In late October, the Financial Accounting Standards Board (FASB) released a narrow scope change to the accounting for business combinations. This Accounting Standards Update (ASU) 2021-08 is expected to reduce diversity in practice for the recognition of contract assets and liabilities, such as deferred revenue, in a business combination, and will in some circumstances reduce cost and complexity of existing US GAAP.
Topics: accounting, FASB, Revenue recognition, Business Combinations
COVID-19 changed how most businesses operate day-to-day. Similarly, many financial statement audit teams were tasked with migrating to a fully remote environment in order to complete year-end financial statement audits and other attest functions. But while these changes to core auditing practices can raise questions around quality, these differences from standard customs are generally misunderstood. Below are some common misconceptions about the remote audit process.
Topics: accounting, financial statement audit, COVID19, Coronavirus, remote work, remote audit
As we start a new year, it is important to look ahead to those upcoming accounting standards to plan for their application. Whether a company is a public company that must be prepared for first quarter interim reporting or a private company that needs to plan for its year-end financial statements, accounting standards take time to work through and implement, so it’s advisable to have a roadmap of what changes will affect financial reporting.
Topics: accounting, private company, COVID19, Coronavirus
For much of 2020, internal audit departments have tested controls using attributes to facilitate work-from-home (WFH) arrangements. As the year and internal audit work for many organizations comes to a close, reconciling if the controls adjusted for remote work arrangements will pass external audit scrutiny is top of mind for many CFOs and internal audit professionals.
Topics: COVID19, Coronavirus, remote work, work from home
One day before the deadline to return Paycheck Protection Program Funds, the Small Business Administration (SBA) updated its loan program’s frequently asked questions to create a safe harbor for recipients of loans of $2 million or less. The last minute safe harbor addition provides relief, but it also raised some additional questions, particularly coming so close to a major deadline.
Topics: COVID19, Coronavirus, CARES Act, Coronavirus Aid, Relief, and Economic Security Act, PPP, PPP Loan, payment protection plan, SBA, Small Business Administration
The change from rules-based, industry-focused guidance to a one-size-fits-all, principle-based standard may result in significant changes to how companies account for their contracts with customers. Depending on facts and circumstances, some entities may find it complicated to implement the new revenue recognition guidance. To help simplify adoption efforts, the Financial Accounting Standards Board (FASB) has allowed for the use of certain practical expedients that private companies can elect for their ASC Topic 606, Revenue from Contacts with Customers (Topic 606) implementation effort.
Topics: private company
