News Articles

<< Older Articles
Newer Articles >>

Hedging May Get Easier Under New FASB Accounting Standard

Published on June 21, 2017

A new standard for hedge accounting that FASB expects to approve soon is designed to provide better information to investors and eliminate accounting obstacles that prevented some organizations from using hedge accounting.

All seven FASB members said during a public meeting that they plan to support the standard when the final ballot draft is issued in a few weeks. After FASB approves the standard on the written ballot, it is expected to be issued in mid-August.

Under current GAAP, ASC Topic 815, Derivatives and Hedging, provides special accounting rules for hedging activities. But the standard was written in 1998, and practice issues have evolved over time. Financial statement preparers told FASB that they had difficulties applying hedge accounting and that their risk management techniques are not aligned with the accounting under the current standard. 

Read More >>

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.

Read More >>

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. 

Read More >>

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. 

Read More >>

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.” 

Read More >>

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.

Read More >>

Revenue Recognition Disclosure Requirements: A Challenge That Can't Wait

Published on April 20, 2017

FASB's revenue recognition standard includes complex disclosure requirements that will take effect sooner than companies think.

As companies scramble to implement the FASB's revenue recognition standard, many are primarily focusing on the revenue and measurement requirements, which have the highest profile. Meanwhile, many companies are largely ignoring the new disclosure requirements, treating them as a minor detail that can be quickly and easily addressed once the other requirements have been satisfied. That’s a mistake.

Read More >>

IRS Enforcement Activities Dropped in 2016

Published on April 20, 2017

The IRS reported several large drops in its enforcement activities in fiscal year 2016, including a 16% drop in audits, a 40% drop in levies, and a 9% drop in liens compared to the prior year. These figures were revealed in the IRS's 2016 Data Book, which reports on the agency's activities for the fiscal year beginning Oct. 1, 2015, and ending Sept. 30, 2016.

According to the Data Book, the IRS audited just over 1 million individual tax returns in FY 2016, almost 16% fewer than last year's 1.2 million. The percentage of individual taxpayers audited fell to 0.7%, which the IRS said was the lowest rate in more than a decade. The Data Book also reports that the IRS’s enforcement budget was reduced by almost $107 million in FY 2016.

Read More >>

Rules Proposed for Accounting Method Changes to Reflect FASB Revenue Recognition Standards

Published on April 20, 2017

The IRS is asking for comments on proposed procedures for requesting consent to make accounting method changes to reflect FASB's new revenue recognition standards (Notice 2017-17). The proposed revenue procedure contained in the notice would govern changes in a method of accounting for recognizing income when the change is made for the same tax year for which the taxpayer adopts the new financial accounting revenue recognition standards and the change is made as a result of, or directly related to, the adoption of the new revenue recognition standards. 

Read More >>

Proposal on Inventory Disclosures

Published on April 20, 2017

The FASB proposed requiring all entities to make additional disclosures regarding changes in inventory that are outside the normal purchase, manufacture or sale of inventory and the composition of inventory. All entities also would have to make certain inventory disclosures currently required by the SEC. Entities that make segment disclosures would have to make disclosures about inventory by reportable segment if they provide that information to the chief operating decision maker. Entities that apply the retail inventory method would have to make additional qualitative and quantitative disclosures about the critical assumptions they use in their inventory calculations. The proposal is part of the FASB’s disclosure framework project, under which the Board also proposed changes to the disclosure requirements for income taxes, fair value measurements and defined benefit plans. The Board also plans to review disclosure requirements for interim reporting.

Read More >>
<< Older Articles
Newer Articles >>