News Articles

Accounting and Security: In Industry, the Twain Should Meet

Published on August 02, 2018

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. 

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After Tax Reform, Do Business Meals Remain Deductible?

Published on August 02, 2018

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? 

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Evolving From a Controller to a Strategic Business Partner

Published on August 02, 2018

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. 

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Getting Ready for the New Lease Accounting Guidelines

Published on August 02, 2018

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. 

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EITF Reaches Consensus on Accounting for Cloud Computing Costs

Published on July 10, 2018

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.

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COSO Supplements ERM Framework with Industry Examples

Published on July 10, 2018

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.

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7 Lessons From Adopting Rev Rec

Published on July 10, 2018

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.

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Expense Fraud Estimated to Cost $1.9B Annually

Published on July 10, 2018

Business travel expense fraud is estimated to cost U.S. organizations $1.9 billion per year, based on a new survey.

The survey, of more than 1,000 business travelers in the U.S., U.K. and Australia by Chrome River Technologies, a provider of expense and supplier invoice processing software, found that travel expense fraud is typically perpetrated by younger employees, with 82.9 percent committed by workers under the age of 44. Managers and white-collar, non-managerial staff are more likely to commit expense fraud. Among the survey respondents, 58.1 percent of those who said they cheated were mid-level employees, while vice presidents and senior vice presidents had the lowest fraud rate at a combined 6.2 percent.

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IRS Provides Info on Tax Reform Changes to Moving, Mileage and Travel Expenses

Published on July 10, 2018

The Internal Revenue Service offered information about changes from the Tax Cuts and Jobs Act on the rules for moving expenses, vehicle expenses and unreimbursed employee expenses, along with higher depreciation limits for some vehicles.

The TCJA, the tax overhaul that Congress passed last December, suspends the deduction for moving expenses for tax years beginning after Dec. 31, 2017, until Jan. 1, 2026. During that suspension period, the IRS won’t allow deductions for use of an automobile as part of a move using the mileage rate listed in Notice 2018-03. However, the suspension doesn’t apply to members of the armed forces on active duty who move because of a military order related to a permanent change of station.

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Leases: A portfolio approach

Published on May 21, 2018

Shifting application from an individual lease to a portfolio level offers practicality and cost minimization for companies adopting FASB’s new lease accounting standard. Here are tips for applying a portfolio approach: 

Assess the lease population. Materiality and volume are key characteristics of a lease population. Material individual leases are often specifically identifiable and have established data collection and governance processes. Examples are offices, stores, airplanes, or data centers. Depending on how a contract is executed, a single lease agreement may contain multiple identified leased assets, such as floors in a building or capacity in a data center. These types of leasing agreements benefit from existing processes and are favorably positioned to apply the guidance at a lease, or contract level. However, immaterial individual lease agreements, such as copiers, vehicles, and laptops, may not have robust processes because of the historic, off-balance-sheet accounting treatment. These types of lease agreements may have high volumes, which introduces additional operational complexity. Low-dollar, high-volume leasing agreements could benefit from the option to group leases into portfolios. 

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