News Articles

The Financial Accounting Standards Board is proposing to make a number of narrow improvements in the lease accounting standard as public companies get ready for it to take effect at the end of the year.

The proposal aims to reduce some of the costs and implementation headaches of applying the leasing standard. It would also clarify a specific requirement in the standard related to lessor accounting with sales taxes and other similar taxes collected from lessees. The new guidance would allow lessors, as an accounting policy election, to not evaluate whether these taxes are costs of the lessor or costs of the lessee. Instead, a lessor could account for them as costs of the lessee and exclude the amounts from lease revenue and the associated expense.

The Treasury Department and the Internal Revenue Service proposed regulations to increase and expand the first-year depreciation deduction for qualified property from 50 to 100 percent, carrying out a provision of the Tax Cuts and Jobs Act.

The tax code overhaul, which Congress passed last December, increased the first-year depreciation deduction from 50 to 100 percent for qualified property acquired and placed in service after Sept. 27, 2017. The increased benefit aims to expand opportunities for small and midsized businesses to expense equipment purchases and make capital investments in their companies. The proposed regulations are among a litany of rulemaking that the Treasury and the IRS are expected to roll out in the years ahead to implement various provisions of the far-reaching tax overhaul.

The IRS issued proposed regulations regarding the qualified trade or business income deduction under Sec. 199A, which was enacted by P.L. 115-97, the law known as the Tax Cuts and Jobs Act (TCJA) (REG-107892-18). At the same time, it issued Notice 2018-64, which provides guidance on how to compute W-2 wages for purposes of the deduction, along with FAQs. The proposed rules include a way that taxpayers can group or aggregate separate trades or businesses and an anti-abuse rule designed to prevent taxpayers from separating out parts of an otherwise disqualified business in an attempt to qualify those separated parts for the Sec. 199A deduction.

Industry accountants see accounting software and online bookkeeping software as the technologies that will have the greatest impact on the profession in the next five years. Closely following these are data analytics and cloud solutions. Security, however, takes a back seat.

This data was compiled from a survey conducted by BlackLine, which attempted to find out how company finance departments globally interact with technology, and how they are handling security concerns surrounding customer and company data. 

Since the passage of the Tax Cuts and Jobs Act (TCJA) last December, taxpayers have been asking if business meals are still deductible business expenses. This question is the result of the law specifically disallowing business deductions for activity that constitutes entertainment, amusement, or recreation — while continuing to allow a 50 percent deduction on business meals. Which raises the question: Is a meal itself considered entertainment, and therefore disallowed under the new rules? 

Unstoppable forces continue to drive business growth and create opportunities for the controllership function. Two studies explore these opportunities: One takes a closer look at controllership's evolution to become a strategic business partner. The other examines how to execute on a new vision for the changing role of the controller. 

Controllers in the United States spend nearly 70 percent of their time performing traditional tasks, such as closing the books or ensuring compliance with accounting standards. As a result, decisions involving organizational strategy often exclude their input. For example, controllers may be asked to quantify quarterly spend on headcount, but they may be left out of executive meetings on organizational restructuring initiatives. 

The implementation deadline for the new IFRS 16/ASC 842 lease accounting standards is rapidly approaching. The new standards will require organizations to report and disclose all lease obligations for buildings, office space, motor vehicles and other equipment, and reclassify them as assets and liabilities. Does your organization have an implementation plan and adequate system in place that will meet the new requirements? 

The new IFRS and FASB guidelines for lease accounting are described under IFRS 16 and U.S. GAAP ASC 842. The big change is that all leases will now be recognized as assets and liabilities, unless the lease term is 12 months or less, or the underlying asset has a low value. 

The Financial Accounting Standards Board's Emerging Issues Task Force has reached a consensus on how to account for implementation costs in a cloud computing arrangement that's considered a service contract.

In March, FASB issued a proposed accounting standards update to clarify the accounting for such implementation costs. It asked for feedback to be submitted by the end of April. At a meeting of FASB's Emerging Issues Task Force last week, the EITF reached a consensus that a customer in a cloud computing arrangement that is a service contract should apply guidance on internal-use software to determine which implementation costs to recognize as an asset. The EITF also reached some decisions on other items, including scope, subsequent measurement, presentation and disclosure, and effective date.

The Committee of Sponsoring Organizations of the Treadway Commission, also known as COSO, has added a supplement to its widely used Enterprise Risk Management Framework, including detailed examples of how to use the ERM Framework, written by PwC under the direction of COSO's board.

The Compendium of Examples links together the concepts and applications of ERM, illustrating various scenarios based on research, interviews and case studies.

COSO released an updated version of the ERM Framework last September. It’s one of the most widely used risk management frameworks in the world, employed by many organizations that also rely on COSO's Internal Control Integrated Framework, which the group updated in 2013.

Public companies with a December 31 year-end have recently completed months-long (if not years-long) efforts on the adoption of ASC Topic 606, "Revenue from Contracts with Customers" (Topic 606). The adoption of Topic 606 has been one of the most time-consuming accounting projects taken on by most companies since Sarbanes-Oxley Act Section 404 over a decade ago. As Topic 606 effectively replaces all legacy GAAP rules around revenue recognition, it has far-reaching implications for all companies in all industry types.