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Tax News

AICPA loses challenge to IRS return preparer program.

A district court, on remand from the Court of Appeals for the District of Columbia, has rejected the AICPA’s challenge to the IRS’s Annual Filing Season Program (AFSP). In 2014, the AICPA brought suit against IRS, claiming that IRS lacks statutory authority to implement the AFSP, that it acted arbitrarily and capriciously in adopting the program, and that it failed to engage in required notice and comment rule making. The court decided that AICPA members have not suffered any injury as parties “regulated by” the AFSP, and said that the challenge failed the “zone-of-interests” test.

SEC News

Swaps dealers petition for changes to trade reporting rules.

The International Swaps and Derivatives Association, Inc. (ISDA), a trade group representing banks, brokers, and asset managers, wants the SEC to revise one of its Dodd-Frank Act swaps reporting rules. The ISDA asked the SEC to allow the Wall Street entities that collect swaps trading data, called swaps data reporting facilities (SDR), to delay releasing the data so as to prevent others from studying it and using it to crack the anonymity of other traders and copy their trading strategies. Without the change, the group fears that financial firms will suffer a massive disruption to the way they trade swaps.

FASB News

Comment letters on restricted cash proposal mixed.

FASB and its Emerging Issues Task Force (EITF) are expected to review the comments on a proposal to streamline the classification and presentation of restricted balances in cash flow statements when they meet on September 22. The proposal calls for the statement of cash flows to explain the change during a reporting period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The feedback in the comment letters, however, was mixed. Some audit firms, businesses, and industry groups said the changes will be an improvement, while others said the changes will cause more problems than they solve.

A district court rejected the AICPA’s challenge to the IRS’s Annual Filing Season Program.

Limited proposal aims to clarify notfor-profit questions about consolidated reporting.

On August 3, FASB released for comment a limited proposal to clarify when a not-for-profit organization that is a general partner should consolidate, or report on its balance sheet, a for-profit limited partnership or similar entity. FASB issued the proposal because of questions regarding Accounting Standards Update (ASU) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. Advocates said that ASU 2015-02 was not clear enough on when a foundation or other organization should report on its balance sheet the holdings of a for-profit limited partnership. Comments are due by October 3.

PCAOB News

Comment letters criticize proposal on lead auditors’ supervisory responsibilities.

The major accounting firms used their comment letters to the PCAOB to request that more work be done on a rule proposal to tighten standards related to a lead auditor’s supervision of other accounting firms participating in a client audit. “We are concerned that, while placing additional supervisory responsibility on the lead auditor, the proposals seem to have less focus on the responsibility of the other auditor,” one firm wrote. “It is the other auditors who are in best position to supervise and execute on the day-to-day responsibilities of the portion of the audit on which they are reporting.”

IASB News

International regulators seek role in IASB decisions.

On August 2, the IFRS Foundation Monitoring Board said it is seeking to establish a role in the foundation’s supervision of the IASB. “The Monitoring Board plans to develop a view and possibly confer with the [IFRS Foundation] trustees as appropriate on accounting matters of broad public interest for consideration by the IASB,” the board said in a work plan document. “Such matters could include, in particular, effects analysis in setting and revising accounting standards, as well as consistent implementation of new accounting standards related to revenue recognition and financial instruments.”