News Articles

Companies Off to a Slow Start on Lease Accounting Standard

Published on July 24, 2017

Many companies are lagging behind on preparations for the new lease accounting standard as they are still working on the revenue recognition standard, according to a pair of new surveys.

The first survey, by PricewaterhouseCoopers and CBRE Group, found that 23 percent of companies have yet to begin the initial adoption process of the leasing standard, while 47 percent of organizations that started implementation of the leasing standard reported the effort is bigger than they had expected. 

Many companies see the importance of the leasing standard, with 52 percent of the survey respondents indicating they are currently assessing the impact, and 25 percent have already started the implementation in process, according to PwC.

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How the New Revenue Standard May Affect a Company's Income Tax Accounting

Published on July 24, 2017

As companies prepare to adopt the new revenue recognition standard, they must consider the potential income tax accounting implications. Adoption of the standard may create new temporary differences or require the remeasurement of existing ones. It also may create process and system challenges if multiple “accounting bases” need to be maintained. Tax professionals should be actively involved in implementation discussions to make sure all implications are considered, regardless of whether the company has reached a conclusion on the pretax effects of adoption on financial reporting. 

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New Auditing Disclosure Requirement Takes Effect June 30

Published on July 24, 2017

The Public Company Accounting Oversight Board issued a reminder that the new requirement will be taking effect on June 30. Auditing firms will be required to disclose the names of other participating firms on Form AP, which firms registered with the PCAOB began filing with the PCAOB earlier this year. The initial requirement was for firms to disclose the name of the engagement partner who served on the audit for the most recent period. This week, the new disclosure requirement will begin to take effect, and for audit reports issued on or after June 30, 2017, firms will also need to disclose on Form AP information about other accounting firms that participated in the audit. 

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CFOs Losing Sleep Over Financial Reporting

Published on July 24, 2017

The financial reporting process keeps 97 percent of CFOs awake at night, according to a recent survey, with only 3 percent of the senior finance execs polled saying they don’t lose any sleep over their organization’s reporting processes or deadlines. 

The survey, by the financial reporting technology company, Workiva, and the business systems information provider, FSN, polled 977 international CFOs and senior finance professionals across more than 23 industries. 

Fifty percent of the respondents said reporting involved huge amounts of manual checking every time a change is made, while 60 percent of respondents said they spend too much time cleaning and manipulating data.

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Machine Learning, Artificial Intelligence - And The Future Of Accounting

Published on July 24, 2017

Take a deep breath. Robots are NOT going to replace all human accountants or bookkeepers (at least not anytime soon). 

White-collar workers who are part of the knowledge economy are beginning to experience what manual laborers have in the past when new technology made their jobs obsolete. Given the improvements we have recently seen in computing, many professionals fear for their future as machines threaten to overtake them. 

Rather than fear changes that machine learning will have on accounting tasks, it’s an opportunity for accounting professionals to be excited. The profession is going to become more interesting as repetitive tasks shift to machines. There will be changes, but those changes won’t completely eliminate the need for human accountants, they will just alter their contributions. 

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When Is It OK To Throw Out Old Tax Documents?

Published on June 21, 2017

After every tax season, it’s tempting to do some spring cleaning, which often includes a massive dump of recently filed tax data. 

While many firms have migrated to paperless records, many still grapple with the issue of tax record retention. One of the most confusing questions clients ask their accountants is: what do I do with my tax records and how long do I need to keep them?

Keep in mind that compliance includes federal (IRS) guidelines as well as state guidelines, as there is often a difference in the statute of limitations for both. For example, while the IRS has a three-year statute, the state of California has a four-year statute. Being caught throwing out 2013 tax data this year (even though it was filed in 2014) could be a real issue in the case of a state audit.

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Private-Company Relief From Accounting Consolidations Coming

Published on June 21, 2017

FASB in July will propose steps to make it easier for private companies to determine if they must consolidate onto their balance sheets a variable interest that they have in another entity that is under common control. 

Under current rules, variable interest entities (VIEs) are types of capitalized businesses established in some cases to maintain financial assets, or provide an investment with financing. Companies use VIEs to avoid putting the whole firm in jeopardy. Because the VIE doesn’t have enough capital to operate on its own, the company that has controlling interest must consolidate its financial statements to include the VIE. 

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Don't Be Held For Ransomware

Published on June 21, 2017

Five fundamental steps your company can follow to curb its chances of falling victim to a ransomware attack. 

If there’s a positive spin that can be placed on last month’s ransomware attacks, it’s that the topic of cybersecurity has finally emerged from the shadows and into the public eye. When 200,000 systems began to be infected across more than 150 countries on May 12, security became not just a matter for a few black-hat specialists and a wave of creative naming — from WannaCry to WanaCrypt0r and everything in between — it was suddenly everybody’s business. 

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Lease Accounting Standard Leaves Companies With Questions

Published on June 21, 2017

As companies get ready for the new lease accounting standard, they’re coming across a variety of complications and questions before the standard takes effect in the next few years. 

Deloitte recently issued a publication with answers to some of the frequently asked questions its clients have encountered. It noted that companies are exploring system solutions to help with the standard, including upgrades and entirely new systems. 

The new standard will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2018. For private companies, it will take effect for fiscal years beginning after Dec. 15, 2019, and for interim periods within fiscal years beginning after Dec. 15, 2020. 

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Companies Making Slow Progress on Revenue Recognition Standard

Published on June 21, 2017

Many businesses are slow-walking to implementing the revenue recognition standard, even as the effective date approaches next year. 

KPMG polled a group of financial executives during a webcast in April asking them about their progress on adopting the revenue recognition standard. Their responses are highlighted below:

Just over half of the financial executives polled by KPMG (52 percent) said they feel their company has sufficient internal controls over the transition to the new rev rec standard, but 11 percent admitted they don’t, while 37 percent were unsure. 

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