By: Marti Asher, Marci Thomas, Mig Murphy Sistrom, Kevin Leder, Karen Stanley
By Karen Stanley
The Financial Accounting Standards Board and the Private Company Council (PCC) voted Tuesday, July 16, 2013, to finalize the Private Company Decision-Making Framework, which outlines criteria they intend to use for determining whether and under what circumstances it is appropriate to adjust financial reporting requirements for private companies following US GAAP. The framework is intended to help identify opportunities to reduce the cost and complexity of preparing private company financial statements in accordance with US GAAP. FASB had previewed the decision-making framework in April. The finalized framework is expected to be issued sometime this summer.
Several proposals for improving the accounting for private companies have already been issued related to accounting for intangible assets acquired in business combinations, goodwill, and certain types of interest rate swaps under US GAAP. Another proposal was discussed at Tuesday’s meeting related to the consolidation of variable interest entities—the proposed GAAP alternative would exempt private companies from applying the consolidation guidance for variable interest entities under common control leasing arrangements.
The Private Company Decision-Making Framework is not to be confused with the AICPA’s Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs), which is intended to be a non-GAAP framework.
By Kevin Leder
The US House of Representatives passed the Audit Integrity and Job Protection Act on July 8, 2013. The bill would prohibit the Public Company Accounting Oversight Board (PCAOB) from requiring mandatory audit firm rotation.
On the eve of the vote, the AICPA sent a letter to all House members stating, “It is clear from the record that such a requirement would be costly and likely have significant negative impacts on audit quality with uncertain benefits.”
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OMB and Yellow Book Updates
By Marci Thomas
In early July, the OMB finally released the compliance supplement for 2013. You can access it here.
The new supplement contains several changes to programs and could reduce the amount of compliance requirements to be tested for several programs.
No word as yet about the Grant Reform by the OMB but stay tuned.
NFP Tax Updates
By Mig Murphy Sistrom
How does the IRS mess affect you?
Unless you’ve been hiding under a rock, you know that the IRS tax-exempt entities division is under siege for allegedly exercising improper scrutiny over certain 1024 forms, with political motivations. Nonprofits and practitioners are wondering how this scandal could affect our work. There are a few ways we could be impacted:
- Processing delays. While IRS staff is focusing on congressional hearings and other work associated with the scandal, we may notice delays in processing applications for exemption. Members of Congress have suggested there may be cuts to the IRS’s operating budget, which would necessitate layoffs and certainly add to processing delays.
- Expedited processing. On the other hand, the IRS has announced it will fast-track processing of Forms 1024 already in progress which have potential issues related to political activities.
- Regulatory changes. The scandal has heightened public awareness of IRS rules regarding tax exemption, and editorial pages and blogs are teeming with ideas about changes needed. Some suggest tax-exemption should be eliminated altogether. Others suggest determinations should be made by judges, not IRS staff. Others have raised concerns about the self-reporting of exemption by 501(c)(4)s, 501(c)(6)s, and others who claim to operate under the applicable code section but do not have to file a Form 1024. While it is too soon to predict specific changes, we should all stay tuned.
By Marti Asher
The AIPCA is exploring the possibility of adding an “Audit Quality Center for NonProfit Sector”
The AICPA is studying the feasibility of introducing a new Center to Serve the Not-for-Profit Sector. The Center would keep members working in public accounting and industry abreast of developments in the areas of financial statement auditing, accounting, and tax through means as web events and semi-monthly e-alerts. Up to ten web events would be offered annually to members with two options—a continuing professional education (CPE) option (with a discounted fee) or a free no-CPE option. The Center would offer a one-stop dedicated website with tools and resources and a member-to-member discussion forum to provide a framework for online networking with your peers. Single audit resources would not be included as they would continue to be included in the scope of the AICPA’s Governmental Audit Quality Center.
Please complete the member survey now being distributed by the AICPA. This Audit Quality Center would further enhance our education as CPAs and therefore our service to our clients.
NCACPA’s Not-for-Profit Committee’s goal is to keep all NCACPA members working with non-profits to stay informed about issues affecting them!
We’re committed to provide monthly blogs on current issues related to accounting pronouncements, tax updates, legislative issues, governmental audit issues and general information.