Accounting & Auditing Highlights Week Ending December 29, 2017


Accounting Highlights:   

Securities and Exchange Commission

December 27: U.S. publicly traded companies should provide reasonable estimates of future financial reporting impacts of tax reform in their fourth quarter statements, SEC accounting staff said. Among the greatest uncertainties of the new tax law is estimating deferred tax assets (DTA) and deferred tax liabilities (DTL). Click here to see the full story (Subscription required).   

December 27: Think-tank scholar Hester Peirce and law school professor Robert Jackson secured Senate confirmation for seats on the SEC, filling out the five-member commission for the first time since 2015. Click here to see the full story (Subscription required). 

Tax Reform

December 22: For a road map of where to find key provisions in the new tax law, and comparisons with the previous tax code, read Bloomberg Tax's analysis.

December 26: Many U.S. companies will have to scramble to make potentially difficult adjustments to income tax amounts they put on their year-end and fourth-quarter reports because President Trump signed the tax overhaul bill prior to the New Year. Financial reporting changes could include big write-downs or write-ups in deferred tax assets and deferred tax liabilities, which could affect corporate earnings. Click here to see the full story (Subscription required). 

December 27: The new tax law is a mixed bag for corporations with high debt-to-equity ratios and large losses. The measure (Pub. L. No. 115-97), would restrict net operating loss and interest-related deductions, while allowing companies to carry over those deductions indefinitely and replenish their coffers with offshore cash at a low repatriation rate. Click here to see the full story (Subscription required). 

December 27: It turns out the new tax law will be anything but simple for many affluent Americans, who are now inundating their accountants for advice. “They made it a lot more complex for a lot of people,” said Jody Padar, chief executive officer of New Vision CPA Group. Click here to see the full story (Subscription required).   

December 28: The Financial Accounting Standards Board hopes to advance by mid-January a proposed answer to questions from banks and insurers on the treatment of deferred taxes spurred by changes in the new tax law, FASB Chairman Russell Golden told Bloomberg Tax. Click here to see the full story (Subscription required).   

Digital Currency

December 28: The sweeping GOP tax bill includes a provision that would increase tax liabilities for investors looking to exchange bitcoin, ether, and other virtual currencies that have soared in value. The legislation would eliminate the ability of investors to defer taxes when they exchange one virtual currency for another if the original currency has appreciated in price. Click here to see the full story (Subscription required).   

Government

December 27: The $1 million price adjustment the government seeks from Boeing under a defense aircraft contract is both a breach of contract and an illegal exaction, according to a complaint filed by the contractor. Click here to see the full story (Subscription required).   

Disclosures

December 27: While we were all watching the tax reform process unfold on Capitol Hill, the calendar of corporate governance kept moving forward, bringing a number of executive compensation issues into sharper focus for 2018. In preparation for the upcoming proxy season, guidelines and voting policies have been released by various proxy adviser firms and influencers, helping to inform institutional investors and other shareholders on vital corporate governance matters. Click here to see the full story (Subscription required).   

Financial Technology

December 29: More community banks and credit unions are likely to partner with financial technology firms in 2018 as they look to keep pace with changing technologies, demographics, and competition. Click here to see the full story (Subscription required).   

Confidentiality

December 29: As we look ahead to 2018, we should reflect on the professional responsibilities that differentiate CPAs from the rest of the pack. CPAs must maintain confidentiality of the client's information, be competent, exercise due care, and act with integrity, objectivity, and sometimes independence. Click here to see the full story (Subscription required).   

International Accounting Highlights:

United Kingdom

December 29: The U.K. has just over a year before it is expected to leave the European Union. For the countries tax authority, though, there is a much closer deadline. The end of March will mark the date that senior officials set the government to finalize its post-Brexit terms on border taxes with the EU. Click here to see the full story (Subscription required).   

International Auditing Highlights:

Fraud

December 26: Canada's top court has held accounting firm Deloitte LLP liable for failing to find fraud in audits of a now-bankrupt entertainment firm, but cut the liability by more than half. The ruling confirms that professional services companies are liable for economic losses resulting from their work, although the extent of liability depends on the nature of the work, Toronto lawyer Andrea Laing told Bloomberg Tax. Click here to see the full story (Subscription required).   

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

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