Simplified Transition to Lease Standard Offered for Land Easements
Thanks to the Financial Accounting Standards Board’s (“FASB”) latest Accounting Standards Update (“ASU”), companies with land easements contracts should have an easier time applying the board’s lease standard. ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, offers a simplified transition to ASU No. 2016-02, Leases (Topic 842), for businesses with the right to use another entity’s land for purposes such as running pipelines or burying transmission wires. The amendments ensure that businesses can successfully transition to ASU No. 2016-02 without impacting the information investors receive about land easements. The FASB addresses the issue. Read More.
FASB Receives Support for Proposed Tax Reform Guidance
Numerous banking institutions, insurers, and financial trade organizations support the Financial Accounting Standards Board’s (“FASB”) proposed response to the Tax Cuts and Jobs Act. In comment letters on Proposed Accounting Standards Update (“ASU”) No. 2018-210, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income, groups like the American Bankers Association urged the FASB to approve its proposed amendment. Proposed ASU No. 2018-210 aims to reduce the accounting effects of complying with the new tax law and simplify financial statements for investors. The FASB released the proposal after banks and insurance companies raised concerns over certain requirements introduced by the Tax Cuts and Jobs Act. Under. Read More.
Topics: corporate income tax rate, Deferred Taxes, FASB, Financial Accounting Standards Board "FASB", Other Comprehensive Income, Proposed Accounting Standards Update, Tax Cuts and Jobs Act, Tax Reform
Private Company Advocacy Group Seeks Additional Revenue Standard Guidance
As private companies prepare to comply next year with the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard, the American Institute of Certified Public Accountants’ Private Companies Practice Section (“PCPS”) seeks relief from the accounting changes. In its January 17 letter to the FASB, the PCPS requested permission for private companies to use less constricting interpretations for certain aspects of FASB Accounting Standards Codification 606, Revenue From Contracts With Customers. The PCPS believes the FASB’s landmark standard impacts private companies by requiring strong consideration of recognition and measurement disparities and disclosure differences for specific conduit debt obligors. Accordingly, the PCPS. 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.
FASB Issues Staff Q&A Documents on Tax Reform
Four recently issued Staff Q&A documents from the Financial Accounting Standards Board (“FASB”) address implementation topics associated with the Tax Cuts and Jobs Act. The documents follow the January 11 issuance of a Staff Q&A that addresses whether private entities and nonprofits can apply Staff Accounting Bulletin No. 118. The new Staff Q&As are as follows and are accessible on the FASB’s Accounting for the Tax Cuts and Jobs Act website: Whether to Discount the Tax Liability on the Deemed Repatriation Whether to Discount Alternative Minimum Tax Credits That Become Refundable Accounting for the Base Erosion Anti-Abuse Tax Accounting for Global Intangible Low-Taxed Income
FASB Proposes Tax Cuts and Jobs Act Guidance
A proposed Accounting Standards Update has been issued reflecting provisions resulting from the Tax Cuts and Jobs Act. The Financial Accounting Standards Board’s (“FASB”) proposal addresses concerns over present Generally Accepted Accounting Principles requiring companies to amend deferred tax liabilities and assets after changes to tax laws or rates. The proposed amendments are expected to reduce the stranded tax effects related to the corporate income tax rate change and improve the helpfulness of information shared with financial statement users. According to Proposed Accounting Standards Update No. 2018-210, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects. Read More.