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FASB changes presentation of defined benefit costs

Published on March 22, 2017

FASB issued an accounting standard that is designed to increase the transparency and usefulness of information about defined benefit costs for pension plans and other post-retirement benefit plans presented in employer financial statements.

The rules changes are described in Accounting Standards Update No. 2017-07Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.

Defined benefit pension cost and post-retirement benefit cost (net benefit cost) comprise several components under GAAP that reflect different aspects of an employer’s financial arrangements, as well as the cost of benefits provided to employees. GAAP requires those components to be aggregated for reporting in financial statements.

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The ROI of Revenue Automation in a Post-ASC 606 World

Published on March 22, 2017

The new revenue recognition standards issued jointly by the Financial Accounting Standards Board and the International Accounting Standards Board have been a long time in the making, and merging U.S. and international standards into a consolidated, principles-based rule has required a collaborative effort. With such a long and slow ratification process, it’s surprising to learn most companies are still assessing the impact, according to the results made available from this expansive survey by PwC and the Financial Executives Research Foundation late last year.

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FASB Clarifies Scope of Asset Derecognition Guidance

Published on March 22, 2017

FASB issued a standard that clarifies the scope of its asset derecognition guidance and adds accounting guidance for partial sales of nonfinancial assets.

The guidance is included in Accounting Standards Update No. 2017-05Other Income—Gains and Losses From the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

The amendments differ from current GAAP primarily for the real estate industry but may also affect other industries such as power and utilities, alternative energy, life sciences, and shipping.

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Nonqualified Patronage Distributions Provide Alternative for Coops

Published on March 22, 2017

Cooperatives distribute member-based income to patrons in the form of patronage dividends. Historically, these took the form of qualified patronage dividends with a portion paid in cash and the rest paid in qualified equity credits. Subchapter T of the Internal Revenue Code has specific requirements for a distribution to be considered “qualified.” Once these requirements are met, the cooperative is allowed a tax deduction for the entire patronage distribution, and the patron typically includes the full distribution in taxable income.

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IRS Warns W-2 Phishing Scam Is Spreading Wider

Published on February 21, 2017

The Internal Revenue Service is cautioning a variety of organizations that the W-2 phishing email scam is now spreading to more organizations beyond corporate America, with schools, restaurants, hospitals and tribal groups now being targeted by cybercriminals.

Last week, the IRS issued a warning about the scam reappearing this tax season for the second year in a row. Cybercriminals tricked payroll and HR employees into giving employee names, SSNs and income information in response to emails from fraudsters posing as corporate executives. Identity thieves then filed tax returns using the employees’ names seeking their tax refunds. On Thursday, the IRS, along with state tax agencies and the tax industry said the Form W-2 email phishing scam has evolved beyond the corporate world and is now spreading to other sectors, including school districts, tribal organizations and nonprofits.

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Preparing for the New Rev Rec Standards: Choosing the Right Adoption Method

Published on February 21, 2017

As companies prepare for the new revenue accounting standards that take effect for all public companies in 2018, a wide range of accounting and financial executives are tasked with evaluating what adjustments will need to be made and what new procedures will need to be put in place for recording various financial metrics.

Revenue recognition is a critical and often complex accounting area that companies can’t afford to get wrong, so many boards and investors want to know what to expect and what needs to be done to get through the implementation.

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Cost Segregation in a Post-repair Regs World

Published on February 21, 2017

For many years, corporate accounting professionals have been taking advantage of cost segregation studies to provide significant tax benefits for their businesses by accelerating the depreciation on qualified fixed assets.

By depreciating the personal property costs of such assets over five or seven years (and land improvements over 15 years instead of the typical 39-year recovery period for general building property), the additional deductions can be used to offset taxable income. This accelerated depreciation, in turn, provides additional cash flow.

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FASB Drops Step 2 From Goodwill Impairment Test

Published on February 21, 2017

FASB eliminated Step 2 from the goodwill impairment test in an effort to simplify accounting in a new standard issued.

Under the amendments issued, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

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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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