FinREC Proposes Industry-Specific Implementation Guidance for Revenue Standard
Five working drafts have been issued to help several industries implement Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board. The working drafts were published earlier this month and are as follows: Healthcare Industry: Health Care Entities Revenue Recognition Implementation Issue #8-10: Performance Obligations Telecommunications Industry: Telecommunications Revenue Recognition Implementation Issue #15-6: Impact of Enforceable Rights and Obligations on Contract Term Nonprofits Industry: Not-for-Profit Revenue Recognition Implementation Issue #11-5: Not-for-Profit Subscriptions and Membership Dues Time-Share Industry: Time-Share Revenue Recognition Implementation Issue #16-8: Allocating the Transaction Price & Transfer of Control and Time-Share Revenue Recognition Implementation Issue #16-10: Contract Costs Produced by the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”), the proposed guidance will become part of the next version of the Audit and Accounting Guide: Revenue Recognition. Comments on the working drafts are due February 1, 2018.
Topics: AICPA, American Institute of Certified Public Accountants "AICPA", FASB, Financial Accounting Standards Board "FASB", Financial Reporting Executive Committee "FinREC", healthcare, Nonprofits, Revenue From Contracts With Customers, Revenue Recognition, Telecommunications, Time-Share, Working Drafts
Report Recommends Improving Educational Quality at Colleges
The American Academy of Arts and Sciences has issued a study calling for improved educational quality to help college students excel in the 21st century. In its report, “The Future of Undergraduate Education, The Future of America,” the academy proposes a three-part strategy that ensures first-rate learning experiences, increased completion rates and reduced inequities among higher institutions, and controlled college expenses. While the academy believes technology will help boost educational quality, it anticipates some of its goals could take decades to accomplish. More on the American Academy of Arts and Sciences report is available on the Inside Higher Ed website.
Federal Student Aid Changes Proposed
The House Committee on Education and the Workforce has released a proposal to significantly change how the U.S. government distributes student aid. Announced last week as the Promoting Real Opportunity, Success and Prosperity through Education Reform Act, the plan involves deregulating and restricting oversight of portions of federal aid programs. Proposed changes include simplifying student aid options, eliminating the public service loan forgiveness program, and changing the federal work-study program by distributing money to colleges based on student need. Learn more about the proposed changes to federal student aid is available on the Inside Higher Ed website.
FAFSA Mobile App Announced
In its efforts to update the federal student aid system, the Department of Education is planning to make the Free Application for Federal Student Aid (“FAFSA”) available via a mobile application. Office of Federal Student Aid Chief Operating Officer A. Wayne Johnson said the app would make it easier for students to file for federal aid and provide a modernized experience throughout the application process. Johnson also noted that the app could perform many of the functions that student loan servicers can provide borrowers via the web and telephone. The app will likely arrive in April. More on the future FAFSA mobile app is available. Read More.
Tax Reform Could Impact Colleges’ Unrelated Business Income
If the proposed tax reform passes the Senate, colleges could lose their exemption from tax on certain income not connected to their academic mission. The proposal calls for expanding the unrelated business income tax and would include licensing royalties generated from the use of an institution’s name or logo. Colleges and universities with more than one unrelated business activity would also have to calculate the net income or loss from each activity separately and would not be able to offset income from one activity with loss from another. Several higher education groups believe the tax reporting changes could be burdensome. Read More.
Tax Court Says Country Club Must Pay UBTI Taxes
An Ohio country club may not deduct losses incurred from nonmember services. The Tax Court ruled that when Losantiville Country Club filed its annual Form 990-T, the organization did not show intent to profit from nonmember sales since its nonmember sales did not surpass the direct and indirect costs about those sales and thus it could not apply those losses to negate its taxable investment income. Losantiville had claimed losses against investment income earned from 2010 and 2012, resulting in no unrelated business taxable income (“UBTI”). More on the Tax Court ruling on Losantiville Country Club is available on the Journal of Accountancy website.