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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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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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