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Bipartisan tax extenders introduced in Senate.
On February 28, Senate Finance Committee leaders introduced legislation to retroactively extend tax provisions that expired at the end of 2017 and 2018. The measure, introduced by Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.), would extend 29 expired tax provisions through the end of 2019 at their current levels. These temporary tax provisions are generally referred to as “extenders” because they are routinely extended by Congress on a one- or two-year basis; 26 of these provisions expired at the end of 2017, and 3 others expired at the end of 2018. Included in these extenders are the nonbusiness energy property credit, the alternative fuel cell motor vehicle credit, and the energy-efficient home credit.
Modifications coming to definition of “collections” held by museums.
FASB has unanimously voted to finalize a proposal that aligns the definition of “collections” with one used by museums. The new definition would reduce differences in financial reporting for items such as priceless artwork and historical treasures, and could reduce complexity and cost. The rules would apply to any entity that maintains collections and chooses to apply U.S. GAAP, FASB said. The new definition will go into effect for annual periods after December 15, 2019, and for interim periods within annual periods beginning after December 15, 2020.
Proposal would clarify accounting rules for share-based payments to customers.
On March 4, FASB published a proposal to reduce confusion related to how companies report share-based payments made to customers. The proposed accounting change clarifies that companies would use stock compensation accounting rules to measure and classify share-based payments made to customers. Accountants who have been analogizing to new “non-cash consideration” guidance under revenue accounting rules should no longer do so, according to the proposal. If finalized, the changes would provide financial reporting consistency, which is important for providing comparable information to investors. Comments on the proposal are due by April 18.
ASB discusses definition of materiality.
The AICPA’s Auditing Standards Board (ASB) conducted a telephone meeting in March to discuss how its definition of materiality will be amended. The supplemental meeting was scheduled after the board, at its regular meeting in January 2019, approved a narrow project to align its definition of materiality with that used by other regulators and standards setters in the United States. “In essence, the United States Supreme Court, the SEC, and the PCAOB define an omission or misstatement as material if there is a substantial likelihood that a reasonable person would consider it important,” according to a discussion paper prepared in advance of the March 8 meeting. “The IASB, IAASB, and ASB definition define an omission or misstatement as material if it could reasonably be expected to influence the economic decision of users taken on the basis of the financial statements.” The ASB is planning to vote on issuing an exposure draft at its next regular meeting in May.
Proposed guide addresses implementation questions on lease accounting.
The GASB has issued a draft implementation guide to help state and local governments apply the new standard on accounting for leases. The guide, ED 3-24, provides answers to questions about GASB Statement 87, Leases, which was published in June 2017. The standard classifies leases as financing arrangements that give the customer the right to use the leased asset and requires governments that are lessees to report a liability for the contract and an intangible asset representing the right to use the item being leased. The standard becomes effective for financial reporting periods that begin after December 15, 2019, but can be adopted before the effective date.