on homegrown spreadsheets and databases. 

The survey, by Bloomberg BNA, which markets its own fixed assets software, found that only about a third, or 37.6 percent, of the 100 U.S. finance executives it polled are using dedicated fixed assets systems. Nearly half of them (or 46.8 percent) said their fixed assets teams spend an average of four to five days a month (or nearly a quarter of their time) on spreadsheet and database maintenance for fixed assets. Another third (34.2 percent) said they spend six to 15 days on spreadsheet and database maintenance for fixed assets. 

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Proposal Would Simplify How Entities Determine the Balance Sheet Classification of Debt

Published on January 23, 2017

The FASB proposed replacing today’s rules-based guidance for determining whether to classify debt as current or noncurrent on the balance sheet with a principles-based approach. Debt would be classified as noncurrent only when it is contractually due to be settled more than one year (or operating cycle, if longer) after the balance sheet date or when the entity has a contractual right to defer settlement for at least one year (or operating cycle, if longer) after the balance sheet date. While this approach would require entities to classify debt based on legal rights existing at the balance sheet date, an exception would be provided for waivers of debt covenant violations received after the balance sheet date but before the financial statements are issued. Entities would no longer be able to consider their intent and ability to refinance short term obligations after the balance sheet date on a long-term basis to support noncurrent classification . Comments are due by May 5, 2017

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FASB Clarifies Business Definition

Published on January 23, 2017

The Financial Accounting Standards Board has released guidance aimed at clarifying the official definition of a “business” for purposes of the accounting rules. 

The new accounting standards update issued recently by FASB affects any company or other type of reporting organizations that needs to determine whether it has acquired or sold a business. 

The definition of a business can have an impact on many areas of accounting, such as acquisitions, disposals, consolidations and goodwill. The new standard should provide more assistance to companies and other types of organizations in deciding whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in the update offer a framework accountants can use for weighing when a set of assets and activities actually constitutes a business. The changes come in response to demand from FASB constituents who asked for further clarification on the definition, especially in terms of how to account for acquisitions. 

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FASB addresses debt classification, inventory disclosures

Published on January 23, 2017

In separate proposals issued recently, FASB addressed balance sheet classification of debt and the disclosure requirements for inventory under the board’s Disclosure Framework. 

The proposed Accounting Standards Update on debt classification is designed to simplify guidance used to determine whether debt should be classified as current or noncurrent in a classified balance sheet. If approved, the proposed guidance would replace existing, fact-specific rules with an overarching, cohesive principle for debt classification that would focus on a borrower’s contractual rights and obligations that exist as of the reporting date. 

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IRS Adjusts Employer-Provided Vehicle Maximums for 2017

Published on January 23, 2017

The Internal Revenue Service has issued a notice describing the maximum vehicle values for 2017 that taxpayers need for determining the value of personal use of employer-provided vehicles under the Income Tax Regulations’ special valuation rules. 

Notice 2017-03 applies to employer-provided passenger automobiles first made available to employees for personal use in calendar year 2017 under section 1.61–21 (d) and (e) of the Income Tax Regulations. 

The maximum value of employer-provided vehicles first made available to employees for personal use in calendar year 2017 for which the vehicle cents-per-mile valuation rule could apply is $15,900 for a passenger automobile and $17,800 for a truck or van. 

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FASB proposal would improve hedge accounting, AICPA committee says

Published on December 22, 2016

A FASB proposal for targeted improvements to accounting for hedging activities would simplify and improve the current model, according to a comment letter sent by the AICPA Financial Reporting Executive Committee (FinREC). 

In an effort to improve the hedge accounting model, FASB on Sept. 8 issued Proposed Accounting Standards Update, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities

According to FinREC, changes to the current standard are needed because the standard is challenging for reporting entities to apply, and because it is difficult to achieve hedge accounting for financial and nonfinancial risks under the current guidance. 

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Year-End Tax Tips

Published on December 22, 2016

Steps to take before the New Year for a better tax return in 2017

1. First – what’s not changing:  While President-elect Trump is in a strong position to enact his promise of lower tax brackets next year, it’s important to remember that the current income tax rates of 10, 15, 25, 33, 35 and 39.6 percent are still in effect for the tax returns being filed next mid-April. The standard deduction amounts remain $6,300 single/married filing separately, and $12,600 for married filing jointly. The standard deduction for heads of households, however, rises to $9,300.

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More Time for Some ACA Reporting

Published on December 22, 2016

The IRS has extended the 2017 due date for employers and coverage providers to furnish information statements to individuals – but the due date for filing with the IRS has not been extended. 

IRS Notice 2016-70 explained the upcoming 2017 reporting due dates:

Applicable large employers, including those that are self-insured, must send Forms 1095-C to full-time employees by March 2; and must file Forms 1095-C and 1094-C with the IRS by Feb. 28 for paper and March 31 for e-filing. (Applicable large employers that provide employer-sponsored self-insured health coverage to non-employees may use either 1095-B or 1095-C to report coverage for those individuals and other family members.) 

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