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Tax News
Health bill exempts small employer HRAs from ACA group plan rules.
On December 13, President Obama signed into law H.R. 34, the 21st Century Cures Act. The act covers a wide-ranging group of nontax health subjects and includes a provision that, effective for tax years beginning after December 31, 2016, a qualified small employer health reimbursement arrangement (HRA) is not treated as a group health plan for income tax purposes and exempts small employers from the Affordable Care Act’s group plan rules.
SEC News
Bricker puts IFRS back on regulatory agenda.
The SEC is ready to resume its consideration of the use of IFRS in U.S. companies’ regulatory filings, SEC Chief Accountant Wes Bricker said on December 5 at the AICPA National Conference on SEC and PCAOB Developments in Washington, D.C., but he cannot say when a proposal will be issued. The SEC’s leadership is facing a transition, and it is not known how its next chair might view international standards. Moreover, U.S. companies have shown little interest in abandoning U.S. GAAP or incurring the extra cost of adding IFRS-based exhibits to their regulatory filings.
Stout: disclosures about material weaknesses in internal controls are improving.
The SEC says that companies are doing a better job identifying and disclosing material weaknesses in their internal controls over financial reporting before issuing a financial restatement. “We are beginning to see some improvement in this area,” said Kevin Stout, senior associate chief accountant in the SEC’s Office of the Chief Accountant. Still, regulators want companies to work on issuing the disclosures faster and providing more details about the problems once they are found.
FASB News
Next stage for disclosure rules to start with March roundtable.
FASB plans to move cautiously as it continues its overhaul of U.S. GAAP’s disclosure requirements in 2017. In the coming year, the board plans to hold a roundtable of the proposed changes to the disclosure rules for income taxes, inventory, fair value measurements, and pensions. FASB wants to make sure its decisions about the revised disclosure requirements are consistent throughout its body of standards, and it expects to take no definitive action before March.
Requests for lease accounting implementation guidance rejected.
On November 30, FASB said it will not amend its lease accounting standard to answer recent questions about its implementation. Board members are advising financial professionals to refer to the standard, issued in February, when they need to clear up an issue. The standard, which goes into effect in 2019 for public companies, requires those companies to report on their balance sheets their leased office space, storefronts, vehicles, and equipment as assets and the rent they owe on them as liabilities. “The guidance here is clear,” FASB member Marc Siegel said, “but people just don’t like the answer.”
PCAOB News
Rule to expand auditor’s report on course for completion by year-end.
Despite a request from Congressional leadership not to finalize pending rules during the Obama administration’s final days, the PCAOB, which has been very close to completing a long-running project to expand the auditor’s report and make it more useful for investors, is likely to wrap the project up before Christmas. “No one—I think—would think that this was hasty rulemaking,” PCAOB Chairman James Doty said during a brief interview at the board’s November 30 Standing Advisory Group (SAG) meeting in Washington. “This is a project that goes back years.”
IASB News
Tokar: International businesses should follow deliberations of FASB-sponsored revenue advisory panel.
Despite the IASB’s decision to end its active participation in the special group charged with resolving questions about implementing the landmark revenue recognition standard, it is still following FASB’s work with the Transition Resource Group (TRG)—and so should international businesses, IASB member Mary Tokar said on December 7. Speaking on a panel at the AICPA Conference on Current SEC and PCAOB Developments in Washington, D.C., Tokar responded to a moderator question about whether companies should look at the TRG’s discussions when they have questions about the global revenue recognition standard with a clear “Yes.” FASB and IASB published the sweeping, largely converged revenue recognition standards in May 2014 after a decade of work.
