Accounting & Auditing Highlights for the Week Ending May 18, 2018


U.S. Accounting Highlights:

Leasing

May 18: Software and data collection were the biggest challenges that Microsoft Corp. and Bristol-Myers Squibb Co. faced as the two companies each began planning to report lease obligations on their balance sheets for the first time. Click here to read the full story. (Subscription required.)

Blockchain

May 18: A lack of explicit accounting rules and regulatory structure is hindering corporate adoption of digital assets in the U.S., panelists at a blockchain conference warned. Click here to read the full story. (Subscription required.)

Tax Reform

May 14: U.S. companies adopting new financial accounting standards for revenue recognition this year will be able to use those same methods to prepare their federal income taxes, according to guidance from the IRS. Click here to read the full story. (Subscription required.)

May 15: A banned and complex rule that would require companies to consider a transaction's prior history in accounting for its tax effects is being reconsidered by U.S. accounting rulemakers in response to federal corporate tax rate changes. Click here to read the full story. (Subscription required.)

May 15: Taxpayers can expect proposed regulations for the tax law's full expensing provision in less than two months. Click here to read the full story. (Subscription required.)

May 15: The effects of the tax law's limitation on companies’ deduction of interest expenses bleed into a litany of other code sections and jurisdictions, making it a challenge for IRS officials as they craft guidance—but that guidance is coming soon, an official said. Click here to read the full story. (Subscription required.)

May 15: A change to the way “intangible” property is defined in the tax code will have “significant consequences” in preventing companies from arguing they can transfer some kinds of property without accounting for its value, a U.S. Treasury official said. Click here to read the full story. (Subscription required.)

May 15: The government said it is working on regulations that could help U.S. multinationals take better advantage of the foreign tax credit for a new tax on income from intangible assets—such as patents and trademarks—and other types of more tangible assets. Click here to read the full story. (Subscription required.)

May 18: The American Institute of CPAs asks the IRS to give partners and partnerships more choices on applying audit adjustments to tax attributes such as the tax basis and book value of a partnership's property; and Chinese companies have questions about paying the new repatriation tax because of difficulties transferring money out of the country. Click here to read the full story. (Subscription required.)

Cryptocurrency

May 14: Cryptocurrency tax noncompliance is likely costing the IRS billions in revenue, an attorney said, pointing to recent research. Click here to read the full story. (Subscription required.)

Sustainability

May 18: Amid growing demand for responsible investing, often lost in the discussion of sustainability disclosures is the investment management industry. Click here to read the full Insight on the role of asset managers in the fight against climate change. (Subscription required.)

FASB

May 15: One of the newest members of the board that sets U.S. accounting standards is stepping down May 31, partway through a five-year term. Click here to read the full story. (Subscription required.)

SEC

May 17: A 2017 U.S. Supreme Court decision clarifying how long the SEC has to recover profits from fraudsters has already cost $800 million, the agency says. Click here to read the full story. (Subscription required.)

Auditing Highlights

New Audit Reporting Model

May 15: Some of the largest public companies in the U.S. and their auditors are set to test this year a new audit report that will detail factors that could have a significant impact on their financial statements or involve complex audit decisions. Click here to read the full story. (Subscription required.)

Inspections

May 16: Ernst & Young LLP's practice in Canada fell short of meeting auditing standards on a pair of audits the firm completed, and a third it was involved in, according to the firm's most recent inspection by the U.S. regulator. Click here to read the full report. (Subscription required.)

Audit Standards

May 14: Symantec Corp.’s audit committee is looking into “concerns raised by a former employee.” It has retained outside counsel, alerted the Securities and Exchange Commission, and delayed the filing of its annual report over the internal investigation. Click here to read the full story. (Subscription required.)

International Accounting Highlights:

UK

May 17: Carillion Plc deceived lenders and investors about its debt levels and was enabled by “complacent” auditors who failed to challenge its “aggressive” accounting, according to a U.K. Parliament report. Click here to read the full story. (Subscription required.)

Canada

May 16: Ernst & Young LLP's practice in Canada fell short of meeting auditing standards on a pair of audits the firm completed, and a third it was involved in, according to the firm's most recent inspection by the U.S. regulator. Click here to read the full report. (Subscription required.)

Poland

May 16: The risk of audits may grow for companies with significant debt financing costs or large charges for inter-company intangible services if proposed changes to Poland's corporate income tax return take effect, according to local tax practitioners. Click here to read the full story. (Subscription required.)

Sweden

May 17: The Swedish Tax Authority will appeal a preliminary ruling from the country's Council for Advance Tax Rulings, which said bitcoin is subject to capital gains tax. Click here to read the full story. (Subscription required.)

Ukraine

May 14:  The Ukrainian authorities warned businesses that failure to keep their original financial statements and records for up to seven years can result in fines, although only modest ones of just $19 for the first offense and $38 for each repeat violation. Click here to read the full story. (Subscription required.)

Composed and compiled by Amanda Iacone, accounting reporter for Bloomberg Tax.

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