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The Risks of Intercompany Accounting
Companies that botch the accounting for transactions between different legal entities within their organizations can make their financial reporting slipshod. Deloitte polled more than 3,800 professionals, most of them people who work in accounting and finance, during a May webcast. It found 25.6 percent of the respondents indicated their company’s intercompany accounting framework was still “developing.” That is, it was a goal ...
Read MoreFASB Proposes Targeted Changes to Hedge Accounting Rules
FASB proposed targeted changes to hedge accounting standards Thursday that are designed to help financial statements provide an accurate depiction of how an organization manages risk. The board proposed that the economic results of an institution’s risk management activities would be portrayed more faithfully by:• Expanding the use of component hedging for nonfinancial and financial risks.• Refining the measurement techniques ...
Read MoreFASB clarifies the classification of certain cash receipts and cash payments
The FASB issued final amendments to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and is effective for public business entities for fiscal years beginning after ...
Read MoreFASB Seeks Uniformity in Cash Flow Presentation
Concerns over divergent practices for reporting on the statement of cash flows led to FASB’s issuance Friday of a new standard for presenting and classifying certain cash payments and cash receipts. Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, provides guidance for eight specific cash flow issues: • Debt prepayment or debt extinguishment ...
Read MoreSales and Use Tax Audit Sampling
Business taxpayers sometimes face surprisingly large sales and use tax audit assessments when the tax or taxable amount is projected from seemingly small and infrequent errors in the auditor's sample. Depending on how the sample is designed and weighted, large audit assessments can either reasonably reflect the taxpayer's actual facts or unintentionally be in error due to the sampling methodology itself. Many taxpayers are not equipped to ...
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