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June 2016  »  Tax & Accounting Update

Tax & Accounting Update

Tax & Accounting Update is provided by Thomson Reuters and based on material published on Checkpoint, its online news and research platform. The update is a quick-reference guide to the most pressing issues coming down the regulatory and administrative pipeline. Visit https://tax.thomsonreuters.com/checkpoint-news/ for further information and daily updates.

Tax News

Disaster victims in Texas qualify for tax relief.

The IRS has announced that victims of the recent storms in counties of Texas that are designated as federal disaster areas qualifying for individual assistance have more time to make tax payments and file returns. Those provided extensions under this guidance are individual, estate, trust, partnership, C corporation, and S corporation income tax returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns.

SEC News

Non-GAAP measures hit with crack-down.

SEC staffers are stepping up efforts to restrict the use of non-GAAP measurements in company earnings releases and regulatory filings. Market regulators have grown concerned that the practice is misleading investors and providing inaccurate information about companies' financial performance. “We are going to crack down,” said Mark Kronforst, chief accountant with the SEC's Corporation Finance Division at a conference at Baruch College in New York on May 5. The SEC has sent some of the companies comment letters questioning certain tax adjustments. The letters, which Kronforst said should become public in the next few weeks, challenge some companies' assumptions that, as their earnings increase over the next several years, they can still make use of the deductions currently available to them.

FASB News

Options for updating equity method accounting slated for review.

FASB plans to review the work its staff has done on equity method accounting at its May 11 meeting. In June 2015, FASB issued Proposed Accounting Standards Update (ASU) 2015-280, Investments—Equity Method and Joint Ventures (Topic 323), in an effort to eliminate the requirement for an equity method investor to account for the difference between an investment's cost and the investor's proportionate share of the net assets of the investment holding (basis difference). Instead, a business would recognize the investment at its cost and no longer determine the acquisition date fair value of the assets and liabilities assumed. Many of the comment letters submitted in response to the proposed changes said that while they agreed with the board's effort to simplify Topic 323, the June 2015 proposal would not achieve that goal.

Financial Accounting Foundation meets in Washington.

The Financial Accounting Foundation (FAF), the parent organization of FASB and GASB, held its quarterly trustee meeting on May 18 in Washington, D.C. FASB Chairman Russell Golden and GASB Chairman David Vaudt gave updates on their boards' standards-setting activities. Andrew McMaster, chairman of FASB's main advisory panel, the Financial Accounting Standards Advisory Council (FASAC), and Robert Scott, who chairs GASB's Governmental Accounting Standards Advisory Council (GASAC), also gave reports.

PCAOB News

Effort to coordinate with IAASB standards-setting moves into the mainstream.

The PCAOB has stepped up its level of cooperation with the International Auditing and Assurance Standards Board (IAASB). “We're doing coordination now on a project-by-project basis,” said PCAOB member Jeanette Franzel following her May 5 speech at the Baruch College financial reporting conference in New York. The joint work calls for staff members on various standards-setting initiatives to act as liaisons with the opposite boards. Franzel said the coordination is taking place for projects that are on each board's respective standard-setting agenda, such as efforts to update the audit guidance for fair value, accounting estimates, and audit firms' supervisory practices (the PCAOB's term for quality controls). For other efforts in which the boards have not yet aligned their timing, the boards are at an earlier stage of cooperation.

IASB News

IFRS Foundation appoints education director for standards.

On April 28, the IFRS Foundation, the IASB's parent organization, appointed Matt Tilling as its director of education, where he will direct the standard-setter's efforts to help nations that have adopted the IFRS implement them consistently. Tilling has been a senior manager at BDO in Perth, Australia, where he provided technical accounting support for the firm and its clients. He replaces Mike Wells, who left the IASB at the end of 2015.

 
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