Accounting & Auditing Highlights Week Ending January 12, 2017

Accounting Highlights:   

Tax Reform  

January 8: Multinational companies could be rethinking some plans for foreign restructuring after Congress moved to treat certain types of overseas corporate value as intangibles under the new tax law. That corporate value—known as “foreign goodwill” and “going concern"—is the residual value of a company after all other pieces of the business have been valued. Click here to see the full story (Subscription required). 

January 11: Banks, insurers and others will get an accounting rule change to eliminate an inadvertent hit to their earnings from applying income tax accounting to the corporate tax reduction rate under the new tax law (Pub. L. No. 115-97. Click here to see the full story (Subscription required). 

January 11: U.S. financial companies may feel the bite of Internal Revenue Service guidance responding to a new tax law provision requiring multinationals to bring overseas money home. Multinational companies will have to include derivative financial instruments in the earnings and profits they repatriate. That could spell difficulties for the financial industry, practitioners told Bloomberg Tax. Click here to see the full story (Subscription required). 

January 12: Companies that stockpiled trillions of dollars offshore free of U.S. income tax may get one last break before paying up—provided their fiscal years don't follow the calendar year. A timing quirk in the tax overhaul may be good news for companies such as Apple Inc., Microsoft Corp. and Cisco Systems Inc., all of which began their fiscal years before Jan. 1. Click here to see the full story (Subscription required). 

Pass-Through Entities  

January 8: Congress should delay the centralized partnership audit regime, which became effective Jan. 1, for one year to give the IRS and Treasury Department more time to guide taxpayers, the American Institute of CPAs said, renewing a request the group made in June. Click here to see the full story (Subscription required). 

January 9: Tax professionals don't know how many partnerships, limited liability companies, and S corporations will qualify for the lower taxes intended for pass-through businesses in the new tax law. Guidance about who does—and doesn't—qualify for the law's pass-through deduction is at the top of tax lawyers’ and accountants’ wish lists for advice from the IRS. Click here to see the full story (Subscription required). 


January 8: Companies have formally received a proposal from the FASB for using a lease accounting implementation option intended to provide simplicity and cost relief. The proposal was issued to amend transition requirements under the new leases rules so companies can choose to opt out of having to restate the effects of the new rules, as if they were applied to earlier reporting periods. Click here to see the full story (Subscription required). 

Justice Department  

January 8: Rudy Giuliani's law partner was named as top federal prosecutor in Manhattan, taking charge of an office that investigates Wall Street, international bribery, and political corruption. Geoffrey Berman was among 17 lawyers selected as interim U.S. Attorneys, putting him in position to lead an office that has overseen some of the most significant investigations in the nation's history. Click here to see the full story (Subscription required).   


January 9: Fair value and tax reform are joining revenue recognition, leasing, and credit losses as the hot accounting issues for 2018, Jim Dolinar, chairman of the Financial Reporting Executive Committee (FinREC) told Bloomberg Tax. “Fair value continues to be a challenge to a number of people,” Dolinar said. Click here to see the full story (Subscription required). 


January 10: Not-for-profit hospitals, museums, libraries, and charities with debt, taxes, and bonds held by the public will have to apply revenue recognition rules this year like public companies do. Under today's accounting rules, nonprofits that issued tax exempt debt held by the public are considered public entities in financial reporting. Click here to see the full story (Subscription required). 


January 10: After years of struggling to prevent their advice from being ignored or overridden, chief compliance officers face a new challenge with boards, already facing a compliance overload, believing the Trump administration's new deregulatory push will ease compliance burdens. Click here to see the full story (Subscription required). 


January 10: For years, the owners of an unprofitable iced-tea company watched their stock tumble. Last month, Long Island Iced Tea Corp., now called Long Blockchain Corp., saw it almost triple in a day after a simple name change. Click here to see the full story (Subscription required). 

International Accounting Highlights:

Global Tax Reports

January 12: U.K. multinational companies have started to file their first global tax reports, in a move that will provide governments with unprecedented details on the business’ financial data.

A U.K. tax authority spokesman told Bloomberg Tax that companies have “successfully” begun filing their first reports ahead of the first deadline at the end of 2017. Click here to see the full story (Subscription required). 

International Developments

January 12: Russian companies have to reflect in their financial statements the effect that insurance contracts have on the entity's financial position, financial performance, and cash flows. The country approved international financial reporting standards on insurance contracts (IFRS 17) and amendments to other international standards. Click here to see the full story (Subscription required). 

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

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