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Rules Proposed for Accounting Method Changes to Reflect FASB Revenue Recognition Standards
The IRS is asking for comments on proposed procedures for requesting consent to make accounting method changes to reflect FASB's new revenue recognition standards (Notice 2017-17). The proposed revenue procedure contained in the notice would govern changes in a method of accounting for recognizing income when the change is made for the same tax year for which the taxpayer adopts the new financial accounting revenue recognition standards and the ...
Read MoreProposal on Inventory Disclosures
The FASB proposed requiring all entities to make additional disclosures regarding changes in inventory that are outside the normal purchase, manufacture or sale of inventory and the composition of inventory. All entities also would have to make certain inventory disclosures currently required by the SEC. Entities that make segment disclosures would have to make disclosures about inventory by reportable segment if they provide that information to ...
Read MoreReminder About Setting Effective Tax Rates
With companies once again setting their annual effective tax rates, we'd like to remind you of some basic principles. The tax provision for the year is the same whether a company prepares only annual financial statements or interim and annual statements. The tax expense for ordinary income in an interim period is measured using an estimated annual effective tax rate. At the end of each interim period, a company must make its best estimate of the ...
Read MoreEmployers' Presentation of Defined Benefit Retirement Costs Will Change
The FASB issued new guidance that will require employers that sponsor defined benefit plans for pensions and/or other postretirement benefits to present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other ...
Read MoreFASB Simplifies Accounting for Goodwill
The FASB issued new guidance that simplifies the accounting for goodwill impairment for all entities by eliminating the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of today's goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on ...
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