At the 2011 A&A conference, Suzan C. Dennis, CPA, had a great comment. I’ll summarize and expand her idea:
If you have a flash of brilliant insight on a new and creative way to account for some issue, you may have a bad idea.
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That insightful flash of creative accounting? Maybe not a good thing.Read More »
Here are a few reminders as you are auditing December 2011 financial statements. These comments will be very summarized. They’re in plain English instead of formal accountantese. If you see something here that applies to your clients or is brand new information for you, check out the authoritative literature.
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Oops! Amazing the trivia one can learn when reading the Not-for-profit audit risk alert. Realized the following idea isn’t the only thing I missed after reading the risk alert. (Aha, the point of constant learning is to figure out what you missed and fill in the gaps!)
TIS 5250.15 says that NPOs without any uncertain tax positions under FIN 48 still have to disclose open tax years in the same way as for-profit organizations. That TIS is not available on-line so I can’t provide a link to an authoritative source. And yes, I know that FIN 48 is actually now found in ASC 740-10, but FIN 48 registers in my brain easier that ASC 740-10.
So, if you have an NPO client, there should be something along the lines of the following comment from ASC 740-10-55-217: …
NPOs should disclose open tax years – TIS 5250.15Read More »
(title of post changed from AICPA is not abused to AICPA is not amused. Sorry!)
I mentioned earlier that the FAF, parent of FASB, wants to set up a group that would carve out portions of GAAP that did not apply to private companies. Problem with this deal is that all changes would have to be approved by FASB. That means PCSIC would be a subsidiary or subcommittee of FASB.
The AICPA is not amused.
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AICPA is not amused with ‘little gaap’ body being a subsidiary of FASBRead More »
The AICPA released a white paper on issues that NPOs encounter when applying fair value accounting under ASC 820.
The announcement is here, and has the following summary:
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Here’s the path the Financial Accounting Foundation has chosen for addressing the big GAAP/little GAAP issue, as announced on October 4:
Establishing a new body, under the oversight of the FAF, to identify standards that require modification and to vote on specific proposed exceptions or modifications that would then be subject to ratification by the FASB and submitted to the public for comment
The FAF would create a new entity under its supervision, the Private Company Standards Improvement Council (PCSIC). Shall we call it Pic-sic? …
Looks like ‘little GAAP’ will be closer to ‘slightly-less-than-big-GAAP’Read More »
John Hufnagle, of Hayacasa consulting blog, has a good summary of the new ASU addressing a simplified method of assessing goodwill impairment at Goodwill Impairment Test.
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Good summary of ASU 2011-18, Goodwill Impairment Test, and a commentaryRead More »
Perhaps it is because I’m attentive to the issue, but it seems doubts are spreading about the wisdom of adopting IFRS.
Rueters had this story: Analysis: Doubts emerge over U.S. move to global accounting
Key thread in this article: there isn’t, and won’t be, a uniform standard for all countries.
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IASB and FASB announced they will release another exposure draft on the major changes to lease accounting. The volume of revisions they plan to make to the original exposure draft are significant enough that they want to another round of discussion. There announced timeframe is to finish their deliberations in the third quarter of 2011 with another exposure draft shortly after that.
Don’t expect a change in the basic concept that all leases are going to be brought onto the balance sheet. The news release makes that quite clear:
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IFRS hasn’t achieved consistency in financial reporting in countries where it has been implemented, even amongst firms in the same industry.
Consistency between countries is low because:
IFRS has been filled with carve-outs, special deals, exceptions, and time-freezes; in short, countries are adopting their own national brands of IFRS
In addition, principles-based accounting hasn’t cleared up the off-balance-sheet financing issue where IFRS has been adopted.
These are some of the secondary criticisms that Professors Anthony Catanach and Edward Ketz raise in their post, IFRS is for Criminals.
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Another critique of IFRS – it requires honest judgmentRead More »
In a long post in advance of the roundtable held this week by the SEC on IRFS, Professor Tom Selling gives lots of inside-baseball info on the roundtable. See the post No News from the SEC on its IFRS Roundtable is Bad News
Later in the article he raises some superb questions he would like to see asked, but doubts will be discussed. Some examples:
Why are we doing this?
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A few troublesome questions that haven’t been asked about IFRSRead More »
That is my (biased) summary of the reasons to adopt IFRS, as explained in an article by Professor Christian Leuz, Accountants of the World Unite!: Business Class
Having already taken an implied position that IFRS is not a good thing for the United States, I guess I will jump in further.
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FASB Action Alert describing the board decision to drop the straight line amortization of “other than financing” lease liabilities is described here.
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Current plan – short term leases amortized on interest method (topic 840)Read More »
John Hufnagle has this month’s update on the FASB’s thinking on how to revise lease accounting. In his post, Lease Accounting (ASC 840) – More Changes to Proposal, he explains the FASB is now thinking of requiring the interest method for amortizing other-than-financing leases (think what is currently an operating lease). That would be a change from their previous thought of allowing a straight line amortization of the liability.
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Changes to new lease accounting (topic 840)– May editionRead More »
Just launched the first in a series of cartoons at my other blog, Nonprofit Update.
The series will tell the story of internal controls in a local church. Click here to see the video.