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Important Revenue Recognition Questions as the Private Company Deadline Draws Closer
Posted by David Lewin on Tue, Jun 26, 2018 @ 04:13 PM

As the effective date of the new revenue standard draws nearer and implementation becomes imminent for non-public entities within its scope, management should be aware of some important areas that their auditors will be focusing on in the upcoming months.

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Topics: private companies, private company, FASB, Revenue recognition, David Lewin, Financial Accounting Standards Board, ASC Topic 606, Revenue from Contracts with Customers

Was a Business Acquired? Updates to the Definition of a Business
Posted by Peter Gold on Mon, Jun 25, 2018 @ 06:15 PM

Recently, the Financial Accounting Standards Board (FASB) released guidance clarifying the definition of a business. Accounting standards update (ASU) 2017-01, Business Combinations (Topic 805) Clarifying the Definition (ASU 2017-01) seeks to narrow the circumstances where a set of assets and activities qualifies as a business. The changes are anticipated to result in more transactions being accounted for as asset acquisitions instead of business combinations.

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Topics: FASB, Financial Accounting Standards Board, definition of a business, Peter Gold

Online Retailers Reeling as Supreme Court Overturns Quill in Landmark Sales Tax Ruling
Posted by Chrissy Hammond on Fri, Jun 22, 2018 @ 12:42 PM

Fifty years of sales tax policy in the United States is coming to an end. In South Dakota v. Wayfair Inc. (Wayfair), the U.S. Supreme Court on June 21 ruled in a 5-4 decision that the physical presence standard for sales tax collection is no longer the law of the land. Retailers across the nation must prepare for a profound increase in sales tax collection responsibilities as states adapt their laws to this new judicial standard.

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Topics: Sales Tax, nexus, tax nexus, ecommerce, physical presence standard, Wayfair

Many LLCs May Have Invalid S Elections and Not Know It
Posted by Leigh Nali on Fri, Jun 22, 2018 @ 10:20 AM

Limited Liability Companies (LLCs) emerged as the preferred form of doing business many years ago. In addition to state law advantages and liability protection, LLCs are flexible in their tax status for federal income tax purposes. When businesses that are organized as LLCs elect to be taxed as S corporations they follow a simple procedure that is based on eligibility criteria. However, an oft-overlooked foot fault may leave many LLCs surprised to find that they were not eligible to be S corporations. This would have disastrous tax consequences and a great number of unsuspecting LLCs may be in this predicament without knowing it.

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Topics: IRS, Tax Cuts and Jobs Act, TCJA, Leigh Nali, LLCs, Limited Liability Companies, S Elections

How Much Longer Can I Avoid GDPR Compliance?
Posted by Michelle White on Thu, Jun 21, 2018 @ 03:54 PM

May 25 has passed and no one has knocked on my door asking about my GDPR compliance. In fact, I know of many companies worldwide who have yet to begin working towards GDPR compliance. So if nothing has happened to them or me, why should I care now?

This is the question on the minds of many companies all over the world. Leading up to the implementation of the regulation, the General Data Protection Regulation (GDPR) loomed with the threat of hefty fines, but now that it is law, we have yet to hear about significant action being taken against non-compliant companies (as of the publication date of this article). While some of these companies are in a lower-risk scenario as they do not have European Union (EU)-based employees nor do they directly market to EU persons, anyone with personally identifiable information (PII) of EU-based individuals has some level of risk exposure.

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Topics: Michelle White, Privacy Laws, GDPR, General Data Protection Regulation, EU GDPR

Simplification? An Examination of Readily Determinable Fair Value
Posted by Paul Languirand on Wed, Jun 13, 2018 @ 11:42 AM

The Financial Accounting Standards Board (FASB)'s revised definition of readily determinable fair value (RDFV) may have in fact made the net asset value practical expedient more difficult to apply. In 2015, the FASB issued accounting updates addressing investments that calculate net asset value (NAV) per share, which, among other amendments, amended the definition of RDFV. Feedback received from financial statement preparers and users indicate that the intended clarification may have resulted in additional confusion rather than clarity regarding when a financial instrument is considered to have a RDFV. As a result, employee benefit plan advisors, financial statement preparers, and investors in entities with the impacted financial instruments may want to take a closer look at the issue, which could have an effect on their accounting for alternative investments.

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Topics: Paul Languirand, FASB, Fair Value, Financial Accounting Standards Board, Accounting Issues, net asset value, NAV

IRS Provides Guidance to Request Tax Accounting Method Changes for ASC Topic 606
Posted by Bob Smith on Wed, Jun 6, 2018 @ 06:30 PM

The IRS published guidance on May 10 that allows taxpayers to request a change in method of accounting to conform to certain aspects of new financial accounting standards under ASC Topic 606. Rev. Proc. 2018-29 provides taxpayers with flexibility over the manner in which transitions are made to conform income recognition for federal tax purposes with ASC Topic 606, as well as administrative ease in filing procedures needed to make these requests. However, the IRS limited the scope of its highly anticipated guidance to exclude many scenarios affected by ASC Topic 606. Because most taxpayers still need further guidance to conform completely to the new financial accounting standards, the May 10 guidance may be of limited practical use.

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Topics: Bob Smith, ASC Topic 606, Tax Cuts and Jobs Act, TCJA

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