Accounting & Auditing Highlights for the Week Ending February 9, 2018


 

 

Accounting Highlights:   

 

Biofuels 

 

February 5: The bankruptcy of Philadelphia Energy Solutions LLC, the biggest refiner on the U.S. East Coast, has invigorated efforts to overhaul a 13-year-old federal program promoting biofuels that has drawn bitter criticism from the oil industry. Click here to see the full story (Subscription required). 

 

Tax Reform

 

February 6: If exploiting a tax loophole is as much an art as a science, then the tax planning profession is poised for a creative renaissance. And the new medium they're experimenting with? A 20 percent deduction for so-called pass-through businesses, whose income is taxed on firm-owners’ personal returns. Click here to see the full story (Subscription required). 

 

February 6: The new tax law's provisions on intangibles are proving to be among the most difficult to interpret of the code's new anti-base erosion measures, said Calum Dewar, co-leader, U.S. integrated global structuring team at PwC. Click here to see the full story (Subscription required). 

 

February 7: President Trump's corporate tax cuts are already having a big impact. Corporations are going to make more money. Corporate chiefs already are making plans for the windfall, with some detailing specific investments in infrastructure or technology along with their one-time charges and benefits. Click here to see the full story (Subscription required). 

 

February 8: The Dec. 22 enactment date of the U.S. tax overhaul can pose a daunting task for public companies trying to apply the new corporate tax rate for their deferred tax assets and deferred tax liabilities for the last nine days of 2017. Click here to see the full story (Subscription required). 

 

February 9: The new tax law's interest expense limitation rules will likely shift the incentive of where multinationals choose to keep their debt, but questions still remain. Click here to see the full story (Subscription required). 

 

Disclosure

 

February 6: Proxy adviser Institutional Shareholder Services Inc. is getting into the business of rating corporate reporting on issues such as climate change and human rights. The firm said it's now scoring companies on what they do, and don't, disclose on environmental and social topics. Click here to see the full story (Subscription required). 

 

Cybersecurity

 

February 6: Accountants and auditors must intensify efforts to warn investors of growing cybersecurity risks that can threaten companies across their entire systems, Catherine Ide, the Center for Audit Quality's professional practice managing director, said in a video interview. Click here to see the full story (Subscription required).  

 

https://players.brightcove.net/68290866001/HJCdfoas_default/index.html?videoId=5672714525001

 

Executive Compensation

 

February 6: The new tax law strengthened a provision that prevents public companies from getting a tax deduction for compensation to top executives in excess of $1 million—a change that practitioners and taxpayers are still grappling with. Click here to see the full story (Subscription required).  

 

Board of Directors

 

February 8: Corporate boards’ makeup is top issue for institutional investors this year, according to an Ernst & Young LLP survey. More than 80 percent of asset managers, public pension funds, and other investors told EY that making sure boards have the right mix of members, including women and experts in areas such as cybersecurity, should be a focus for directors in 2018. Click here to see the full story (Subscription required).  

 

Tax Exempt

 

February 8: Could colleges be required to report the losses from each portfolio they hold within an endowment or pension? That is a potential consequence for colleges, universities, and other tax-exempt organizations as practitioners wrestle with the new tax law. Click here to see the full story (Subscription required).  

 

Financial Technology

 

February 8: The European Union is hedging its bets on financial technologies such as cryptocurrencies and initial coin offerings that some see as leaving the door open to fraud, money laundering, and the like. Click here to see the full story (Subscription required).  

 

Revenue Recognition

 

February 9: Stock analysts and regulators will look to companies’ first-quarter financial releases to learn whether early signs of more “accounting failures” in revenue reporting, seen by a financial reporting research firm, come to fruition. Click here to see the full story (Subscription required).  

 

Accountants

 

February 9: Accountants were in high demand in January following the tax-cut legislation that took effect at the start of the year. Click here to see the full story (Subscription required).  

 

Exxon

 

February 9: Wall Street wants answers from Exxon Mobil Corp. For at least a decade, Exxon's top executives haven't taken questions from Wall Street analysts during quarterly conference calls. Instead, Exxon only fields its vice president for investor relations. Click here to see the full story (Subscription required).  

 

February 9: Exxon Mobil Corp. replaced 183 percent of last year's oil and natural gas production with new reserves, the best performance since 2010. The stock was at one point the day's sole gainer in the Dow Jones Industrial Average. Click here to see the full story (Subscription required).  

 

International Accounting Highlights:

 

Brazil

 

February 5: The Brazilian accounting unit of PricewaterhouseCoopers LLP reached a $50 million settlement of pension fund investor claims that auditors ignored red flags in a broad kickback and fraud scandal involving the state-run energy giant Petrobras. Click here to see the full story (Subscription required). 

 

United Kingdom

 

February 5: U.S. tax reform has given companies listed on the U.K.’s benchmark FTSE 100 stock index a total short-term financial boost of almost $2 billion, according to data compiled by Bloomberg Tax. Click here to see the full story (Subscription required). 

 

February 7: BP Plc has said the immediate cost of U.S. tax reform on it will be $859 million, about $640 million less than prior estimates, in a sign businesses continue to calculate the impact of the new law. Click here to see the full story (Subscription required). 

 

Accounting

 

February 5: Government agencies that lease office space and other assets could depict their contract arrangements more precisely by adopting new financial-reporting requirements as part of a proposed voluntary international standard. Click here to see the full story (Subscription required). 

 

Digital Currency

 

February 7: Mario Draghi said the European Central Bank's supervision arm is studying the risks that digital currencies may pose to banks’ balance sheets. “Right now digital currencies are not subject to a specific supervisory approach,” the ECB president said responding to lawmakers’ questions at the European Parliament. Click here to see the full story (Subscription required). 

 

Ukraine

 

February 9: The Ukraine has approved new fines for failure to comply with disclosure requirements for financial statements and consolidated financial reporting as part of a new law on auditing. Click here to see the full story (Subscription required). 

 

Composed and Compiled by Gery Brownholtz, Accounting Editor, Bloomberg BNA

 

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