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IRS issues guidance for employee benefit plans in wake of Obergefell decision.
The IRS has provided guidance on how the Supreme Court’s ruling in Obergefell v. Hodges, the case that struck down a four-state same-sex marriage ban, will affect qualified retirement, health, and welfare plans. The IRS noted that, while that decision requires states to recognize same-sex marriages performed in other states, these marriages have already been recognized for federal tax law purposes under Windsor and the IRS’s post-Windsor guidance; therefore, there won’t be much of an effect. But the IRS stated that some plan sponsors may alter aspects of their employee benefit plans, or how their plans are administered, in response to Obergefell. In addition, some plan sponsors have asked for clarification of the application of Obergefell to certain changes to employee benefit plans, such as a discretionary expansion of benefits that is not required under the federal tax rules.
White backs plan for supplemental IFRS information.
SEC Chair Mary Jo White said that a plan to let U.S. companies provide IFRS financial information as a voluntary supplement to their U.S. GAAP financial statements “has the potential to be a useful next step” in the increased use of the global standards within the United States. White’s support increases the likelihood that this idea—something SEC Chief Accountant James Schnurr has been promoting for the past year—will move forward. The SEC is expected to issue a proposal on IFRS in the next few months.
Proposal seeks to update disclosure rules for fair value measurements.
On December 3, 2015, FASB released a proposal aimed at improving the information that businesses disclose about the estimates and assumptions used to determine the fair values of assets and liabilities. The proposal eliminates some existing requirements, changes others, and adds three new requirements. “The objective and primary focus of the disclosure framework project are to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by GAAP that is most important to users of each entity’s financial statements,” FASB wrote in its basis for conclusions. Comments are due by February 29.
Former Bank of America CFO tapped to head Financial Accounting Foundation.
Charles H. Noski, retired vice chair of Bank of America Corp., will serve as the next chairman of the Financial Accounting Foundation (FAF), the parent organization of FASB and GASB. Noski served as chair of FASB’s main advisory panel, the Financial Accounting Standards Advisory Council (FASAC), from 2012 to 2013. “As a board member and audit committee chair for major corporations, Chuck Noski will bring to the board of trustees a deep appreciation of the role that high-quality accounting standards play in promoting investor confidence in companies and capital markets,” Noski’s predecessor Jeffrey J. Diermeier said in a statement. “That, coupled with his experience as a chief financial officer and independent auditor, gives Chuck an important perspective on the concerns of all of our stakeholders.”
Lead partner disclosure rule poised for final status.
The PCAOB is planning to finalize a rule requiring audit firms to disclose the name of the lead partner in an audit. PCAOB Chair James R. Doty said the rule will require audit firms to disclose the name of the engagement partner and the other participating firms on a new Form AP.
CAQ offers plan for auditing estimates.
As the PCAOB considers updating its guidance for auditors’ responsibilities for accounting estimates, the major audit firms, through the Center for Audit Quality (CAQ), have suggested an approach to amend the guidance that borrows from the standards of the International Auditing and Assurance Standards Board (IAASB). “In addition to considering conditions specific to accounting estimates in the auditor’s risk assessment, supplemental guidance would serve to further clarify the auditor’s expected performance in assessing risk and appropriately designing audit procedures to obtain sufficient relevant audit evidence,” the CAQ said in a comment letter to the PCAOB.
Proposal aims to clarify guidance for developed property.
The IASB has released a proposal that intends to help companies and other organizations classify property that has been under construction or development. The proposal would amend existing guidance to clarify the requirements for classifying property as inventory or investment property after its use has changed. Comments are due by March 18, 2016.