Tax Law May Lead to Changes in U.S. GAAP
At its upcoming meeting, FASB plans to discuss whether it needs to make a change to its accounting standard for income taxes to minimize the effect on reported earnings from the Tax Cuts and Jobs Act (TCJA). FASB also plans to discuss several implementation questions about applying the new tax law to its guidance for income tax accounting. If FASB agrees to make a change, it will have to float a proposal for public comment before making the final update to U.S. GAAP.
Proposed Changes to Lease Standard Offer Simpler Transition
Companies adopting FASB’s sweeping new lease standard would get a break on the transition process under a proposed change. FASB has agreed to propose the easier transition method after hearing complaints from businesses and professional groups that collecting data for everything from telephones to truck rentals was a significant undertaking. “As entities have started to implement the new lease requirements, many preparers have cited their plan to implement new systems and are observing some unanticipated costs and complexities associated with the modified retrospective transition method, particularly the comparative period reporting requirement,” FASB said. The proposal also offers relief to landlords and other lessors, allowing them to forego parsing out the price of so-called “common-area maintenance,” such as snow removal and security, from the value of the base rents they charge tenants.
William Duhnke, Kathleen Hamm Sworn in as Chairman, Member
On January 2, William Duhnke was sworn in as chairman of the PCAOB, replacing James Doty. Kathleen Hamm was also sworn in for a board seat at the same time. Duhnke, a longtime aide to Republican Senator Richard Shelby of Alabama, was the staff director and general counsel for the Senate Rules Committee, which Shelby chairs. “I have relied on Bill’s professional advice and leadership for 20 years, and I know he will be an asset as the board works to improve audit quality and promote public trust,” Shelby said in a December statement when Duhnke was appointed. Hamm, who specialized in cybersecurity issues at Promontory Financial Group, was also sworn in to a board seat. Previously, Hamm was a counselor at the Treasury Department. Three other new PCAOB members—Robert Brown, James Kaiser, and Duane DesParte—are expected to join the audit regulatory board shortly.