GASB Seeks Feedback on Revenue and Expense Recognition Models
In its recently issued Invitation to Comment, Revenue and Expense Recognition, the Governmental Accounting Standards Board (“GASB”) requests feedback on a new revenue and expense recognition model. This comprehensive model would help state and local governments address various transactions and improve their comparisons of transaction accounting and reporting. The model will also provide financial report users more insightful information for making decisions and evaluating accountability. The Invitation to Comment discusses the following two models: Exchange/Nonexchange Model: This model’s classification process is based on the current definition of exchange transactions. The model’s recognition process would rely on current guidance for nonexchange. Read More.
Phil Shechter Discusses Tax Reform with South Florida Legal Guide
In a recent interview with South Florida Legal Guide, Cherry Bekaert’s (“the Firm”) Phil Shechter, CPA, discusses the impact of the Tax Cuts and Jobs Act on both individual and business taxpayers. Shechter, the Firm’s National Leader of Litigation Support Services, provides general information on tax reform affecting individual tax rates, mortgage interest deductions, small businesses and pass-through entities. Read Phil’s full interview on the South Florida Legal Guide website. Additionally, if you seek guidance on forensic and litigation matters, Cherry Bekaert’s Forensic & Litigation Advisory Services team is ready to help.
Government Could Shut Down Again Thursday
With the current stopgap spending bill expiring in two days, Congress is scrambling to avoid another government shutdown. The House will vote today on another short-term continuing resolution that would fund the government until Thursday, March 22. Lawmakers continue to negotiate on a budget for the 2018 fiscal year, but disagreements exist regarding proposed increases in defense, non-defense, and infrastructure spending. Other budget disputes involve funding for Dreamers/Deferred Action for Childhood Arrivals (DACA), hurricane and wildfire emergencies, and community health centers. No agreements have been reached on such matters. Meanwhile, the White House wants anomalies (i.e., additional funding) included in. Read More.
Drug Companies Want FASB to Postpone Lease Standard
Nine pharmaceutical companies seek a one-year delay in the effective date of Accounting Standards Update No. 2016-02, Leases (Topic 842). In a letter to the Financial Accounting Standards Board (“FASB”), the companies said the new guidance for embedded lease agreements creates complications in implementing the standard before the 2019 effective date for public companies. Specifically, the pharmaceutical companies face issues with meeting the lease standard’s requirement of determining the fair value of an embedded lease contract. Drug makers regularly work with third-party manufacturers to make medicine or medicine ingredients. The contract could include an implicit asset that might be identified. Read More.
Guidance Issued on Unpaid Interns and FLSA Compliance
The Department of Labor (“DOL”) has introduced a new seven-factor test to help determine whether students and interns working at for-profit organizations qualify as employees eligible to receive minimum wage under the Fair Labor Standards Act (“FLSA”). An update from the previous version, the DOL’s new test is more beneficial to companies and examines the primary beneficiary of the employer-intern work relationship. The new guidance is also applicable to nonprofit organizations that offer interns stipends or other payments that are below the nation’s minimum wage ($7.25/hour).
College Endowments Highest in Three Years
According to their joint annual study, the National Association of College and University Business Officers (“NACUBO”) and Commonfund are reporting that college endowments are at a three-year high. For the fiscal year ending June 2017, the annual net endowment returns at colleges and universities averaged 12.2 percent. The percentage is a significant jump from the fiscal year 2016 average of -1.9 percent, and it marks the highest average achieved since the fiscal year 2014 (15.5 percent). Despite the turnaround, recent data reveals that the 10-year average annual return decreased from 5 percent in 2016 to 4.6 percent in 2017. More. Read More.